Group term insurance plan is a specifically designed life insurance product which offers life coverage to a group of companies, associations, societies, and business. The insurance coverage is offered to a group of individuals under a single master life insurance policy. Even though the group term insurance plan is similar to the individual life insurance policy, there are numerous benefits offered by the group term insurance plan. Let’s take a look at some of the benefits offered by group term insurance.
• Offers Tax Benefit to the Employer: Group term insurance plan offers a tax benefit to the employers. Moreover, the employees or member of policy can also avail tax exemption. Besides this, the plan also offers the combined benefit of employee welfare plan and employee retention plan to its customers.
• Gratuity: Gratuity is offered to the employees by the employers on the completion of a fixed number of years of services in the company. By purchasing a group term insurance plan, the company can create a corpus for the employee over a period of time, so that they can offer a good amount as gratuity benefit to the employer.
• Superannuation: The amount collected through group superannuation method is paid to the members of group term insurance plans as an annuity during the retirement period.
• Life coverage: Under the group term insurance plan, life coverage is offered to the beneficiary of the policy in case of demise of the employee during the tenure of the policy.
• Coverage by Default: A group term insurance plan is offered to all the members of the policy automatically. As soon as the individual joins the organization, they are enrolled in the group insurance plan. After the premium is paid by the insurance holder, the insurance coverage can be availed. Along with the group term insurance plan, the policyholder can also purchase an individual term insurance plan according to one’s own requirement.
• Ease of Premium Payment: The premium of group term insurance plan can be paid in a very simple and hassle-free way. The premium of the policy is deducted automatically from the salary account of the insured. Thus, the plan offers a very convenient mode of payment for both employees and employers.
• Efficient Fund Management: The amount accumulated by the group term insurance plan is managed by the expert fund managers from the insurance company. The employers are provided with ample fund to handle the emergencies; the gratuity, superannuation, and other payouts are efficiently managed by the fund managers in order to provide maximum benefit to the policyholder.
With a plethora of benefits offered by a group term insurance plan, it is the best option of investment for individuals who want to provide financial security to their family. However, along with the benefits offered by group term insurance, it is advised that the insurance buyers should consider purchasing an individual term insurance plan. This is because an individual term insurance plan provides higher insurance coverage to the policyholder. Also, the benefits that are not covered under a group term insurance plan can be availed in a pure term insurance plan.
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