Group term insurance is a product designed to provide life insurance to a group of people under a single master policy. It is intended to provide monetary guarantee to the beneficiary of the covered under the group term life insurance plan in the case of death of the insured. The group should have been formed for some other purpose & not for the purpose of insurance.
Group term life insurance policies are offered to the following.
Non employer- employee groups
Non-banking financial institutions
Minimum group size shall be 10.
A pre decided Sum assured is paid to the beneficiary of the insured in the event of death.
Cheaper than individual policy cover.
Easy administration by way of simple documentation. No Individual Policy is issued to members. Instead a group administrator is issued a master policy.
Medical examination not required up to the age of 60.
No Maturity value.
Policy covers death due to accident or natural.
The cover will be for one year and can be renewed every year.
Members can be added or deleted at any time during the year. Group administrator has to inform the additions & deletions to the Insurer at the end of every month.
The Premiums paid by the employer are treated as business expenses and exempted under sec 37(1) of income tax act 1961.
Death Benefit received by the family in case of death of the member is exempted under sec 10(10D) of income tax Act 1961.