The LIC of India has designed some group insurance
policies for the benefit of working
class. Such policies are described briefly
below.
(1) Group (Term) Insurance
Scheme: It provide life insurance
protection to group of people. It is
offered under One Year Renewable Group
term Assurance (OYRGTA) and the
scheme’s is renewed every year after taking in to a account the
changes in the size of group. The
following are the main features of this scheme.
(a) Master policy: A single
master policy is issued covering all the
members of the scheme. The scheme is administered by the Employer Associations,
Societies, etc. called Nodal agencies,
(b) Premium : Premium rates are reviewed
on the basis of claim experienced under
the individual scheme. ( C ) Eligibility : For all Non-employer employee group scheme, the basic insurability
condition is that the member should be
in good health on the date of entry. For the GI scheme of employer-
employee groups the insurability condition is that the member should not be
absent on groups of sickness on the
entry date. ( D) Restrictions: The restriction under this
scheme relate to minium and maximum age limit for eligibility of cover (18to
60), participation of minimum percentage (75%)
of eligibility members of the groups at inception and compulsory participation of all new members. (E)
Benefits: As the name term insurance indicates the amount cover is
payable in the event of death of the member. Nothing is payable on survival.
The cover amount is either uniform or
graded. Uniform cover means that every member
of the groups is insured for the
same amount. The cover is decided on the
basis of average size of the group and
occupation or activity which group is engaged in. Graded cover us usually granted to employer /
employee groups because of general level
of health care and life style of the member being satisfactory. For graded cover, group can be divided in to who three or four levels such as:
GROUP
INSURANCE SCHEME IN LIEU OF EDLI (EMPLOYEE’S
DEPOSIT LINKED INSURANCE) : All employers to whom the Employee’s . Provident
fund and Mis. provision Act 1952 applies
have a statutory liability to provide life insurance benefit to all
their employees by subscribing to Employees Deposit linked Insurance
(EDLI) 1976 i.e, Rs. 0.60 per Rs. 100
wage bill of each employee. Under
EDLI scheme, in the event of death balance in PF account of the deceased Rs. 60, 000, whichever is
lower . The Employees P.F and Mis . Provision Act also provides
that if any scheme of
insurance gives more benefits than the EDLI the employer is entitled to switch over to that scheme after obtaining the approval of the Central provident Fund Commissioner. LIC’s
GroupInsurance Scheme in lieu of
EDLI has been accepted as a better
alternative for EDLI. Under LIC’s group
insurance Scheme. each employee is covered for a sum assured of more than Rs. 60, 000 depending upon the current
salary and services put in from the very first
day, irrespective of the actual
balance in the provident Fun.
ELIGIBILITY: For LIC’ Group insurance Scheme in lieu of EDLI the insurability condition is that he should be a member of the Provident Fund’s Scheme of the employer. ACCIDENT BENEFIT: Double accident benefit can be allowed to the extent
of the sum assured for an extra premium
@ Rs. 0.75 per thousand. Benefits to Employer: (a) Premium under LIC’s Group
insurance scheme is usually less than the total contribution to provident
fund authorities. (b) Settlement of
claim is quicker ( C ) Premium paid is
treated as business expense for income
tax purpose.
GROUP SAVINGS LINKED
INSURANCE (GSLI) scheme: The GSLI scheme offers insurance cover together with a
saving element. The GSLI scheme this scheme , is deducted from the monthly
salary of the member. The scheme is applied in Govt. Bodiespublic sector corporations and reputed private companies who keep accurate records of their employees. A portion of the contribution of the employees is
utilised as premium to cover term assurances for a fixed sum and the balance is treated as
savings which are accumulated at an
attractive rate. At present, the rate is
10% p.a, Member exit the scheme on
retirement or earlier by death or resignation. BENEFITS: (a) On death while in
service: Amount of insurance cover and accumulated savings up to
the date of death. (b)
On retirement /
resignation: Accumulated savings up to
the date of exit. TAX BENEFIT: (a)
Contribution Full are treated as insurance premium and enjoy the
benefits under section 80C. (b) Savings
accumulations received are tax free.