What is a Group Term Life Insurance policy?

Group Term Life Insurance Policy (GTLI) is a customised plan that offer life insurance cover to a group of members/employees under a single policy. A group insurance policy is not restricted to merely employer-employee groups and is also customised for other groups such as customers of banks, NGOs, professional groups, non-banking financial institutions, and microfinance institutions.

In an event of death of any member/employee covered under a group term life insurance policy, the nominee of the concerned member/employee is assured of financial assistance to the extent of Sum Assured for that member/employee.

The sum assured under the group term life insurance may vary from member to member or can be a uniform sum assured for all members/employees covered under a policy. For employees, the sum assured can be a multiple of their yearly salary and for a group of borrowers, the sum assured can be the outstanding loan amount at the time of death. One of the benefits of term life Insurance is, additional covers like critical illness and disability benefits can be added to a Group Term Life Insurance policy.

What are the Key Features of Group Term Life Insurance?

• Provides life coverage to multiple people under one policy.
• Premium is either paid entirely or the large sum is paid by the employer.
• The group term life insurance policy is renewable on an annual basis.
• As all the employees get free life cover, the actual cover becomes limited and is dependent on the factors such as risk class and the group size.
• The sum assured is paid to the nominee on the death of the covered individual.

How does a Group Life Insurance plan work?

• A group administrator is issued a master policy upon which he pays an initial premium.
• This initial payment covers all the members of the group for a tenure one year.
• An option to choose the sum assured is provided to the members of the group at the start of the policy.
• All the members are covered for a tenure of one year from the date of commencement of the policy.
• The group term insurance plans are annually renewable .
• The premium is charged based on the size, age, gender and sum assured opted
• Additions and deletions of members take place on the monthly basis from the date of joining or relieving of the member.
• Any additional premium left after adjusting addition or deletion of members is refunded to the master policy at the end policy term.