Group Term life insurance is a type of term life insurance policy which covers the life of the insured members against death or disability in return for a nominal amount known as premium. The group term life insurance is given to organizations which have employee-employer relationships where the employer purchases a group term life insurance for his/her employees. The sum assured under the group term life insurance is usually decided by the employer based on the last salary of the employees. The sum assured under the group term life insurance would be a certain number multiple of the employee’s salary. Since the salaries would differ among the employees there would be a salary range or grade range in which the employees falling under the same range have the same coverage.
Here is a step by step process explaining the working model of group term life insurance policy:-
Step 1: The first step in the working model of group term life insurance is where the customer would get the quotes from different insurance companies. The customer can either engage the agents or insurance brokers who are known as the insurance intermediaries. The insurance brokers would help the customer with quotes from different insurance companies. The insurance companies would require member data to provide the quotes.
Step 2: The next step is to finalize the insurance company with which the customer is willing to purchase the group term life insurance policy. Once the insurance company is finalized then the insurance broker would help in negotiation of premium with the insurance company on behalf of the customer.
Step 3: In the next step the customer would make the premium payment to the insurance company and get the term life insurance policy. The risk coverage starts once the premium is received by the insurance company and acceptance is given for the risk coverage. The insurance company also provides health cards to the members of the group term life insurance policy which can be utilized at the time of claim settlement.
Step 4: The next step in the process is to get the required claim assistance in case of death or disability of a member of the group. The insurance company would require the documents related to the claim such as death certificate, postmortem certificate, FIR, Panchanama report and any other hospital bills in case of death of the policyholder. In case of disability the documents required are First Information Report, Disability certificate from an approved doctor etc. These documents should be sent to the insurance company with the duly filled and signed claim form by the insured customer.
Step 5: The last step is the insurance company would verify the claim and then settle the claim to the nominee of the policyholder in case of death of the policyholder or to the policyholder in case of accidental disability of the policyholder. The policy would continue till the expiry of the policy period as it is a group health insurance policy.
