Top 10 Benefits of Group Life Insurance for Employees and Employers in 2024

Life insurance policies have been beneficial to different categories of people for a long time. In today’s time, availing a life insurance policy is a wise choice, especially for individuals who have a family to support. A group life insurance is one such insurance plan which provides financial protection to a large number of people. 

What is Group Life Insurance?

A group life insurance policy is a master policy issued to an employer, covering all or a designated group of employees in an organisation or corporate. In the unfortunate event of an employee's death while on the company’s payroll, the group insurance policy provides a financial benefit to their designated beneficiary. This financial cushion helps ease the burden on the family during this difficult time.

Here are some of its major types include:

• Group Term insurance
• Group Health insurance
• Group home insurance
• Group shop insurance
• Group personal accident policy
• Group critical illness policy

Top 10 Benefits of Group Life Insurance for Employees and Employers

Group insurance has benefits for both employees and employers. Here are some of the best features of group life insurance: 

Single Coverage, Multiple Benefits

Under a single insurance plan, every single member is provided with death benefits. This financial security provides peace of mind to employees, knowing their families are protected.

Highly Affordable

Since the coverage is extended to a large number of people, premiums for group life insurance policies are typically lower than individual policies. This affordability makes it an attractive benefit for employees without having a significant financial burden on the employer who is providing this perk. 

Gratuity and Superannuation Benefits

Some group life insurance policies can be designed to help employers meet their gratuity and superannuation obligations. For employees, a group life insurance policy can work as their gratuity benefits based on their years of service in an organisation. Further, a group insurance policy based on superannuation benefits aids the employer in gathering funds for employees’ retirement. Thus, it can be a valuable tool for financial planning and reduces the employer's future liabilities.

Default Coverage

Certain group life insurance plans offer automatic coverage for all employees, ensuring everyone has basic protection. Employees may also opt for higher coverage later, if desired.

Tax Benefits

Premiums paid towards group life insurance by employers are tax-deductible as a business expense under Section 37(1) of the Income Tax Act, 1961. In case the employee also contributes to the premium, then it will qualify as a deduction under Section 80(c) of the Income Tax Act, 1961. Additionally, life insurance plan payouts will qualify for a tax exemption under Section 10(10D) of the Income Tax Act 1961.

Enhanced Employee Retention

Offering group life insurance demonstrates an employer's commitment to employee well-being. It fosters a sense of loyalty and security, leading to increased employee retention.

Hassle-Free Claim Settlement Process

The claim settlement process for group life insurance is usually quick and straightforward. This is true especially if one has availed a life insurance policy from a reputable provider like Muthoot Finance which ensures a smooth and efficient claim settlement process. This minimizes stress for the grieving family during a difficult time.

Different Types

Another benefit of group life insurance is that it is available in various types, providing different sets of benefits. On the basis of the organisation’s employee structure, number, and other requirements, one can choose from a number of different types such as group term insurance, group health insurance, group critical health insurance and the like. This ensures flexibility and an insurance plan that is tailored to the needs of both the employer and the employees.

Suggested Read: A Complete Guide To Group Term Life Insurance Plans In India

What To Know About Group Health Medical Insurance Plans

Improved Employee Morale

The lump sum can be used by the employee’s family members to ease their financial burden in the absence of the earning member. Knowing they and their families are financially protected can significantly boost employee morale. This translates to a happier, more productive workforce.

No Pre-requisites for Employees

Unlike individual policies, group life insurance typically doesn't require medical check-ups or eligibility criteria for employee participation. This ensures broader coverage and inclusivity within the workforce.

Muthoot Finance: Your Trusted Partner for Group Life Insurance

Muthoot Finance is India’s leading financial services company* with a reputation for excellence. We offer comprehensive group life insurance policies designed to meet the specific needs of your organisation. Our experienced team will guide you through the selection process, ensuring you choose a plan that aligns with your budget and employee needs.

We understand the importance of employee well-being and are committed to providing reliable and affordable group life insurance solutions. Get in touch with us today to learn more about how group life insurance can benefit your company and your employees.

* For the 8th consecutive year as per TRA's Brand Trust Report 2024.