When working for a company/firm, you are working with a group of individuals, and the whole group is working towards helping the organization grow. The only way a company flourishes and performs well is if its employees are at peace with the work and employer. The satisfaction of an employee will depend on different factors like financial security, career development and recognition. Some of the companies protect their employees with insurance coverage by providing them with group insurance.
What is Group Insurance?
A group insurance policy is an investment plan which helps employees by providing them with financial security. The employer can choose from different life protect insurance plans for groups available to provide insurance protection to their employees and their families.
When an employee is given assured insurance coverage by their employer, they can work with a peaceful mind, knowing their family and loved ones would be financially secure in case of any eventualities. These policies offer many benefits that include life coverage to all the employees included under the group insurance policy regardless of the employee’s age, gender, socio-economic background or profession.
Two types of group insurance policies
- Formal insurance groups:
Under a group insurance policy, formal insurance groups will consist of an organization, company or corporation. The employer will then purchase the group insurance policy to cover the organization’s members (employee).
- Informal insurance groups:
In an informal group insurance policy, the administrator will purchase the group insurance policy to cover the organization’s different members.
Some features of a group insurance policy
Insurance companies provide their employees with a gratuity benefit once they finish a specific number of years with them. It is the company’s way of rewarding the employee’s loyalty. Group insurance plans offer investment options to the company for creating a gratuity corpus.
- Covering liabilities:
A group insurance plan will also cover the outstanding financial liabilities like debt obligations of an employee in the event of their untimely demise.
- Term life insurance:
Under the group insurance plan, the sum assured or the coverage will be provided as a payout to the policyholder’s family, in the event of their untimely death.
Why should you choose a group insurance policy?
A group insurance plan will promise insurance coverage to employees on a large scale. It is an ideal insurance policy for employers, organizations, companies, financial institutions, etc., to cover a set of individuals falling under a standard category. With a group insurance plan, you get a customized insurance plan at affordable premiums. Organizations opt for the group insurance plan to provide financial safety to their employees during troubled times. Investing in group insurance helps the employers ensure that their employees work on expanding and improving the business instead of worrying about their family’s safety.
When you get into an insurance policy, you must consider certain things like:
- If you have gotten into an informal group insurance policy, you are entitled to get an insurance certificate for your records.
- If you decide to resign from the organization, your plan will cease. Thus, the group insurance policy should not be your only insurance plan.
- You must check the different charges associated with the plan.
A group insurance policy can be a smart investment that can provide your family with financial protection in your absence. This insurance plan offers different features and benefits to the policyholders, which can be useful for the insured as well as their families.