Important Points for IC 83 - Group Insurance and Retirement Benefit Schemes Exam
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In individual pure term policies, the policyholder pays the premium for given sum coverage and Insurer agrees to pay the sum assured in case the event happens as per policy terms and conditions.
Group insurance is cost efficient because of the following reasons: Proportionally lower commissions to sales intermediaries, Lower acquistion expenses, By its nature pre-empts the need for individual underwriting, Makes use of a single contract with the plan sponsor instead of having to issue individual policies to each member.
The concept of group insurance developed due to some of the employers parental approach towards their employees and availability of insurance cost effective manner.
In Group insurance, there is a requirement of evidence of insurability. This is to avoid selection against the insurer by the sponsor.
Group insurance typically consists of one-year renewable term life assurance that pays a fixed benefit to nominee(s) upon the death of the employee.
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