GROUP INSURANCE AND RETIREMENT PRODUCTS

Group insurance is a unique product which offers life insurance protection to a group of people under one policy contract. 

These policies are used by employers, associations, societies etc., and they help people enjoy life insurance benefits at very low costs due to the economies of scale available when insuring large groups of people. Life Insurance Corporation of India (LIC) has the following schemes available for groups:1 Life insurance and retirement schemes for groups 

(i) Group term insurance schemes 

(ii) Group insurance scheme in lieu of EDLI 

(iii) Group critical illness rider 

(iv) Group saving linked insurance scheme retirement schemes 

(v) Group superannuation scheme 

(vi) Group gratuity scheme others 

(vii) Group mortgage redemption assurance scheme The above schemes include life insurance and retirement plans. Employees are the beneficiaries of these schemes and so these plans are also called employee benefit plans. 

Products like the group mortgage redemption plans are available for groups of individuals taking loans from a financial institution. Individual insurance plans are also marketed to employees and employers. These are also discussed in this Chapter. 

Employee benefits and other group insurance products constitute a major portion of business for life insurance companies. These products are generally marketed directly and intermediaries are not used for selling group products. Lower distribution costs and potential of large contracts make this a lucrative market. 

Employers voluntarily offer many group insurance and pension benefits to their employees due to tax benefits usually associated with such products. 

The employee benefits products works in two ways. In some cases, the employer pays the entire or part of the cost of insurance or pension. In other cases, the employer sets up the benefit plan under which an employee can elect to participate by paying the full cost of his coverage. Some employer-provided insurance benefits for situations like death, accident, illness or retirement are a part of statutory requirements mandated by law.