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Group Life

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Personal accident policy mentioned earlier does not cover death from natural illnesses. To ensure the family of the employee is not left destitute, many companies do provide group life cover for their employees. It is an important employee benefit policy. For the benefit of all insuring people it is important to explore more of life policies.

There are now several types of life policies to meet specific needs. The main classifications are as follows:

    (i)    Whole life- the benefit under this policy is payable only on death of the life assured. It is meant to provide some income to the family should the bread winner die prematurely.
    (ii)   Term assurance policy- this policy is taken out for specific reasons. One of these is to provide security for mortgages or some other loans.
    (iii)   Endowment policy – this policy is taken out as an investment. It is taken out to provide income at a certain date in the future. It can be with profit or without profit.
    (iv)   Children’s  policies – these are taken out to meet school fees for the children. They are arranged to mature at certain time when the need of children’s education is highest.

Life policies are not policies of indemnity. The sum assured is determined by how much the assured can afford to pay as premium.