Life Insurance

Employees are the most crucial resources of any company, be it a multinational organization or a newly-launched startup. In order to attract and retain talented human resources, an organization must maintain a healthy and positive work environment. This helps the company continue its business operations without disruptions and allows an environment in which new ideas and high motivation thrive.

If you have recently started your own venture or have been running a startup lately, you should consider offering your team members a group life insurance policy. It is one of the most affordable and effective tools which can help you enhance the morale level of your employees and ensure their loyalty to the company.

Group Life Insurance Policy

A group life policy is a financial protection plan which can be bought by any corporation, financial institution, educational group, non-banking financial company (NBFC), club, or professional organization for its members. It helps the life assured group meet their financial obligations in case of an unfortunate event like death, permanent/temporary disability, terminal illness, etc. This ensures that the employees leave their loved ones financially secured at times when they are not physically present to take care of their needs.

Types of Group Insurance Policies

On the basis of contribution to the premium of the plan, there are two types of group life plans:

  1. Contributory Group Life Plan: Under this type of plan, the employees either contribute partially or fully toward the premium of the policy. This is generally done by way of a deduction of a certain percentage from the employee’s salary.
  2. Non-Contributory Group Life Plan: Under this group life policy, the employees need not contribute any sum toward the policy’s premium payment. The employer bears the entire expense of premium payment to provide life insurance benefits to their employees.

Who is Eligible to Purchase a Group Life Policy?

The following are eligible for purchasing a group life cover for their members:

  1. Organized sector corporations like startups, MNCs, etc.
  2. Informal employer-employee groups like domestic workers, street vendors, etc.
  3. Microfinance institutions
  4. Banking and finance companies
  5. Non-banking financial companies (NBFCs)
  6. Professional groups and associations like doctors, chartered accounts, doctors, etc.

Key Features of Group Life Plans

The common features of group life plans are presented below:

  1. Comprehensive coverage: A group life plan offers comprehensive coverage for all major instances which can affect your employee’s life drastically, such as death, disability, and critical illness.
  2. Guaranteed benefits: These plans provide a guaranteed sum to the deceased employee’s family to help them keep their financial stability intact even during tough times.
  3. Default coverage for new employees: These policies will automatically cover any new employee who joins your organization. Thus, you do not need to buy a separate policy for every new joiner.
  4. Customization facility: You can customize a group life policy according to the needs and requirements of your employees with the help of available riders like cover for critical illnesses.

How Providing Group Life Insurance is Beneficial for Employers

The following are some of the essential benefits which an employer can enjoy by offering group life plans to their employees:

  1. Single master plan: As a startup owner, you need not purchase different life insurance plans for different individuals. A group life policy covers all of your employees under a single plan, providing them access to quality healthcare.
  2. Affordable fringe benefit: Insurance plans are one of the most affordable non-monetary benefits that you can offer to your employees. The premiums of group life plans are highly competitive as they include coverage for an entire group of people.
  3. High employee motivation: When employees are offered fringe benefits, they feel motivated, and motivated employees are all that a business owner can want.
  4. Low attrition rates: When the employees feel motivated, they don’t feel the urge to change their jobs. They often decline other job offers providing higher monetary benefits. This helps you keep your talent acquisition cost in check.
  5. High productivity: Motivated employees are also more efficient employees. Higher efficiency results in higher employee productivity and, thus, higher profits for the company.
  6. Collaborative work environment: A work atmosphere where employees feel valued and motivated gives birth to collaborative behavior among peers. This not only keeps the work environment positive but also helps you build your brand reputation.
  7. No requirement of medical check-ups: The employees need not undergo any medical check-ups to be included in the coverage of a group life plan. Thus, you as an employer need not take the hassle of arranging check-up facilities for each and every employee.

Key Takeaways

Group life insurance plans are the perfect solution for business owners who are looking for tools and techniques to boost their employees’ morale. It also helps you ensure that all keymen of your organization remain financially secured, contributing to the company efficiently while maintaining peace of mind. These insurance plans convey the message that you and the company have the employees’ best interests at heart. Thus, they will put their faith in you in challenging situations. Group life plans help harbor a collaborative, friendly, and understanding work environment where everyone feels equal and secure.