Benefits of Group Term Life Insurance Plans

Group term life insurance is an effective way for employers and organisations to protect one of their key assets – their employees. As the name suggests, it is a policy that effectively covers a group of people under one contract. So, in the case of a group plan, instead of each member buying a separate policy, a single contract covers the entire group, whether they are employees, borrowers, or members of an association. For workers or members of the group, it means receiving the benefit of life cover immediately without medical underwriting. What’s more, for employers, it operates as a powerful welfare tool that builds trust and helps improve retention.

Group term life insurance is an effective way for employers and organisations to protect one of their key assets – their employees. As the name suggests, it is a policy that effectively covers a group of people under one contract. So, in the case of a group plan, instead of each member buying a separate policy, a single contract covers the entire group, whether they are employees, borrowers, or members of an association. For workers or members of the group, it means receiving the benefit of life cover immediately without medical underwriting. What’s more, for employers, it operates as a powerful welfare tool that builds trust and helps improve retention.

A group term insurance policy managed and offered through a group administrator, who may be an employer, bank, organisation, association, etc. The insurance company issues the group policy to eligible individuals on behalf of the group administrator. The group administrator is responsible for paying the premiums and renew the policy periodically, usually on an annual basis.

This shorter coverage period as compared to individual plans is one of the ways the insurer ensures that the policy remains relevant to the employer even if one or more members decide to change jobs or leave the association. Moreover, Group members may have the choice of selecting a higher sum assured than the base plan offered for an additional premium payment. This extra premium for additional cover may be paid as a one-time payment or connected to payroll.

It is also notable that the benefits of a group plan are available only as long as the covered individual remains part of the group such as being employed with the group administrator. In such a case if the insured decides to leave the group such as move to a different company, the benefits of the group plan will cease automatically.

On the other hand, if a member unfortunately passes away during the policy term, the insurer pays the sum assured to their nominee. Some plans also allow members to top up their cover at their own cost, beyond what the base plan already does. In certain cases, when an employee leaves the organisation, the policy may offer portability, letting them convert it into an individual plan to continue their existing cover without interruption.

Employers can choose to cover all their employees under a group term life insurance policy, regardless of age, gender, existing medical conditions, income level, etc. The following are some of the top features and benefits of a group insurance plan:

At Axis Max Life Insurance, we design group term solutions that are simple for the HR fraternity to run, yet very meaningful for employees to hold. Our plans such as Group Term Life Platinum Assurance Plan can help you extend coverage to your employees, whether you are a SME or a large corporate. Customisations available include flat or salary-linked cover, free-cover limits, and optional riders, including accidental death, disability, and critical illness covers, at an industry-wide, all of these with a cost-effective pricing. But, beyond these policy-related technicalities, our onboarding is quick and hassle-free with options for bulk enrolment, e-certificates, a self-service employer portal, and easy mid-year additions/exits.

The benefits of group insurance go far beyond just providing life cover. It brings peace of mind to employees, strengthens employer–employee relationships, and delivers financial protection at a fraction of the cost of individual policies. For HR teams and business leaders, investing in group term insurance is a meaningful way to care for their workforce. Connect with Axis Max Life Insurance today to explore a customised plan that secures your team and builds trust over the long term