Group Life Insurance is a type of insurance that an employer or any large entity such as an association or organization gives to their employees or groups of members.
It provides life coverages for its holders. It is a proven method of ensuring efficient human resource management in a corporate organization.
Group Life Insurance has peculiar features along with its many benefits to both employees and employers alike.
Features and Benefits of Group Life Insurance.
Table of Contents
In this post, we shall guide you through the features of a Group Life Insurance policy and the many benefits it offers you as an employee or employer.
The Features
The following are the five (5) major features of a Group Life Insurance plan:
- Master Policy Operation – It functions for a group of people under a single policy. This single policy is also referred to as a Master policy. The master policy is usually taken out by an employer or owner of an organisation to provide payment for members whenever they undergo any risk specified in the policy.
- Grouping of Risks Under Single Cover – This type of insurance allows for assembling different risks to get coverage, under a single policy.
- Contributory/Non-contributory Nature – Employers can decide to make a group life policy contributory by paying a certain part of the required amount to cover for policy while leaving the rest amount for employees to contribute towards. An employer can also decide to make it non-contributory by taking sole responsibility to pay for the policy.
- Affordability – This is one of the cheapest and most affordable insurance plans. This can be due to the extensive grouping of risks under a single policy or/and the contributory nature of insurance.
- Simplicity – There’s no complicated process with taking out a group life insurance policy for members.
The Benefits
It serves a lot of benefits to both employees and their employers in the following ways;
- Saves employees money spent on buying insurance plans: Group life policy members can skip buying some types of insurance if their company already offers a group policy that covers the necessary risks.
- Offers gratuity benefits to employees: Also, it allows for employers to gather enough to be able to pay a gratuity amount to workers who have completed work with the company after a certain number of years.
- Term policy benefit: As with how term life insurance works, the group life policy ensures a member’s mentioned beneficiary gets the payment in the event of the member’s death.
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- Efficient management of funds and resources: The group life insurance plan allows the efficient use of a company/organisation’s funds & resources. Emergencies that can cause financial inconveniences to the organization are promptly taken care of by fund payments from the insurance policy.
- Automatic license to coverage as a Member: being an employee in an organisation that offers group life insurance to its workers automatically grants you access to payment benefits from the insurance.
- No Prohibitions/Exclusions: the group life insurance plan does not exclude certain individuals under a group from getting policy benefits based on their age, gender or health.
- Tax-Benefits: Companies that participate in the policy have certain advantages over their tax payment.
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- Offers Flexibility of Plans: Most group insurance plan members have the opportunity of discontinuing membership from the group and continuing with the same policy singly for themselves with an increase in premium.
- Served to attract, retain and motivate employees: Taking out a group insurance policy as an employer will enable the growth of your company by creating an atmosphere of efficient functioning workers based on the value you input into them as your employees.
- Available coverage worldwide: The death of a member under a group life plan in a different country does not affect the death benefits that’ll go to the member’s beneficiaries.
Conclusion.
Note that only certain groups are eligible to participate. These majorly include among a few, the employer-employee and large-scale clubs or association-members groups.
Group Life Insurance is an important policy for any organization to implement in order to enable its stable growth and positive function.
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