Choosing Between Term Life and Accidental Insurance for Employees: Which Is Better and Why?

As an HR professional of an IT company, I am planning to introduce a Group Life Insurance policy for all employees. Currently, our company has been offering a Group Mediclaim Policy for all existing employees. Now we are planning to add one more employee benefit to our offerings.

Options for Group Life Insurance

I am in the process of reviewing two options:

1. **Group Term Life Insurance for All**: This provides coverage to the policyholder against death.
2. **Group Personal Accidental Insurance**: This provides policyholder coverage against death and disablement (permanent, total, partial) due to any accident.

Can anyone please guide me on which option would be better and why? Additionally, which companies offer these policies for their employees?

Thanks in advance.

Regards,
Shilpi

What I suggest is that with a little extra premium, you can also cover family members under the insurance shell, such as medi-claim. This is something you can certainly offer, perhaps on a sharing basis.

I think whatever policy you provide, whether it is Life Insurance (LI) or Group Personal Accident (GPA), you should see how many employees already have such policies personally and how many benefit from it. As one of our friends suggests, GPA is cost-effective, and most of them do not have it. Besides, if you have a budget for this benefit, you may enhance the Mediclaim with a floater policy.

In fact, you can provide all three of them without exceeding your budget to a huge extent. Correct me if I'm wrong, but I think Group Mediclaim and GPA can be clubbed together with a very small amount of extra money.

Benefits of Group Mediclaim and GPA

Group Mediclaim helps you to remain alive through medical treatment. GPA not only helps your family in case of accidental death but also in cases of disability and the loss of earning in proportion while one was being treated for the accidents. This helps one again when alive.

Purpose of Group Term Insurance Scheme

The Group Term Insurance Scheme is meant to provide life insurance and helps one's "Family" after the death of the "Insured," when they not only suffer a personal and emotional loss but also a monetary loss if the person was earning prior to death.

Hence, if your management and budget allow, go for all three of them and give whole coverage to your employees - a Great Welfare to them.

Thanks and warm regards.

You can cover both options. Insurance companies refer to it as GLPA (Group Life Personal Accident cover), which provides comprehensive protection for employees. Please check with them, as it generally covers the following benefits:

• Death due to any cause
• Additional Accidental Death Benefit
• Permanent Total Disability Accident & Sickness Own or Similar Occupation Definition (12 months)
• Permanent Partial Disability Accident & Sickness as per the continental scale of benefits
• Temporary Total Disability - Accident: Nil Day waiting / 52 weeks / 100% actual weekly basic salary
• Temporary Total Disability - Sickness: 7 Days waiting / 52 weeks / 100% actual weekly basic salary

Regards,
Sriram

I agree with you, Pon. In fact, as the Factory Medical Officer, this is exactly what I keep suggesting to my internal clients within the plant with a little difference.

Our company has covered all of us under Group Mediclaim with a variation according to position. However, with the rising cost of treatments and an increase in "Lifestyle Diseases" such as high blood pressure, heart ailments, diabetes, and cancers, the coverage provided by companies may not be sufficient. Therefore, I always advise my employees and others that if possible, they should first opt for a personal Mediclaim and gradually increase it with age. This helps in ensuring one's well-being while alive.

Subsequently, I recommend opting for Life Insurance, which provides for the family in case of death. It's important to note that many people are often presented with "Money back" policies or investment plans combined with a small amount of Life insurance, which may seem preferable. However, it's crucial to understand that "Insurance is not an Investment Portfolio." There are better investment options available in the market. "Insurance" should be viewed as Life Coverage, which offers higher payouts after death, even if it doesn't yield returns while alive.

I hope I'm clear.