Intro: In this month's issue, we turn our focus to group insurance cover, a concept that is rapidly gaining popularity with consumers. Read on to know about it.
Group insurance is an insurance policy that covers a group of people, usually the members of societies, employees of a common employer or professionals in a common group. These individuals are covered under a single policy called the ‘master policy’.
The insurance contract is with the body that represents this group of individuals such as the employer, who becomes the policyholder with the employees as the beneficiaries. The amount and terms of insurance are negotiated by the policyholder and not by the individual beneficiaries.
Broad plan details
Minimum age at entry 18 years
Maximum age at entry 65 years
Maximum age at maturity 70 years
Minimum group size 50 members
Maximum group size No limit
Minimum cover INR 5,000
Maximum cover INR 5 crore
Group cover not only provides the members of the group with a life insurance plan but also covers any outstanding loan liabilities so that the group's interests are protected at an affordable cost in the event of death. All loans such as home loans, car loans, education loans, personal loans, etc. may be covered under the plan.
The member's family will not be burdened with the outstanding loan repayment, in the unfortunate event of the member's demise. The insurer will pay a lump sum amount to the family and any excess amount over the outstanding loan amount to the nominee appointed by the group member.
The premium is paid to the insurer by the policyholder who may or may not collect the same from the individual members of the group. The premium, if paid by the individual can be deducted straight from the salary.
Members have the flexibility to choose between a level term cover and a reducing term cover. In case of the former, the cover remains equal to the initial loan amount throughout the policy term. In case of the latter, the cover reduces to match the falling outstanding loan amount throughout the policy term.
Depending on the cover option chosen (level cover or reducing cover), the members have the choice of regular, limited and single premium options.
Group insurance is an insurance policy that covers a group of people, usually the members of societies, employees of a common employer or professionals in a common group. These individuals are covered under a single policy called the ‘master policy’.
The insurance contract is with the body that represents this group of individuals such as the employer, who becomes the policyholder with the employees as the beneficiaries. The amount and terms of insurance are negotiated by the policyholder and not by the individual beneficiaries.
Broad plan details
Minimum age at entry 18 years
Maximum age at entry 65 years
Maximum age at maturity 70 years
Minimum group size 50 members
Maximum group size No limit
Minimum cover INR 5,000
Maximum cover INR 5 crore
Group cover not only provides the members of the group with a life insurance plan but also covers any outstanding loan liabilities so that the group's interests are protected at an affordable cost in the event of death. All loans such as home loans, car loans, education loans, personal loans, etc. may be covered under the plan.
The member's family will not be burdened with the outstanding loan repayment, in the unfortunate event of the member's demise. The insurer will pay a lump sum amount to the family and any excess amount over the outstanding loan amount to the nominee appointed by the group member.
The premium is paid to the insurer by the policyholder who may or may not collect the same from the individual members of the group. The premium, if paid by the individual can be deducted straight from the salary.
Members have the flexibility to choose between a level term cover and a reducing term cover. In case of the former, the cover remains equal to the initial loan amount throughout the policy term. In case of the latter, the cover reduces to match the falling outstanding loan amount throughout the policy term.
Depending on the cover option chosen (level cover or reducing cover), the members have the choice of regular, limited and single premium options.
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