Untitled Document
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Group
Insurance
Introduction
The scheme is designed so that a pre-determined amount is given
to every employee in an organization, on the death of the employee
while in service. GI scheme has valuable advantage to employee benefit
and is bound to improve employee morale and productivity. |
Salient Features
- One Master policy is issued to the Employer
and premium is payable in advance by the employer and is renewable
every year.
- Contribution of the employer towards premium
can be as much as 27% of annual salary (basic + DA) of any employee,
and the same is allowed as deductible expense in the firms'
IT Assessment. Considering IT relief, cost of insurance is nominal
to employer.
- Employees can also contribute to this scheme
and the scheme is known as contributory pension fund scheme.
- Employee's beneficiaries not to pay tax on amount
received on claim settlement.
- Categorization of employees is done based
on designation and the coverage is as follows:
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Category |
Maximum Sum Assured |
Senior Management |
Rs. 3,00,000 |
Middle Management |
Rs. 2,50,000 |
Clerical Staff |
Rs. 1,50,000 |
Sub-staff and Workers |
Rs. 80,000 |
Requirements
- Minimum number of employees required to be
covered is 50.
- Employees need not undergo medical exam.
Only stipulation is the employee should not be absent on the
entry date on ground of sickness.
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Premium
Premium works out to Rs. 4 to 5 per Rs. 1000 sum assured per annum.
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Procedure to introduce the scheme in
an organisation
- Appoint trustees, draft trust deed in consultation
with LIC and execute Trust Deed to establish an irrevocable
trust.
- Get the resolution passed by the company board.
- Make an application to IT for approval as per
Part B of 4th schedule.
- Send master proposal form to LIC only signed
by Trustees, employees Data and Cheque towards contribution.
- Employer is also required to furnish a list
with the following details to LIC:
Name
Date of Birth
Designation
Amount of Insurance
Also, a list of new entrants and exiting force from time to
time is to be furnished.
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