For founders and operators building businesses in India today, employee benefits are no longer a checkbox. They are a signal. A signal of how seriously you take people’s lives beyond the workplace, and how well you understand the realities they carry home every evening.
One benefit that often gets pushed to the sidelines- despite being foundational- is term insurance.
In early-stage companies and growing SMEs, benefits conversations usually start with health cover. That makes sense. Medical inflation is real, and access to care is a daily concern. But protection shouldn’t stop at hospital bills. For most employees, especially first-generation earners, the bigger fear is what would happen to their family if income suddenly disappeared.
That’s where the best term insurance plans earns its place in an employee benefits package.
Income Protection, Not Investment Theatre
Term insurance is simple by design. It pays a fixed sum to the nominee if the insured employee passes away during the policy term. No maturity benefits, no bundled returns, no confusing riders masquerading as wealth creation.
This simplicity is its strength.
For an employee earning Rs. 6-10 lakh a year, even a modest term cover can replace years of lost income for their family. Rent, school fees, EMIs, ageing parents- these responsibilities don’t pause for grief. A term policy acts as a financial shock absorber at the worst possible moment.
From an employer’s perspective, this is not about offering another “perk.” It’s about acknowledging that your team’s financial lives are fragile, and one event can undo years of progress.
The SME reality: Families Depend on One Paycheque
Unlike large corporates, SMEs and startups employ a high percentage of people who are sole breadwinners. Many don’t come from households with inherited assets or fallback savings. Yet, ironically, this is the segment least likely to buy personal term insurance early in life.
Why? Because insurance decisions are postponed until “things settle.” Marriage, a home loan, a child- life keeps moving the goalpost.
When employers step in and make term insurance part of the benefits mix, participation rises dramatically. The friction is removed. Medical tests, paperwork, and decision fatigue are handled at an organisational level. What employees get is peace of mind they may never have prioritised on their own.
Retention Isn’t About Foosball Tables Anymore
Founders often ask whether benefits actually move the needle on retention. The answer depends on the benefits you offer.
Surface-level perks create momentary excitement. Trust is brought about by protection-led benefits.
Loyalty is enhanced when employees understand that their family’s future is financially secure. They do not proclaim it on LinkedIn, but it can be reflected in reduced turnover, increased participation, and readiness to develop with the company.
This is even more important in a constrained talent market, where SMEs compete with larger brands to attract professional talent. By providing the best term insurance plans- packaged in a simple, easily understandable manner- the playing field is evened out to a level where salary alone cannot accomplish.
Cost-Effective for Employers, High-Impact for Employees
Cost is one of the myths about some of the best term insurance plans in India. These group terms cost much less than individual policies, particularly when spread across a workforce. To the employers, this is a predictable monthly expense without the long-term pressure on the balance sheet.
More importantly, it enables founders to provide significant protection without overloading their benefits budget. In a world where every rupee is scrutinised, this is one of the rare benefits where impact far outweighs expense.
A Signal of Mature Leadership
Including term insurance in your benefits package sends a subtle but powerful message: this organisation thinks long-term. It recognises that employees are not just resources, but people with dependents, dreams, and responsibilities.
As India’s startup and SME ecosystem matures, benefits will increasingly reflect this shift- from flashy add-ons to financial resilience. Term insurance sits squarely in that future.
A healthy workforce is not only one that can access doctors, but also one that knows its family will be protected even in its absence. As more founders start building benefits with this lens, we move closer to an India where growth and security advance together, shaping a workforce that is not just productive, but truly prepared for what lies ahead.
Santosh Kumar is a Professional SEO and Blogger, With the help of this blog he is trying to share top 10 lists, facts, entertainment news from India and all around the world.
