Insurance Advisory Newsletter – Group Term Life Insurance Policy : June 2024
Group Term Life Insurance
A group term life insurance plan (“GTL”) refers to a life insurance plan that covers a group of employees annually. GTL is often provided by employers to attract and retain top talent and may be offered as part of a comprehensive benefits package. During the policy term, life coverage is provided to a group of employees under an organization. Owing to its cost-effectiveness and broad coverage, GTL has become a popular choice for organizations to ensure their employees’ well-being and financial security. In the event an employee covered under the GTL is hospitalized or dies, compensation is provided to the family.
The coverages under the GTL are finalized basis an employee’s annual salary or the employee’s age or position at the organization, wherein the employer covers the premiums for the basic coverages. Additionally, to the coverages covered by the employer, employees may have the option to purchase extra coverage at their own cost. This flexibility allows employees to tailor their coverage to their individual needs and circumstances.Underwriting processes in a GTL does not require the need for an employee’s medical exams or extensive health assessments. As the Insurer evaluates the coverages basis the collective risk profile of the entire group rather than each applicant’s health history and risk factors. This enables a quick and easy enrolment of employees without facing barriers.
Who is covered?
- Active employment status: only employees of the concerned organization can seek
benefits under a GTL
- Minimum working hours: only employees meeting a certain number of days and hours in
an organization can seek the benefits of GTL
- Waiting period: only employees completing a certain waiting period can seek benefits of
GTL
Coverages and Exclusions
Coverage under GTL |
Exclusions under GTL |
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Key advantages
Employer’s perspective |
Employee’s perspective |
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