What is Group Life Insurance and Why Every Employer Should Offer It?

Introduction

Group life insurance plan is a significant option for employers in the UAE to provide life insurance facilities to their employees without spending a huge amount. As the Federal Law in the UAE is getting stricter day by day, considering a workers’ insurance plan becomes mandatory for every employer. Looking at the present scenarios, experts suggest every business owner, without any further delay, should opt for cost-effective insurance plans like group life insurance in the UAE from any reliable insurance provider.

However, if an employer plans to opt for it, they must know all the essential details of this type of life insurance. Otherwise, they may not be able to leverage its full potential. Hence, this blog will cover the basic information on group life insurance in the UAE. It will also shed light on what the insurance plan is and why employers should offer it to their employees. 

What is a Group Life Insurance Plan?

A group life insurance policy in the UAE is a cost-effective yet beneficial way for employers to secure employees’ well-being. In many cases, start-ups or small businesses find it tough to provide a worker’s compensation insurance package for every individual employee due to various reasons. One of the major reasons is the high cost of premiums. Also, managing individual insurance for each employee might be daunting for the authority with a limited workforce and a huge list of business chores

However, businesses, whether they are small-scale or large enterprises, do not have to face all these troubles if they opt for group life insurance plans for their employees. A group life insurance plan is a policy that provides life insurance coverage for a group of employees in an organisation to meet their potential financial needs in case of any workplace accidents, critical illnesses, and so on.

It is a single contract that broadly covers claims for death, injuries, and disabilities of any employee who is a member of that group. It pays a certain amount to an employee’s family members if that employee passes away due to workplace accidents.

Different Types of Group Life Insurance Plans in The UAE

Leading insurance companies in the UAE provide various group life insurance plans that employers across industries can obtain according to their needs. These plans come with various coverage limits and terms.

Mostly, there are two types of group life insurance plans available in the UAE.

• One is a plan in which only employers contribute to the premium amount. They often offer it along with other allowances while hiring employees. Although coverage is limited in such plans, they can make the new employees feel secure in the company.
• The second plan requires contributions from employees and employers. In this plan, a percentage of the premium is deducted from employees’ salaries while the employer pays the rest. Often, these plans have higher coverage ranges. 

Reasons Why Employers Should Offer Group Life Insurance

Many start-ups and small business owners consider group life insurance an unnecessary expense. However, not offering such insurance to employees may negatively impact their business structure. This section discusses why employers should start offering group life insurance to their employees.

Brings Mutual Trust:

One of the primary driving forces behind running any company is trust. Group life insurance that involves each employee’s interests collectively creates and retains a bond of trust between employer and employees.

Builds Strong Reputation:

It is the reputation that can make or break a business. If any workplace accident happens with any employee that the employer fails to compensate, the business’s reputation is at stake.

Increases the Chances for Employee Retention:

Start-ups and small organisations often find their employees leaving the company for various reasons. Providing them with financial security and making them feel valued for potential accidental hazards at the workplace can help them retain their presence in the company.

Boosts Employees’ Morale:

Workers can work peacefully when they know their medical needs are covered under secure insurance. It enhances their productivity as well.

Helps Employers Fulfil Ethical Responsibility: 

Whether it is a start-up company or a large enterprise, employers always have certain social and ethical responsibilities. One of the major responsibilities is taking care of the people who work for them. Group life insurance can help them fulfill this responsibility.

Final Thoughts

Group life insurance is more like a long-term investment for SMEs than just an insurance plan. It develops a strong bond of trust with existing workers while attracting new talents. When individual insurance plans like workers’ compensation insurance seem a bit costly or complex, group life insurance can be an alternative.  However, purchasing insurance packages from leading companies like CoverB, which have proven track records of hassle-free claim processing, is important.
Connect with experts at CoverB today for tailored insurance service for all your needs!