Start-ups and small businesses face a huge challenge of attracting and retaining top talent in today’s competitive business environment. Offering higher salaries is an option, but it’s a smarter and more sustainable way to tell employees that you value their contributions than to offer them comprehensive benefits. One of the most beneficial benefits is group insurance plans in particular, group term life insurance plans are a great way.
In this blog, we take a deep dive into why group insurance plans are great for small teams and start-ups, the ways they work, and their big benefits.
What is Group Term Life Insurance Plans?
Let’s discuss in detail “What is Group Term Life Insurance Plans“. Group-term life insurance is a type of life insurance which covers a group of people with only one policy. The company offering it is typically an employer, and it gives the employer’s employees’ families a lump sum amount under the policy term if the insured employee passes on prematurely, i.e., when the policy term comes to an end.
Unlike individual life insurance policies, group term life insurance plans are:
- Employer-sponsored: Most of the premium is paid by the employer.
- Affordable: Since the policy is collective, premiums are much less than individual plans.
- Customisable: Additional riders — such as accidental death, disability or critical illness benefits — may be added to the plans, too.
Group insurance plans (group health and group term life) are especially beneficial for young start-up companies with limited budgets but a desire to provide employee benefits.
Why Startups and Small Teams Should Choose Group Insurance Plans?
1. Financial protection as a cost-effective remedy
Group insurance is a lot cheaper than individual coverage. This is a massive advantage for startups who run on a shoestring budget. Because the risk is spread across many employees, the rates are competitive for insurance providers and friendly to employees.
2. Attract and Retain Talent
More often than not, startups are competing with bigger corporations for more skilled employees. Group insurance plans make you more valuable, you add the feature of employee welfare. It certainly can help with recruitment and increase retention rates.
3. Improved Morale and Productivity of employees.
Employees know that their employer is aware of the value that their well-being brings to the organisation. It means that this kind of assurance allows teams in their infancy to develop higher morale, job satisfaction, and productivity, all keys to growth.
4. Options for Comprehensive Coverage
Many group insurance plans can be expanded beyond basic life coverage to include:
- Group health insurance: Pay treatments for the employees and their families.
- Critical illness insurance: Providing monetary means in order to help combat and survive severe illnesses.
- Disability riders: Ensuring that there will be income continuity in situations of temporary or permanent disability.
Holistic coverage outputs increase the perceived value of benefits packages.
5. Tax Benefits
Group insurance plans make it tax-beneficial both for employers and employees. Employers pay premiums and it’s a deductible business expense, employees enjoy tax-free benefits under Section 10(10D) of the Income Tax Act.
How Group Insurance Plans Work?
1. Employer Buys the Policy
It means that the employer works out with an insurance provider that the plan they want to have bought protects all that is included within the scheme.
2. Premium Payment
Employers can pay wholly or partially for premiums. Most of the time it depends on the number of staff, how old they are on average and what amount of coverage.
3. Coverage Activation
Coverage is usually active, covering all employees as long as the employee remains in the organisation.
4. Claim Process
If an employee dies, the insurance company pays the sum assured to the nominee, for whom the employee has listed, in the unfortunate event.
Group Insurance Plans for Small Teams – Best Practices to Implement.
1. Understand Your Team’s Needs
Typically, start-ups have expansive teams with different financial priorities. Survey or chat with them to find out how they want their life and health coverage.
2. Choose the Right Provider
Compare and research insurance providers. Find flexible policies, competitive premiums and strong claims settlement ratio.
3. Focus on Flexibility
As your team grows, choose plans that will allow you to add or upgrade. Scalability will ensure that your benefits package grows with your start-up needs.
4. Educate Your Employees
Let your team understand that group insurance plans offer some benefits. To highlight the coverage details, riders and tax benefits, so that they understand the worth of this offering.
5. Review Regularly
Check periodically the policy to remain consistent with your team’s needs and market conditions.
Conclusion
For start-ups and small teams, comprehensive group insurance plans are a win-win. These plans give employees and the employees’ families financial security while businesses attract and retain top talent in a very competitive landscape.
Group-term life insurance plans are specifically designed to provide affordability along with impactful protection, allowing even small companies to provide meaningful benefits. Starting from such policies which work to prioritise employee welfare, start-ups not only create a secured team but also lay the foundation to withstand the rise of time.
As a start-up founder or small business owner, now is the best opportunity to start looking at group insurance plans and the first step towards a happier, healthier, and more motivated workforce.
