As the private sector workforce increases in India, employers are coming up with a variety of benefits to offer to their employees. Having a large number of employees in the company means that one has a responsibility to retain them and ensure their well-being. One such benefit that many employers are providing or have considered providing is a group term life insurance policy. A group policy includes many people covered under it, sometimes hundreds and even thousands of people. To ensure the ultimate protection for their employees, an employer should select the right group term plan. We provide some tips on that process.
Understanding term insurance
Let us first understand how term insurance works to better grasp what group term life insurance is. A term insurance policy provides life coverage to the policyholder for as long as the tenure is valid. If the policyholder were to pass away during this period under conditions mentioned in the policy, the insurer is liable to pay the sum assured amount to the beneficiaries of the policy. In return, the policyholder pays a premium to the insurer.
In a group term insurance policy, the premium is deducted from the member’s salary. All the members are covered under a master policy that is handled by the master policyholder, who is usually the employer.
Tips on choosing the right group term insurance
- Provide comprehensive coverage
One of the most important lessons that the recent pandemic has taught is that there is no saying when an unfortunate situation will occur. It is best to be protected against as many uncertain risks in life as possible. That is why, as an employer, you should attempt to choose life insurance coverage for your employees that is comprehensive in its nature. There should be clauses that allow treatment at a wide network of hospitals offering cashless services and cover many types of deaths and diseases.
You must also keep in mind that, for many people, this might be the only form of life insurance policy they have. If an unfortunate event were to lead to an employee’s passing away, there should be enough compensation to secure the future of the employee’s family.
- Allow employees to choose additional coverage
One must also realise that each person has their distinct coverage needs. Even though a group term life insurance plan may provide your employees with default life coverage, there might be some other coverage needs they have. Therefore, you should give them the option of adding the coverage they require as per their budget and other requirements. You can keep riders, such as critical illness insurance, accidental death/disability rider, and so on, as optional for the employees.
For instance, the critical illness rider allows the insured to claim financial compensation if they are diagnosed with a covered critical illness. This money can help them seek the treatment they require.
You should also raise awareness about the importance of these riders so that maximum people can benefit from them.
- Adopt technology
To say that technology is the need of the hour would be an understatement at this point, given the recent pandemic. This should be kept in mind when offering life insurance coverage to your employees as well. Your employees should be able to access the insurance policy and related documents online. It would be quite beneficial if the entire claim raising, and settlement process, could be carried out digitally as well. An online procedure reduces the hassle that an employee/their family must go through in times of emergency.
- Choose a reliable insurer
Since you are ensuring the lives of such a large number of people, you should ensure that you are opting for a reliable insurer. One should avoid buying group term life insurance from an insurer that offers it at a lower cost but compromises on coverage. Instead, the right balance between the costs and the coverage should be struck. It is better to get an idea of the top players in the market and stick with those as they would have the most amount of experience. Aspects, such as the claim settlement ratio and cashless hospital network, and so on, should also be looked at.
Besides these, you should make your employees aware of the nuances of what group term life insurance is and how they can benefit from it in a maximum manner.