Group Life Insurance is a type of term insurance in which a single contract is issued to cover numerous persons.
The insurance is typically owned by an employer or another body, such as a labor union, and protects the employees or members of the group.
In most circumstances, the cost of group coverage is far less than what the members would pay for individual insurance. So, if a company or group you’re part of offers group life insurance, you should consider it, especially if you have no other life insurance or your coverage is insufficient.
Is Group Life Compulsory in Nigeria?
The Pensions Reform Act of 2004 makes group life insurance mandatory in Nigeria (PRA 2004). Section (9) subsection (3) of the Act requires employers to maintain a life insurance policy for their employees that is at least (3) three times the employees’ yearly total remuneration.
Why do organizations choose Group Insurance Policies?
Organizations that realize the dangers their employees may encounter choose group insurance coverage to protect them. Investing in group insurance coverage allows organizations to ensure that their employees can focus on growing and strengthening the company rather than worrying about their safety and financial security.
How Does Group Term Life Insurance Work?
This insurance coverage protects people, independent of age, employment, gender, or socioeconomic situation under a single insurance policy.
This implies it cannot be tailored to individual unique requirements. A single policy may include a death benefit equal to one or two times your annual pay, or the benefit may be a predetermined sum for everyone in the group.
A group plan’s premiums are much lower than if the life insurance plans were purchased individually for the same number of persons.
What are Group Life Insurance Requirements?
Conditions are usually attached to group life insurance contracts. Some organizations need group members to participate for a set period before receiving coverage.
For example, an employee may be required to complete a probationary term before becoming eligible for employee health and life insurance coverage.
Coverage is often only valid for the duration of a member’s membership in the organization. The coverage ceases when the member quits, whether by resignation or termination.
Can I get group life insurance from sources other than my employer?
Yes, if you are a member of an alumni association, trade group, professional society, or other organization, you may be eligible for group life insurance. In addition, unlike employer-based insurance, it will be transferable if you move employment.
What are the advantages of having a Group Life Insurance Plan as an Employee?
1. ‘Free’ Life Insurance
In comparison to an individual life insurance policy, a group life insurance policy is not paid for by the individual, but by the organization or association so it is ‘free’ in quote.
2. There are no prerequisites
Individual life insurance plans are issued after the insurance company evaluates numerous variables, including your living choices and medical history. A group life insurance policy, on the other hand, has no prerequisites.
3. Simple claim settlement process
The policy’s claim settlement process is typically swift and simple. To begin the claim settlement procedure, the employee or their beneficiaries must only provide the necessary papers.
What are the advantages of having a Group Life Insurance Plan as an Employer?
1. Low premiums
Employers are responsible for paying the premiums. Employers can drastically reduce their costs by choosing group insurance policies to cover the same number of employees instead of obtaining individual life insurance plans.
2. Strong employee retention
Although this criterion is legislative, many businesses still fail to meet it. As an incentive, having the protection of a group life insurance policy has been shown to minimize staff turnover, enhance employee retention, and raise overall loyalty and productivity.
3. Employees’ high morale
Group insurance coverage provides employees with protection and peace of mind, allowing them to focus on the important responsibilities at hand.
Bottom Line
Group life insurance is a type of policy offered by large organizations and groups to their members. As part of its benefits package, it pays a death benefit if the insured person dies while the policy is in effect.
Interested in getting a Group Life Insurance plan for your staff or members, please send an email to or call 01-2800700.
