Is Group Term Life Insurance Taxable?

Is Group Term Life Insurance Taxable

What Is Group Term Life Insurance?

A form of insurance cover known as group term life insurance offers life insurance to several people under a single policy. It provides the beneficiaries with financial security in the sad event that something unfavorable occurs to the insured individual throughout the coverage term.

How Is It Different From Individual Term Life Insurance?

A group term life insurance caters to a group of people whereas an individual term life insurance caters to individuals. All of the company’s employees are covered by a single plan under a group insurance policy. The employer completes all of the paperwork necessary to obtain life insurance. Individual life insurance, as the name implies, solely protects you (and in some cases, your spouse)

Who Pays The Premiums?

The premium for a group term life insurance is often split between the employee and the employer.

Are There Any Tax Implications

Group term life insurance has tax advantages for both businesses and employees. The Income Tax Act of 1961’s Section 10(10D) currently in effect exempts death benefits from taxes. Additionally, employee retention and well-being are effective outcomes of group insurance programmes.

What Are The Benefits Of Group Term Life Insurance?

The same benefits that group term life insurance policies provide for employees also apply to businesses.

  • Employers that have group term life insurance can easily pay their gratuity liabilities. Strategically created gratuity funds are used to pay for further gratuity payments, relieving the employer’s burden.
  • When determining returns on investment, the client’s chosen funds’ performance will be taken into consideration.
  • Group term life insurance policies are more reasonably priced in India since group scheme management is less expensive.
  • Higher returns from better-performing funds will result in cheaper costs for the employer.
  • Some programmes offer life insurance coverage and gratuity payments to employers.

How to enroll in a group term life insurance policy

Employers often contact insurance providers and take quotes on various available policies. Upon finalising, they decide and continue to do the paperwork

How can you find out if your company offers a group term life insurance policy?

You can directly as your human resource manager if the company provides insurance. You can also talk to the finance team about the same.

Get Expert Advice from Insurance Consultant

If you are looking to buy a term insurance for your employees and want to explore all the options available. We are happy to help you. Reach out to us for more information.  Secure Your Employee’s Families with Group Term Life Insurance.


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