HomeMoney & FinanceHow employers can choose right group term insurance for their employees

How employers can choose right group term insurance for their employees


With corporates employing a sizable workforce, it is a responsibility to take care of themselves and the organization along with its employees, and often their dependents and families. The past spate of infections has established how dreadful pandemic-led mortality can be. While it is important to stay safe and protected, one should also prepare for the worst-case scenario.

Raghuveer Malik, BU head- corporate insurance, Policybazaar.com, said that amid Covid times, term insurance has come to the rescue of many. Term insurance, known as the simplest and purest form of insurance, has accelerated adoption among large and small corporates alike. It helps companies cast a wider safety net and makes employees feel secure and valued. “Group term insurance has understandably become an essential component of compensation packages to ensure financial security for employees’ dependents. Usually, most companies offer basic coverage to employees for free of cost. Further, the employers give employees an option to add extra coverage, features, riders or benefits as required for an added cost,” said Malik.

Here’s a round-up of features to look for in a group term insurance for your employees during these times.

Providing comprehensive coverage

As mentioned earlier, companies usually provide basic coverage as the policy is based on the cumulative risk of the group as a whole. However, the times we are living in are like nothing we have seen before. The workforce across the country has battled several challenges – economic downturn, slashed pay-cheques, rising medical inflation, increased work and mental pressure, dealing with the loss of lives and finances among several others.

“In many cases, the earning member is the sole breadwinner of the family. The unfortunate death of the employee can wreck the future of the entire family. Also, many people just rely on the coverage provided by their employer – be it health or term insurance. Due to lack of awareness or affordability, they often don’t opt for an individual policy. All these factors can be a disaster in making if they don’t have enough coverage for their dependents. Given these times, it’s best to go the extra mile and provide sufficient coverage in a group term insurance policy,” said Malik.

Focus on the 3 Ds – Death, Disease and Disability

Term insurance serves the sole purpose of providing financial support to dependents in case of the policyholder’s death. Unfortunately, people are not exposed just to the risk of death during these times, but also uncertainties arising from a long-term illness or permanent disability. Group term insurance policies are often not designed to cover the risk arising out of all three. In such cases, riders come to the policyholder’s rescue. For instance – The accidental disability benefit rider offers additional cover to the insured person in case of accidental disability. Similarly, critical illness rider helps provide an extra source of income in case the policyholder is diagnosed with a life-threatening condition like heart attack, stroke, kidney-related ailments or cancer.

Malik said, “Riders such as accidental disability benefit rider, critical illness rider, etc., can be made available to the employees at a reduced cost. Not just this, the employers can help raise awareness around these riders among employees and encourage them to opt for these for their benefit.”

Technology adoption: Need of the hour

Sanjiv Bajaj, joint chairman & MD, Bajaj Capital, said that since the Covid outbreak, remote work had been the new normal, making the employer-employee connection a distant one. Technology has come to the rescue of all industries in the world of social distancing. Corporate insurance is no exception. Adopting digital innovation can greatly help the employer and employees. A digitally automated process helps the employee and their family in distress and helps the company with faster and smoother claim processing.”

Technology also helps overcome the one-size-fits approach at workplaces regarding insurance. This holds especially true for small and medium-size firms with higher control over customization and flexibility in the policy depending on the company’s demographics, said Malik.



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