Group TERM Life Insurance – Employer- Employee - FAQ's

Group life insurance is typically offered as a piece of a larger employer or membership benefit package. By purchasing coverage through a provider on a “wholesale” basis for its members, the coverage costs each individual worker/member much less than if they had to purchase an individual policy. Those receiving coverage may not have to pay anything “out of pocket” for policy benefits or they may elect to have their portion of the premium payment deducted from their pay check.

Group Term Insurance Plan will generally have the following structure:

• Provides life cover to groups of people
• One master policy covering all members of the group
• Annually renewable term insurance plan
• Addition and deletion of members anytime during the year
• Sum assured payable to nominee on death of the covered member
• Employees can be additionally covered by riders e.g. accidental/ critical illness / disability
• Offers flexibility to cover the spouse of the member
• Simplified –Enrolment process
• Easy claim settlement process enabling speedy & quick settlement.
• Get additional protection by opting for Group Critical Illness Plus Rider that provides Rider Sum Assured in case diagnosed with any of the 19 Critical Illnesses

Advantages of the GTLI Plan

• Your Employees can enjoy a Life Cover at a low cost
• A Life Cover is a strong retention tool and loyalty building measure for employers
• You can avail tax deductions on the premium paid, as per prevailing tax laws
• The administration process for addition and deletion of members is simple
• Coverage without the need for a medical examination for Life Cover up to the free cover limit*
• Coverage to your employees in case of an unfortunate event
• *Free cover limit is the maximum amount of Life Cover that can be offered without any medical tests. This limit varies from group to group.

Benefits To employer

• Life cover for all the group members under one policy.
• Easy and hassle free financial help to the employee's family, in case of an unfortunate event
• Cost-effective method to buy a high cover at a low premium
• GTI cover for future service gratuity liability
• Serves as strong retention tool
• Premiums paid by the employer is tax deductible u/s 37 (1) of the Income Tax Act, 1961
• Simple procedures for addition and deletion of members in to the policy

Benefits To employee

• Adequate financial support to loved ones against his accident, illness or untimely death
• Convenience of no medical tests till free cover limits
• Cover for housing or vehicle loans given by you to your employees
• Premiums paid by the employer not treated as perquisite
• Death benefits exempt from tax under Section 10(10D)

FAQ'S

How does GTLI plan work?

This plan is offered through a Master Policy that is issued to Employer. As the Master Policyholder or the group administrator, you pay premiums that cover the members of your group. The members of your group are covered for a period of one year.

How will the Employee’s nominee receive the lump sum amount?

As the Master Policyholder, you can choose the lump sum amount that will be provided to the Employee’s nominee*. It can either be a flat or graded cover amount.  When all members of the group have the same Life Cover, it is called the flat cover. On the other hand, when different individuals are offered different Life Cover on the basis of pre-decided grades, it is known as a graded cover.

*Nominee is the person who will receive the Life Cover amount in the absence of the member.

What is the minimum number of members needed under this plan?

Formal group should consist of minimum 10 members. An Informal group should have at least 50 members.

How much premium can I pay at policy level?

You have to pay a minimum premium of `10, 000 p.a. at the policy level*.

What is the minimum amount of Life Cover offered?

The minimum amount of Life Cover is Rs.5,000 for each member.

At what age can a member start this plan?

The minimum age of entry for a member should be 15 years. But, the maximum age of entry should not exceed 79 years.

How long does the policy last?

The policy lasts for 1 year. It can be renewed thereafter.

How frequently can I pay the premiums?

You can pay the premiums monthly, quarterly, half-yearly and yearly.

More Terms & Conditions

SERVICE TAX: Service tax, if any, shall be as per the Service Tax laws and the

rate of service tax as applicable from time to time.

GRACE PERIOD FOR PREMIUM PAYMENT:

A grace period of 30 days from due date of premium will be allowed for payment

of premiums

REVIVAL OF POLICY:

If the policy has lapsed, it may be revived within a period of 30 day - 3months from the

date of first premium or the next Annual Renewal Date whichever is

earlier,

WAITING PERIOD:

For employer-employee groups there will be no waiting period. However, for non

employer-employee groups waiting period will be 45 days from the date of

commencement. During this waiting period, no death benefit shall be payable.

SUICIDE CLAUSE:

In case of death of a member due to suicide, within 12 months from the date of

inception of the policy or date of entry of the member into the scheme

whichever is later, claim payable shall be 80% of the premium paid in respect of

that member, provided the policy is in force.

However, in case of employer-employee groups where the participation is compulsory, this clause shall not be applicable.

COOLING-OFF PERIOD:

If policyholder is not satisfied with the “Terms and Conditions” of the policy, he/

she may return the policy to the Corporation within 15 days from the date of

receipt of the policy stating the reasons of objection.

On receipt of the same the Company shall cancel the policy and return the amount of premium deposited after deduction in respect of the following:

a. Recovery of proportionate charges towards risk premium.

b. The stamp duty.