Benefits of Group Term Life Insurance Plans
What is GTLI full form? GTLI or Group Term Life Insurance as the name suggests are designed to offer life insurance to a group of people. But they are all covered under a single policy. A group term life insurance plan is not limited to employees but can also extend to other groups such as customers of banks, NGOs, professional groups, non-banking financial institutions, and also micro finance institutions.
There are many benefits of group term life insurance plans, such as financial assistance and independence to the dependents of the concerned employee, in case of any unforeseen circumstances or in the eventuality of their death.
It also offers other benefits such as a uniform cover all, to ranked covers of the various grades of members. There also some group insurance schemes that provide covers for outstanding loans to a group of borrowers, while others provide certain benefits like critical illness and disability benefits.
These are the various benefits of Group Term Life Insurance Plans
1. Default Insurance Cover
If you are a member of a group term life insurance policy, then you are provided an insurance cover simply by being part of the group. Thus it is extremely beneficial to those without a personal life insurance policy.
2. Gratuity Funding
Employers are given assistance with a systematic process of building funds for their future gratuity liability towards the employees. A group term life insurance plan therefore assists the employers with the same and also provides life insurance to employees in a seamless and easy manner.
3. Tax Benefits
Both employers and employees receive tax benefits through Group Term Life Insurance plans. As per prevailing Tax Laws, death benefits are exempt from tax under Section 10 (10D) of the Income Tax Act, 1961.
Group insurance plans are also doubly effective for employee welfare as well as retention.
4. Customisable to suit individual employee needs
Group insurance policy coverage can even be extended with add-ons such as an education allowance, repatriation allowance, accidental death etc. and more, thus adding on even more benefits to the existing base cover.
5. No medical check ups required
Employees do not need to go through the hassle of medical checks ups under Group Term Insurance plans.
6. Cost Effective
As a group plan entails insurance cover for a group of people, the premium is much lower as compared to individual policies, thus making it a lot more cost effective.
For working employees, availing a group term insurance plan ensures the safety and future of their loved ones. In case something unforeseen happens to you, your beneficiaries will receive a death benefit. Group term life insurance schemes have become a fundamental constituent in benefit packages presented to employees by employers. In fact, most fraternal providers offer group term life insurance to its members.
What is the tenure of a group term life insurance plan?
What is the minimum sum that is assured under the group term life insurance scheme?
The minimum sum that is assured under the group term life insurance scheme is Rs.1,000.
AN July 21/22