Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.
Reviewed By :
Prasad Pimple
Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors
Published on : Oct 20, 2021
Being a new-age employee, you live in a time where your workspaces can give you bean bags and a cozy work environment, making you feel valued, productive, and purposeful. As a result, you are looking not just for a job but all the extra perks and quirks that come along with it. So, though the paychecks you take home play a significant role, the additional benefits that your employer offers can either make or break the experience.
When it comes to making your staff feel cared for or providing them with additional means to fulfill their expenses, offering employee-specific life insurance policies proves highly beneficial. These policies not only help reduce their financial stress but also renders a sense of comfort and protection. That being said, there are different options to choose from, which can be overwhelming. Furthermore, one other significant factor that affects your decision of choosing a policy is family life insurance. So, read along to understand the difference between voluntary life insurance premium and group life insurance policy and which one should you opt for.
Voluntary Life Insurance
Voluntary life insurance is a type of financial protection that gives death benefits to a beneficiary if the insured passes away, which employers offer to their employees as an optional benefit. The employee pays a monthly life insurance premium in exchange for the insurer’s payment guarantee upon the insured’s demise. As a result, premiums for voluntary life insurance policies are often less expensive due to employer sponsorship than individual life insurance premium. In addition, many insurance companies provide optional life cover with extra features and riders. A plan might, for example, allow top up cover over the guaranteed issue amount. In addition, policyholders may be asked to produce proof that they fulfil minimal health criteria, depending on the increase. Another is coverage portability, which refers to a policyholder’s ability to keep their life insurance policy once their work ends. For transferring a policy, each employer has its own set of rules. It usually takes one to two months following termination, and it necessitates the completion of documentation.
Group Life Insurance
An employer or similar large-scale entity, such as an association or labour organisation, may offer its employees or members group life insurance. This life insurance policy is so popular because it is affordable, at times even free, and it’s relatively widespread all around the country. However, it often comes as a more extensive employment or membership benefit package and hence low coverage. Companies can secure substantially cheaper charges for each employee by purchasing group life cover from an insurance provider on a wholesale basis for its members. Group life insurance recipients may not be required to pay anything out of pocket for policy benefits. People who wish to add more comprehensive coverage to their plan can have a portion of their life insurance premium taken from their income. Before the policy takes effect, covered parties must name one or more beneficiaries, just like with standard insurance plans. Policyholders can change beneficiaries at any time throughout the policy term.
Difference between Voluntary and Group Life Insurance
Basis
|
Voluntary Life Insurance
|
Group Life Insurance
|
Coverage
|
Covers single person
|
Covers multiple people
|
Eligibility
|
Available only for employees
|
Not restricted to employees but also other groups like NGOs, bank customers, etc.
|
Life Insurance Premium
|
Low premiums
|
Relatively lower than individual plan premiums and at times even free
|
Customisation
|
Provides customisation options
|
Provides coverage extension with rider benefits
|
Benefits
|
- Can be purchased online
- Non-medical rates are lower
- Provides rider benefits such as accidental death rider, critical illness rider, etc.
- Tax benefits can be availed
|
- Medical checkup not required
- Tax benefits can be availed
|
Just like any other policy, employees should weigh the pros and cons of buying life cover under voluntary and group life insurance. Since the future is unpredictable, it is crucial to have a life insurance policy to keep your family financially stable.
