Quick answer: Group term life insurance (GTL) is one policy for your whole team that pays a fixed sum to an employee’s nominee if they die in your employment. It has no savings element and ends when employment ends. In India it is optional. The only statutory life cover is EDLI, which pays between ₹2.5 lakh and ₹7 lakh through EPFO.
- EDLI costs you 0.5% of PF wages, which is ₹125 a month at the ₹25,000 ceiling.
- The EDLI maximum stayed at ₹7 lakh after the September 2026 ceiling change.
- A ₹50,000 EDLI minimum applies where the member had under one year of service.
- No Indian law requires group term cover above EDLI.
How does group term life work for Indian employees?
You set a sum insured for each employee, pay one premium a year, and the insurer pays the nominee on a death in service.
Cover is usually a fixed rupee amount or a multiple of pay that you choose. There’s no medical test for most members of a large enough group. The gtl meaning in an Indian offer letter is exactly this: a death benefit, nothing paid back at the end.
It sits alongside group medical cover in most benefit packs, but the two work differently. GMC pays bills. GTL pays a lump sum.
Why isn’t EDLI enough life cover?
Because EDLI is capped, and your senior hires earn far beyond the cap.
The EDLI scheme was built as a floor. The 2025 changes raised the protection for short-service and between-jobs cases, as the Labour Ministry release on the CBT decisions explains. They did not lift the ₹7 lakh ceiling.
Suppose a Pune engineering lead earns ₹30 lakh a year in fixed pay. You decide to cover two years’ fixed pay.
| Layer | Payout to the family |
|---|---|
| EDLI (statutory, through EPFO) | Up to ₹7 lakh |
| Group term life at 2 × ₹30 lakh | ₹60 lakh |
| Total death-in-service cover | Up to ₹67 lakh |
Without the group policy, that family gets at most ₹7 lakh. The multiple is your call. We haven’t quoted market multiples here because they change with every renewal.
How is group term insurance for employees taxed?
The answer depends on how the policy is set up, so check it before you promise “tax-free”.
Section 17(1)(g) of the Income-tax Act, 2025 on perquisites treats a sum the employer pays to effect an assurance on the employee’s life as a perquisite. The death payout itself goes to the nominee.
Wording matters. Ask your tax adviser how your policy wording fits, and record the treatment in payroll.
Also note a common gap. Many foreign employers add accident cover but skip life cover, or the reverse. Group personal accident insurance pays only on accidental death or injury, not on illness.
How does Remunance provide group term cover for your India team?
As your employer of record, Remunance files EDLI every month in the ECR and can add group term life on top through our benefits administration team. Premiums pass through at cost. We have hired 1,200+ employees for clients across 34 Indian cities, so we can quote cover for a team spread well beyond Pune. Our overview of employee benefits in India shows the full stack. To size a life cover plan, book a free benefits review.
What else do people ask about group term life insurance?
Is group term life insurance mandatory in India?
No. Only EDLI is statutory, and it comes with EPF membership. Group term cover above it is your choice. Many employers treat it as a non-statutory benefit worth offering.
Does group term cover continue after an employee resigns?
No. Cover stops on the last day of employment. The employee would need an individual term plan.
Who receives the group term life payout?
The nominee the employee registered with the insurer. Keep nominations current, because a missing nomination slows the claim.