Group Life Insurance UAE & Dubai - Types of Plans & How Do They Work
| Published: 15 September 2020 | Last Updated On: 30 July 2021
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The members of a group are a paramount asset. Thus, they and their families ought to be safeguarded against any kind of financial liability. Group life insurance plans are cautiously made to provide financial security to the members of an organization and their families.
What is a Group Life Insurance Plan?
Group life insurance is a cost-effective, group plan offered to employees of an organisation and their family members to safeguard their financial interests in case of accidents, death, critical illness or disabilities. It is often provided by an employer to its employees to foster a sense of goodwill and trust between both the parties involved.
Group life insurance is provided on a yearly renewable term and the premium is paid by the employer. The amount of coverage is almost equal to the employee’s yearly salary. On the termination of employment, the group life insurance plan is also terminated. However, the employee has an option to convert his/her group life insurance plan to an individual life insurance plan and take it forward.
Types of Group Insurance Plans in UAE:
Employer Contribution Plans - It is provided and purchased by employers only. Employers offer it with the hiring packages to make the employees feel financially more secure.
Employee Contribution Plans - It requires contribution from the employee’s end, along with the employer. Such plans have a broad range coverage to keep the policyholders financially secure in times of uncertainties
Features of Group Life Insurance
The following are some general features of these policies. However, they can vary from one insurance provider and employer to another.
Eligible Age - Generally, the minimum age for entry is 18 years and the maximum age can vary between 65 to 69 years.
Coverage - Many of the group life insurance plans provide coverage to the employee for the basic salary along with any other compensation such as bonuses, etc. However, the coverage offered varies across the employers as well as the position of the employees in the organizational hierarchy.
Cost of Premium - The premium contributions are either made entirely by the employer or are shared with the employee. The amount is deducted from his or her salary during the tenure of employment. Most of the plans have set premium cost bands in which the charges increase with the age.
Portability - As the current employment offers this coverage, the cover is automatically terminated as soon as one leaves the current job.
Benefits of Group Life Insurance
The following are some of the benefits of opting for a group life insurance plan:
Default Coverage - The group life plans provide automatic coverage to anyone who is part of the group. Such a policy helps in ensuring the basic and minimum life coverage to those individuals that do not hold any life insurance policy.
Cover Limit - Irrespective of one’s health condition, insurance coverage is provided to all of the members of the group. It provides a good value, especially to those people that belong to a high-risk category or those who might be facing difficulties while buying a decent coverage plan.
Worry-Free Premium Payments - The premium for such plans is directly deducted from the salary of the employee, so there is no chance of missing out on any premium payments. It also helps in reducing the probability of a policy lapse caused due to non-payment. Some employers might also offer the policy without any charges.
Easy Payment Options - Depending on the entity, the employee can opt for premium payments to be made on a monthly, quarterly, semi-annual, or annual basis depending on what suits them.
The wellbeing of an Employee - It helps in the wellbeing of the employee and it also helps in providing the employee’s family with financial security if he or she is to be no longer around.
Extended Coverage with Add-ons -The scope of coverage can be expanded by adding on the optional riders provided by the group life insurance provider. The add-ons help in providing comprehensive coverage.
Cost-Effective - Since a group life insurance plan covers numerous individuals under one policy, the premium of such a plan is much lower as compared to the premiums of an individual coverage plan.
Global Coverage - Group life insurance policies offer coverage all across the globe.\
What are the key benefits of a Group life insurance plan?
Group life insurance offers two-dimensional benefits for employers and for employees.
Group Life Insurance For Employers:
It ensures financial security to the employees of the company in a cost-effective manner. Employers purchase security for a group making the plans more affordable overall.
It builds mutual trust and loyalty between employers and employees.
The process of administering a Group life insurance plan is comparatively simple.
Group Life Insurance For Employees:
It provides financial security and support to employees’ families in case of emergency.
It has a free cover limit which implies a maximum amount of life cover that can be given without undergoing any medical examination.
The members of the employees’ group get an option to select the sum assured on their own. Either as a lump sum amount or as a salary account or loan account.
What are the emergencies under which group life insurance plans work in UAE?
