Employers today offer their employees with various perks to encourage them for better performance and to ensure their retention. Perks offered normally include appraisals, bonuses, incentives, awards etc. But a really useful perk to be used by employers is offering employees the facility of group term life insurance policy. This facility gives the employees the much needed peace of mind that their families are safe even if they are not around. If your company offers you such a policy or if you are in the process to join a company that promises such a facility, then you must know a few things about it.
What is a group term life insurance policy?
This is a term life insurance plan offered to employees by their employer. As it is term life insurance, the policy matures around the time an employee would normally be due for retirement, i.e. around 65 to 70 years of age. As mentioned before this policy is normally offered to employees as a part of their employee benefit package. Employers mostly cover the cost of the insurance policy. Sometimes, the employee may need to pay a portion of the premium; these premiums typically cover medical as well as life insurance policies.
Coverage offered by a group term life insurance plan
Just like any other term life insurance policy, the benefits of the group term life insurance policy also goes to the beneficiary named on the policy, if the employee dies before the term of the policy ends. The sum assured received depends on the plan chosen by the employer. Also there can be a maximum limit for the entire group as well. Mostly, this is not the only life insurance a person has, but this policy is a benefit offered to the employee. The group term life insurance premium amount depends on the coverage opted by the employer. The higher the coverage, higher will be the premium. Plus you also avail attractive benefits.
Premium amount for the group term life insurance policy
The premiums for the group term life insurance policyare paid by the employer, with a portion of the premium is sometimes covered through employee contributions. The premium amount will vary as per the policy chosen by the employer. The more the cover opted by the employer, higher will be the premium amount. Mostly, employers seek to strike a balance between the group insurance term life rate and the level of coverage for the employees that will be a good deal.
In case the employee ceases to continue with the company, they have the option to continue the group term life insurance policy, if they are ready to make the necessary payments for the premiums. The company does not pay the premium.
Need to know about Group Term Life Insurance Policy