Overview
FCL stands for Free Cover Limit in a Group Term Life (GTL) policy. It represents the sum assured amount up to which no medical underwriting is required for an employee to be covered.
📌 How FCL Works
- Sum‑Assured Threshold
- Employers set an FCL sum limit (e.g., ₹2 Cr). Employees requesting coverage within that limit receive coverage without medical tests .
- Requests above the FCL require medical checks. If the employee declines testing, their coverage is capped at FCL .
- Age‑Based Limits
- Policies may define an FCL age limit (e.g., 65 years). Employees older than this need medical tests to be covered. Without testing, they may be excluded .
✅ Why FCL Matters for GTL Plans
- Enables instant and hassle-free coverage for most employees.
- Minimizes medical underwriting overheads and facilitates faster enrollment and claims.
- Employers should consider setting high FCL limits to minimize testing and improve satisfaction .
FCL stands for Free Cover Limit in the GTL policy. It’s the limit up to which the insurer doesn’t require medical tests for a grant of coverage in the policy. The significance of FCL in a GTL policy lies in its role as the maximum amount of coverage that can be provided to an individual without requiring a medical examination.
Free cover limit FCL, is determined by two parameters in the GTL policy – sum insured and the employee’s age.
The sum insured limit specifies that employees must undergo a medical test to receive a life cover limit exceeding the FCL sum insured limit. For example, if the FCL sum insured limit in a policy is INR 2 Cr, and a senior employee requests INR 3 Cr. He/she has to undergo a medical test for availing INR 3 Cr. sum insured. In the condition that the employee does not undergo a medical test, he/she covers up to the FCL limit. The limit is INR 2 Cr. We suggest taking the FCL sum insured limit as high as possible to minimize the number of employees undergoing medical tests.
Additional Read: What is the Active at Work clause under GTL policy?
The age limit states that any employee who is over the FCL age limit needs to undergo a medical test. For a grant of life cover limit. For instance, if a policy has an FCL age limit of 65 years and a senior employee is 67 years old. They must undergo a medical test to get life cover. In case he/she does not undergo a medical test. If his/her age exceeds the FCL age limit, he/she will not be covered in this case. We suggest that you should take the FCL age limit as high as possible. So that senior employees do not have to undergo medical tests.
FAQs
- What is FCL in a Group Term Life policy?
It is the maximum sum assured an employee can receive without needing a medical exam under GTL. - How is FCL determined?
It is based on the policy’s sum-insured cap and the employee’s age. Both thresholds must be within FCL for exemption from medical tests. - What happens if the coverage request exceeds FCL?
The employee is required to undergo medical underwriting. Without it, coverage is limited to FCL. - Why should employers set higher FCL limits?
Higher FCLs reduce the need for tests, streamline admin, and help employees feel valued and covered without barriers. - Is FCL universal across insurers?
Yes, while insurers may vary in thresholds, the concept—no-medical coverage up to a limit—is standard in GTL policies.
About The Author
Varun
MBA Finance
Varun has established itself as a knowledgeable and reliable expert in the field with 8 years of experience. Specializing in group-term life insurance, they have dedicated their career to helping businesses and individuals navigate the complexities of insurance products and services. Currently writing for SecureNow, he produces insightful blogs and articles that demystify group-term life insurance, offering practical advice, industry updates, and strategic insights. Their deep understanding of the insurance landscape and talent for clear and engaging communication make their content invaluable for both seasoned professionals and newcomers alike.