Death by accident - An untimely death due to an accident. Accidents are situations that can’t be controlled such as a slip and fall, traffic crash, or unintentional exterminating. To be more precise car crashes, slips, choking, machinery incident, drowning, and any other situation deemed ‘uncontrollable’ fall in this category. The policyholder’s beneficiary is extended support in such death incidents.
Unexpected permanent disability - Permanent disability means that someone is completely disabled because of his/her injury or work-related illness and can no longer work in the capacity and ability for which they were trained.
Unexpected partial disability - Partial disability means that the worker is still able to function in his or her chosen work, but not at full ability/capacity.
Critical illness - It is coverage for medical emergencies like heart attack, stroke, or cancer. These emergencies or illnesses often incur more than average medical costs.
Additional Benefits of Group Life Insurance:
The policy includes repatriation of mortal remains of the beneficiary policyholder (employees) to their home country.
Medical transportation or sending medicines abroad to beneficiaries.
Early returns in case of death of any relative or family member.
Note: These benefits vary from company to company.
Who can purchase a Group life insurance plan in UAE?
Non-Bank Financial Institutions
Informal Groups of Employee-Employer
How does a Group life insurance plan work in the UAE?
A holder client/customer/company pays the premium to the insurance provider and purchases the insurance.
Premium will depend on the number of group members of a company/organisation considered for the Group life insurance plan.
Premium increases proportionally with member coverage.
In exchange, the insurance company guarantees to pay a sum assured to the policyholder’s family in case of an untimely death of the policyholder during the policy period. It assures financial support to the policyholder’s family members.
If the policyholder survives the life insured until maturity, a maturity benefit will be paid to the policyholder. (Note: It depends on the type of policy and whether or not it offers maturity benefits.)
It is annually/yearly renewable.
Steps to Buy a Group Insurance Policy & Apply for a Group Insurance Policy
There are various insurance companies in the UAE offering Group life insurance plans. To get an insurance policy for all the members of the group, you can visit the nearest branch of the company or simply call on their respective phone numbers to get the quotations.
Identity proof of all the members is a must and needed to be carried along. Generally, medical certificate is not required for Group life insurance.
Some leading companies offering Group life insurance plans:-
You can take a look at policybazaar.ae to compare and choose the best group life insurance plans. All you have to do is just keep a few details and documents ready with you. Here’s a list:
Identity proof of all the group members
Registration certificate of organisation
Bank details for the payment
After choosing the best suitable insurance plan, you can easily make payment by using net banking. A soft copy of the insurance cover will be sent to the registered email id or can be downloaded from the website itself.
Eligibility Criteria for Group Life Insurance Plan
Group life insurance is provided to numerous categories of the working class such as employee-employer groups, professional groups, non-employee-employer groups, non-banking institutions, among others. The group life insurance eligibility criteria vary from one category to another, depending on the terms and conditions of the policy and the insurance provider. While some plans might just offer basic coverage, others might offer upgraded coverage depending on the professional ranking of the members or their positions.
Minimum Age for insurance: 18
Maximum Age for insurance: Vary between 65 – 69
As the policyholder leaves the job, the insurance is automatically terminated. However, the policyholder can convert the Group life insurance policy to individual life insurance by paying some extra amount to the company.
For that, the person is required visit the nearest branch of the insurance provider.
Documents Required to Apply for Group Life Insurance Plan:
Registration certificate of organisation
Medical certificate in case of any specific uncertainty to any member
List of members of the group
Past three year’s claim (if available)
Identity proof of all the members of the group
Best Group life insurance companies in UAE 2021
A lot of companies in the UAE are providing customized services according to the buyers’ ever evolving needs. Here’s a list of their names and website URLs:
Friends provident international Insurance
With the help of a single contract, you can offer insurance to an entire group of employees. Group life insurance plan is not just budget friendly for employers but for employees as well, as they do not have to purchase individual insurance by paying more. It is a complete employee benefits package. For more information about your and your employees’ financial safety, you can visit policybazaar.ae and get your hands on some of the best deals provided by the top insurance providers. Here, you can compare plans and take an informed and cost-effective decision.