In today’s competitive job market, attracting and retaining top talent goes beyond offering a paycheck. Employees are increasingly seeking workplaces that prioritize their well-being — and that starts with security. For businesses in Sindh, one meaningful way to deliver on this is through Group Life Insurance (GLI).
But here’s the catch: GLI isn’t just a goodwill gesture — it’s a legal requirement for many employers in the region. If you’re an HR professional or business owner in Sindh, understanding the legal landscape around GLI isn’t optional; it’s critical. Not only does it help you comply with labor laws, but it also builds trust and loyalty within your workforce
This blog takes a closer look at the Group Life Insurance Law in Sindh, how it impacts employers, and what HR leaders need to consider when building their benefits strategies.
What Is Group Life Insurance and Why Does It Matter?
Group Life Insurance is a policy that provides life coverage to a group of people under a single contract, typically employees of a company. In the case of an employee’s death, their nominated beneficiaries will receive a lump-sum payment. It is an affordable, employer-sponsored form of financial protection that fosters trust and stability within the workforce.
According to the Securities and Exchange Commission of Pakistan (SECP), the number of lives covered by group life insurance in Pakistan reached 4.9 million in 2022, reflecting an increase of 4% over the previous year. This increase was driven largely by regulatory mandates and a growing employer recognition of employee financial protection as a key value proposition.
The Legal Requirements in Sindh
The Sindh Terms of Employment (Standing Orders) Act, 2015 makes it mandatory for employers to provide group life insurance coverage to their workers. Specifically, Section 10 (b) of the Act states:
“Every industrial or commercial establishment shall have a group insurance policy with a reputable insurance company for all of its permanent workers.”
The minimum coverage under this act is set at PKR 500,000 per worker in case of death due to any cause. This requirement is applicable to all establishments employing 20 or more workers across sectors.
This makes group life insurance not just a good-to-have employee benefit, but a legal responsibility. As an HR professional, ensuring compliance with this requirement is critical—not only to avoid penalties but to fulfill your ethical duty towards employee welfare.
SECP Insights Specific to Sindh
The SECP’s comprehensive 2023 report, “Insurance as a Tool of Social Security – Landscape of Pakistan,” highlights the uptake of insurance in Sindh. In the province, over 30% of the lives covered under group life insurance policies belong to workers employed in Karachi and adjoining industrial hubs.
This reflects a higher degree of employer awareness in urban Sindh but also highlights the gap in medium and smaller enterprises across the province.
According to the report, some employers in Sindh are underinsuring or partially insuring their workers, while others may not be fully aware of their obligations under provincial legislation. The SECP emphasizes the need for awareness and stricter enforcement, noting that compliance remains inconsistent, particularly in export-based manufacturing and logistics sectors.
What HR Professionals and Business Owners Should Do
As someone leading people operations or managing business compliance, there are several proactive steps you can take:
1. Audit Existing Coverage
Start by reviewing your current employee insurance policy. Does it meet the minimum requirement of PKR 500,000? Is every eligible employee covered under the policy?
2. Partner with Reliable Insurance Providers
Choose a reputable insurer with a strong claim settlement record. Look for providers offering flexible plans that allow you to expand benefits beyond legal minimums.
3. Document and Communicate
Maintain proper documentation for all insured employees, including nomination forms and benefit summaries. Communicate clearly with your workforce about the benefits and limitations of the policy.
4. Train and Educate Managers
Ensure your line managers and supervisors are trained in basic policy awareness so they can guide their teams effectively.
5. Stay Updated with Law and Compliance Requirements
Labour laws evolve. HR professionals should stay informed about amendments to provincial regulations and align their benefits policy accordingly. Sindh’s labour department periodically updates its compliance requirements, especially for export-oriented and industrial setups.
The Business Case for Compliance
Beyond legal compliance, offering group life insurance builds goodwill and employer branding. Employees today care deeply about workplace support and long-term security. Providing GLI signals that your company values its people.
Furthermore, in case of an unforeseen tragedy, the financial aid extended to the employee’s family reflects a humane approach to workforce management. It enhances employee loyalty and reduces attrition.
In fact, according to SmartBenefits’ blog on What is Group Term Life Insurance and How Does It Work? Employees are more likely to stay in workplaces where their families’ future is considered safe.
Challenges Faced by Employers in Sindh
Many small and mid-sized businesses struggle with integrating GLI due to cost concerns or lack of awareness. Some of the common hurdles include:
- Limited understanding of policy structures.
- Difficulty finding scalable insurance packages.
- Administrative burden of managing nominations and claims.
Digital insurance platforms and third-party administrators (TPAs) are beginning to address these gaps by offering simplified onboarding, policy comparison, and claim support. HR leaders can consider these solutions to reduce friction and improve compliance.
Final Thoughts
For business owners and HR leaders in Sindh, group life insurance isn’t just another checkbox on the compliance list—it’s a commitment to employee welfare. By staying informed, choosing the right partners, and embedding GLI into your core HR strategy, you’re not just protecting your workforce; you’re strengthening your company culture.
As the landscape of employee benefits continues to evolve, group life insurance remains one of the most meaningful ways to support your team and meet your legal obligations.
Sadia Zaheer holds a Masters in Business Administration from IBA, Karachi. After working in several financial institutions in Client Management, Corporate Lending, Islamic Banking and Product Management she jumped careers to pursue a career in writing.
She is a Finance, Business and HR Development writer with four years of experience. She reads a lot and takes care of her multiple cats to remain calm.
