The total insurance penetration in India was at 3.76% in 2019. In this, life insurance stood at 2.82% and non-life insurance stood at 0.94%. Group insurance is a segment of this life insurance coverage which is tailored for a group of people, mostly for employees in an organisation. You can protect them and their families against the uncertainties of life and gain loyalty, trust and retention in return. Choose from the pure term, traditional savings and market-linked plans and receive tax benefits on the premiums paid.
The coverage will mostly be based on the annual incomes of employees. Employers can pick a scheduled assured sum for your firm and offer a financial cushion during tough times. But how to pick a group life insurance policy that would best suit your needs? See the below tips to provide the ideal plan to those who contribute to your business success.
Death and Terminal Illness Benefit
A group policy is a perfect way to assure workers well-being since they are vital assets of any business. Check for Single Life and Joint Life Insurances. A TI benefit equal to 6 EMIs of the loan must be paid in case the insured member is diagnosed with terminal illnesses. Further, the death sum assured must also be paid in the event of death during the cover term. Understand the First Death Basis and Each Life Basis well before opting for the policy.
Death Cover and Accidental Total Permanent Disability
The sum assured as per the certificate of insurance will be payable and the contract will terminate when the insured individual suffers from an accidental total and permanent disability. A death sum assured should also be payable during the death of any life during the cover term. Talk to an expert for any life insurance in India related information for the right choice.
Claim Settlement
The whole point of purchasing life insurance coverage is defeated if the claims are not resolved properly. So, make sure to check the settlement ratio which is basically a measure of the total number of insurance claims paid out by the insurance company to the total number of claims received. It is a great parameter to determine if the policy is right for you since it indicates the insurer’s reliability. Pick a company that has at least once settled 96.06% of all claims made in a financial year. But know that often the insurance companies have to remove fraud cases that may decrease the CSR. Try not to consider these figures since it is necessary to eliminate the same.
Applicable Charges
Check the basics like fund management, allocation, switching, mortality and surrender charges along with goods and service taxes. Make sure they are affordable and do not cross your budget for purchasing life insurance in India. Further, get an idea of the tax benefits as per the current provisions of the Income Tax Act, 196. For instance, the premiums paid by an employer in respect of an employee up to 8.33% of their salary in a financial year will be treated as an expense for tax purposes in the payment year. Make sure this is suitable for you before getting a policy for your organisation.
Ticking off the above points and reading the terms and conditions of the policy carefully will help you make an informed choice. Read the maturity benefit and surrender benefits as well along with understanding the free lock period. All of these will help pick the right plan.