People are getting term insurance more now than before to protect their families financially in case they pass away too soon. As a benefit of working for them, companies worldwide set up group term insurance plans for their employees.
An ideal way to guarantee employee satisfaction and give their families financial security can be through group-term life insurance.
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Group term life insurance: what is it?
Group-term life insurance is a type of insurance that provides life insurance to many people under a single policy. In the unfortunate event that something negative happens to the insured person during the coverage term, it gives the beneficiaries financial protection.
When compared to individual term life insurance, how does it differ?
Individual term life insurance serves one person, whereas group term life insurance serves a group of people. A group insurance policy for the organisation provides coverage for every employee under a single plan.
The employer has to submit all the documentation required to purchase life insurance. Individual life insurance insures only you, as the name implies (and in some cases, your spouse)
Who covers premiums?
Group-term life insurance is often paid for by both the company and the employee. One can access an online term insurance calculator to identify your requirements and suitable premium rates, which can then be discussed with the employer to find your bit of the share for this premium.
Are there tax repercussions?
Term insurance tax benefits exist for group-term life insurance for both corporations and employees. Section 10(10D) of the Income Tax Act of 1961 exempts death benefits from taxation.
Note: While filing ITR, taxpayers must choose, between the old tax regime that comes with deductions and exemptions, and the new tax regime devoid of them, but which comes with lower slab rates.
What advantages do group-term life insurance plans offer?
Businesses can profit from group term life insurance coverage in the same ways that employees can. Employers can easily cover their gratuity liabilities with group term life insurance.
To relieve the employer’s burden, strategically constructed gratuity accounts are used to pay additional gratuities. When figuring out returns on money paid, the performance of the funds chosen by the client shall be considered.
In India, group-term life insurance plans can be more affordable since group program administration is less expensive. Employer expenses can decrease as a result of higher returns from performing funds. Some programs provide employers with gratuities and life insurance.
Benefits for employers of group term insurance:
The advantages of group term insurance for employers also include the following:
- Low-cost term insurance:
The premiums slide much lower because most businesses buy large amounts of group-term insurance for their employees. Because of this, the company can offer its employees term insurance benefits at a much lower cost.
Advice: The ideal way to stay on top of your financial needs would be to check the online term insurance calculator and evaluate the affordable premium prices depending on your required coverage areas from the term insurance policy.
- Lowering employee churn:
Most employees need to pay attention to term insurance, which is a significant employee perk. By offering group term insurance to workers, you can be sure they’ll stick with their positions.
- Tax advantages:
Under Section 37(1) of the Income Tax Act of 1961, the business or the employer may be exempt fromterm insurance tax benefits on the premiums paid for group term insurance.
- Boosts employees’ performance:
Employees can concentrate on their work without worrying about money, because they don’t have to worry about their family’s financial security in the case of an untimely demise.
How to sign up for group term life insurance?
Employers frequently get quotes from insurance companies for the many available policies. They decide and then proceed with the paperwork.
How can you determine if your employer provides group term life insurance?
If the business offers insurance, you can contact them directly through your human resources manager. You can also discuss this with the finance department.
Conclusion:
Companies and employers can offer group term insurance to employees at a modest cost. Employees are more motivated and dedicated to their employment when given term insurance benefits, because they don’t have to worry about providing for their families.
If you’re an employer looking to provide group term insurance for your staff, compare your alternatives and pick the one that may offer the ideal value for you and the team.
Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.
Also Read: Significance of hiring a tax advisor for your small business