What is Group Insurance?
Group life insurance is an insurance policy on the life of the members of recognized groups. A single policy is issued which covers all the members who are a part of the group which is being insured. Usually, term insurance plans are offered as group life insurance plans and so group insurance plans are also called group term plans
Features of group life insurance plans
Group life insurance plans have the following unique features –
A single policy is issued in the name of the group which is called the Master Policy. This Master Policy includes the names of all group members and provides coverage to all.
- A minimum number of members are required to buy group life insurance plans. Usually, this number is 25 but different plans might have a different minimum requirement of members.
- The policy is issued for one year after which it can be renewed for continued coverage.
- The sum assured is calculated based on the age of the members or their annual incomes or their level in a hierarchy.
- The premium can be paid by the group, its members or partially by the group and partially by the members.
- No medical underwriting is usually done for each member of the group. The insurance company underwrites the whole group as one based on the group’s composition and nature.
- Every member who is a part of the group gets covered under the plan.
- The premium, sum assured and the number of members covered might change on renewal of the policy. This happens because, after a year, the number of members might have changed. Moreover, the age of the members also increases by one year and so the coverage has to be revised.
- Riders can be taken with the term insurance cover for additional protection. There are two riders which are usually available. They are –
Accidental death and disablement benefit rider which pays an additional sum assured in case of accidental death or disablement
Critical illness rider which covers specified critical illnesses and pays a lump sum if the insured suffers from any of the covered illnesses.
