Group Life Insurance: An Overview
What is Group Life Insurance?
Group life insurance is a type of life insurance policy offered to a group of people, typically employees of a company or members of an organization. Unlike individual life insurance, a single policy covers all members of the group, with the employer or organization usually serving as the policyholder.
The policy provides financial protection to beneficiaries in the event of the death of a group member, ensuring that dependents receive a lump-sum payment or financial support.
Key Features
Coverage for Multiple Members: One policy covers all eligible employees or members.
Employer-Sponsored: Often provided as a benefit to attract and retain talent.
Simplified Underwriting: Usually does not require individual medical exams, making enrollment easier.
Flexible Sum Assured: Coverage can be a fixed amount per employee or based on salary multiples.
Optional Add-Ons: Some plans include critical illness cover, accidental death benefit, or disability coverage.
Benefits of Group Life Insurance
Financial Security for Families: Ensures dependents receive compensation in the event of a member’s death.
Employee Retention & Satisfaction: Acts as an attractive employee benefit, improving loyalty and engagement.
Cost-Effective: Premiums are usually lower per person compared to individual policies due to risk pooling.
Simplified Administration: One policy simplifies management for employers and insurers.
Tax Advantages: In some countries, employer contributions toward group life insurance are tax-deductible.