Group Insurance plans cover a defined group of people, for example, members of a professional association, or a society or employees of an organization. Such plans may offer life cover, health cover, and/or other types of personal insurance.

Many insurance companies in India have introduced group insurance policies to meet the insurance needs of specific groups including professionals, employers-employees, co-operative societies, among others.

An individual can either become a master policyholder of a group insurance plan or be a member of a group plan if he or she is a working employee and aims for a product which would provide protection to the loved ones and keep their future secure even in their absence.

Generally, the cost of insurance of a group is lower than what it would cost to insure the members individually. Hence group life insurance schemes are popular with companies as an incentive for their employees because they can then feel secure. Group health insurance has become an indispensable part of employee benefits. Organisations provide this to safeguard employees against unexpected health issues, accidents, mishaps, etc. It also plays a big role in motivating and incentivising employees.

Rise in Demand for Group Insurance 

The idea of group insurance came into light during the rise of the industrial revolution. The enormous growth of factories resulted in vast and massive machinery and working on these machines caused several accidents and work-related injuries. Some ranging from disabilities to even fatalities. This led to the need for social protection by those who had experienced occupational dangers and mishaps, eventually bringing about several changes.

  • The necessity to furnish various perquisites on a cost-efficient scale gave a boost to the group insurance policy.

  • Affordable and progressive underwriting norms, unlike those observed in individual insurance, led to the extraordinary development of group insurance health policy.

  • People who were refused individual insurance were able to acquire insurance on a group basis.

Multiple group insurance schemes started emerging which offered advantages for the employee by the employer and state. Employees were offered benefits such as a lump sum payout to family in case of premature demise while other benefits were paid on tenure with the employer. These benefits included regular health-checkup, cashless hospitalisation facilities, maternity benefits, covers critical illness with an extended plan, hospitalisation charges, etc. 

Features of Group Life Insurance Plans

  • Affordability - The costs involved in group life insurance are far less as compared to individual life insurance covers and are therefore popular among employers to offer a security umbrella to their employees. Those who cannot afford insurance can be insured for a nominal sum under GLIS if they become members of a group that provides insurance cover.

  • Master certificate/member certificate – The employer is normally the buyer of the group policy cover and retains the master copy of the policy. Members of the group are provided with a certificate of insurance. Similar to individual policies, the members can designate a nominee who will be the beneficiary to receive benefits in case premature death happens.

  • Form of Incentive – The employer, by providing the group life insurance cover, can make it attractive for the employee to work under him. GLIS can act as an incentive for people to subscribe to various offers. Banks, for example, are known to club group life insurance schemes into their fixed or savings account products to attract depositors.

  • Security for members – It is costly to get life insurance and insurers could decide a premium on a case to case basis. In a lot of cases, the past medical history and lifestyle of an individual may result in him being denied insurance cover. Group life insurance scheme, on the other hand, provides for all group members just by their group membership.

  • Convertibility – While group life insurance cover ends with the termination of employment, it can still be converted into an individual life insurance cover. This may come at a higher cost if the insurer so wishes. But the discounted rate at which the group life insurance plan was available will not apply once he/she ceases to be a member of the group.

Additioanl Reading: How Much Life Insurance Do You Really Need?

Top Group Life Insurance Schemes

  1. Bajaj Allianz

    1. Bajaj Allianz Life Jan Suraksha Yojna

    2. Bajaj Allianz Life Pradhan Mantri Jeevan Jyoti Bima Yojna

    3. Group Income Protection Plan

    4. Bajaj Allianz Life Group Term Life Plan

    5. Group Employee Care Plan

    6. Group Employee Benefit Plan

    7. Group Term Care Plan

    8. Group Superannuation Secure Plan

    9. Group Annuity Plan

    10. Group Credit Protection Plus Plan

    11. Bajaj Allianz Life Super Gain Group Superannuation Scheme

    12. Bajaj Allianz Life Group Sampoorna Suraksha Kavach

  2. SBI Life:

    1. SBI Life - Kalyan ULIP Plus

    2. SBI Life - CapAssure Gold

    3. SBI Life - Gaurav Jeevan

    4. SBI Life - Pradhan Mantri Jeevan Jyoti Bima Yojana

    5. SBI Life - Sampoorn Suraksha

    6. SBI Life - Swarna Jeevan

    7. SBI Life - RiNn Raksha

    8. SBI Life - Grameen Shakti

    9. SBI Life - Grameen Super Suraksha

  3. LIC:

    1. LIC’s Group Credit Life Insurance

    2. LIC’s New Group Leave Encashment Plan

    3. LIC’s Single Premium Group Insurance

    4. LIC’s New Group Superannuation Cash Accumulation Plan

    5. LIC’s New Group Gratuity Cash Accumulation Plan

    6. LIC’s New One Year Renewable Group Term Assurance Plan I

    7. LIC’s New One Year Renewable Group Term Assurance Plan II

    8. Aam Admi Bima Yojana - Social Security Scheme

  4. ICICI Prudential Life Insurance:

    1. ICICI Pru Loan Protect

    2. ICICI Pru Loan Protect Plus

    3. ICICI Pru Group Term Plus

    4. Group Gratuity Plan

    5. Group Superannuation Plan

    6. Group Leave Encashment Plan

    7. Group Immediate Annuity Plan

Key Takeaways

  • Group life insurance is offered by an employer or other large-scale entity such as an association or labour organization to its workers or members.

  • Group life insurance is fairly inexpensive and may even be free.

  • Some organizations require group members to participate for a minimum amount of time before they are granted coverage.

  • This kind of insurance generally provides basic coverage.

  • Coverage may be terminated or converted to an individual policy once a member leaves the group.

FAQs

  1. What is a group life insurance policy?

A group life insurance policy is an insurance that covers a group of people, normally who is a member of any society, organisation, labour union or common employees of any company. Premium per person charged under such a policy is much less than if they had to buy individually.  

  1. How do employees benefit from group life insurance?

Employees benefit the most from group life insurance policies especially when it comes to affordability and worker benefit program aspects. 

  1. What are the different forms of group life insurance schemes?

The main categories of group life insurance available are group health insurance, group personal accident, and group life.

End Note

Group insurance offers various benefits chief among which is a life cover made available to members irrespective of age, gender, socio-economic background or profession, so long as they belong to the group that is applying for insurance.