Group term life insurance is a type of term insurance which is offered to a group of members under a single insurance policy. The group term life insurance is usually taken by the organizations to cover the lives of their employees against any accident or natural death and accidental disability. Group term life insurance is a form of term life insurance in which the claim would be paid to the nominee in case of death of the policyholder or to the policyholder in case of disability. The premium for the group term life insurance would be paid by the employer and the coverage would be availed by the employees. The sum assured under the group term insurance would be decided by the employer of the organization who is paying the premium.
Group term life insurance is usually taken for a period of one year and then renewed each year whereas the term life insurance is usually taken for a period of 5 or more years. There is no concept of breaking in the group term insurance policy as the policy can be renewed at any point of time without much hassle. In addition to this the group term insurance policy doesn't require any pre policy medical check-ups unlike the retail term insurance policy which requires medical check-up before policy issuance depending on the sum assured selected by the insured customer.
Group term life insurance is offered by the employers to their employees as a part of employee benefits. The other employee benefits offered by the employers include provident fund, sick leave, bonus etc. Group term life insurance policy is a pure term life insurance policy in which the premium paid would be returned in case of an event not happening. In simple words the maturity benefit or the survival benefit would not be available under the group term life insurance policy. Group term life insurance policy is a benefit based policy in which the entire sum insured would be paid to the nominee in case of occurrence of an event. Group term life insurance policy would be lapsed if it is not renewed on time, but there would be no penalties for renewal unlike the retail term life insurance policies which require penalty amount as well as medical check-up before proceeding with renewal of policy. Below are the types of perils covered under the group term life insurance policy:
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