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Discontinuation of Company Group TERM Insurance Plan

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27 May, 2021 by  Sanjay Viswanadha

Hi All,


I have a group term insurance plan with Aditya Birla from past 2 years and its due for renewal next month. I was updated by my company that you will receive a call from Aditya Birla and they will intimate you with few changes.

  1. I received the call from Aditya Birla and they say that due to this pandemic there are some changes made and you cant continue the existing Group Term Insurance Plan which your company offered and need to move to new individual term insurance plan.
  2. The earlier premium was Approx 8,000/- plus and now they say its Approx 20,000/- plus.
  3. They say IRDA has asked to discontinue the Group Term Insurance which I am not sure :)


My query is I have paid premium for 2 years and now whether the company can bluntly discontinue the policy. If YES nothing much to do :) If NO can you please guide me how to take it forward.


Appreciate your expert guidance on this.


Regards

Sanjay

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1 Answer

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27 May, 2021
Self Employed - Digital Consultant

Sanjay,


I doubt if there is an IRDAI regulation to this effect. But, regardless of the IRDAI regulation, a Group Term Insurance contract can be terminated at the time of renewal by both your Company & the Insurer. Unlike Individual Term, a Group Term policy is an annually renewable contract which can be called off at the time of renewal. Same is the case with Group Health. This is why it is always advised to buy your personal insurance covers. The Company provided Insurance covers should be treated as a bonus.


Instead of migrating to the individual term offered by Aditya Birla, I would recommend that you compare Term Insurance from various Insurers on an aggregator website like Policybazaar & carefully opt in. Because, in any case, there is no continuity benefit that you get while moving from a Group to Individual Term.


Hope this helps. Best Wishes,


Asad Akbar



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27 May, 2021
Sanjay Viswanadha
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27 May, 2021
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