Life Insurance

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Group Term Life Insurance

The plan provides life cover for a group of employees, by paying a lump sum benefit to the beneficiary on the death of an employee. The plan is offered on a yearly renewable basis and is no bonus is declared in this policy.

  • Benefits to the Employer
  • Attract and retain employees
  • Provide welfare benefits to the employees and their families
  • Simple administration procedures
  • Rider benefits at nominal cost
  • Tax benefits
  • Benefits to Employees
  • Insurance protection at a relatively low cost
  • No medical test required in most cases
  • Cover is available 24 hours a day, 7 days a week,  anywhere in the world
  • Covers Natural as well as Accidental Death
  • Tax benefits

Key Man Insurance

In any company only a few individuals make the important decisions. The implementation of these decisions down the line makes or breaks the business. Thanks to their specialized knowledge, skills, vision and business acumen, these are the people who bring higher revenues, profits and loyalty. Skills of a person may not be replaceable, but the business can certainly compensate the financial loss by providing insurance to its key person – THE KEY MAN. The brand power of individuals can sometimes be bigger than that of their organizations. These are individuals who are the most indispensable human asset of an organization.

Thus, it is only natural that the sudden exit of such individuals (for whatever reasons) will not only cause financial distress but also a loss of goodwill – if not permanently, then at least temporarily – till such time that a suitable candidate of the same calibre is found, trained and acclimatized to the work culture of the organization.

Key-man insurance is a life insurance policy taken on the life of a key-man with a view to providing liquidity, financial strength and indemnity to the business organization in case of losses on account of death, absence or exit otherwise of its key-men from the business.

Group Superannuation Schemes

Old-age security is one of the key parameters of gauging the development of an Economy. With the advent of the concept of nuclear family and increasing longevity of human life the issue of old age security further demands higher attention. Life insurance Companies, however, have already taken steps on this path, introducing the superannuation schemes on group platform. GROUP superannuation schemes offered by insurance companies can be a good option for organizations to systematically plan for the increasingly crucial post-retirement days of their employees. A well-crafted plan can place a sizeable corpus in the hands of an employee Superannuation schemes, also known as pension or annuity schemes, are of two types – defined contribution and defined benefit.

Defined Contribution (DC): describes the annual contribution that the employer will deposit into the plan on behalf of each participant. (Here, only the contribution is defined, NOT the pension)

Defined Benefit (DB): defines the amount of the benefit that a participant will receive at retirement. (Normally in Govt. sector, a retiring employee knows how much pension he is going to get till he survives, irrespective of his deposits in Superannuation fund-a huge liability for the employer/Govt). Employees cannot carry DB scheme to the new employer.

Management of Gratuity Fund

As  per  “The  Payment of Gratuity Act, 1972”,  all  employers  with  employee  strength  of  10  at  the  time  of  inception  are statutorily required to pay gratuities to their employees. Gratuity  shall  be  payable  to  an  employee  on  the  following  events  of  his/her employment after he/she has rendered continuous service for not less than five years:

 (a) On Superannuation

 (b) On Retirement or resignation

 (c) On death or disablement due to disease or accident.

Three ways to manage the Gratuity Fund

  • Pay to the employees when they leave
  • Form Gratuity Fund Trust
  • Outsource the management of fund to a Life Insurance Company

 

It makes sense to outsource it to a Life Insurance Company due to the following reasons:

a)  Professional management of the fund, Better Investment avenues and hence better returns

b)  Economies of scale (larger volume gets better rates)

c)  Ease in administration

d)  Total Transparency

e)  Annual Actuarial valuation free of cost

f)  Maintaining the Books of the Accounts of the Gratuity  

g)  Filing of Gratuity returns

h)  Life  Insurance  Companies  can  also  provide  Life  Cover  as  well  as  Future Gratuity      Cover  (anticipated  Gratuity  earned  by  the  employee  till  his/her retirement) along with management of Gratuity Fund