Gratuity Insurance
Gratuity is a statutory benefit paid to the employees under the Payment of Gratuity Act, 1972 who have rendered continuous service for at least five years. The employee is eligible for 15 days of salary (basic pay plus DA) for each completed year of service. The employer can also structure a gratuity benefit that is higher than statutory requirements. The gratuity benefit is payable on cessation of employment (either by resignation, death, retirement or termination, etc.) by taking the last drawn salary as the basis for the calculation.
Gratuity payment liability tends to increase as the salaries and tenure of employment increase annually. An employer may pay out gratuity proceeds from his current revenue; however, to ascertain the gratuity liability of the employer and for more prudent financial planning, it is beneficial to set up a gratuity fund.
AEGON Religare Group Gratuity Plan
AEGON Religare Life Insurance offers a unit-linked group gratuity plan that helps to fund the statutory gratuity obligation in a scientific manner and also avail of the tax benefits as applicable to approved gratuity funds.
What is the gratuity benefit?
The accrued gratuity benefit is payable on cessation of employment (either by resignation, retirement or termination) as advised by the policyholder subject to the availability of sufficient funds in the policyholder’s account.
Features
Life Insurance Cover - AEGON Religare Group Gratuity Plan provides greater value to your employees by packaging gratuity with life cover.
Death Benefit
- The accrued gratuity benefit is payable on cessation of employment due to death as advised by the policyholder subject to the availability of sufficient funds in the policyholder’s account plus the sum assured applicable for individual member.
The liability of the insurer for a scheme will be limited to the fund value plus the sum assured of individual member.
Under any circumstances, if the account balance is not sufficient to pay the stated benefits as per Trust Deed and Rules, the shortfall will be borne entirely by the policyholder. For all death claims the life cover along with the accrued gratuity will be payable to the policyholder.
How would gratuity contributions be made?
The gratuity contribution payable under this policy every year could be based on the actuarial valuation of the employer’s group gratuity scheme. The gratuity contribution is not level and may vary from year to year. Each gratuity contribution received from the policyholder will be allotted in a proportion as selected by the policyholder among the investment funds chosen by the policyholder.
How would be life insurance premium paid?
Life insurance premium is payable in addition to the gratuity contribution payable towards funding of gratuity benefit. The life insurance premium is collected separately from the gratuity contribution.
The life insurance premium for the group at inception / renewal of the policy will be calculated based on age specific rates and guaranteed for only one year.
The life insurance premium rate applicable to the new joinees during the policy year will be a unit rate. This unit rate will be calculated as total life insurance premium divided by total sum assured *1000, at the inception/renewal of the policy. This unit rate will remain constant throughout that policy year.
Applicable service tax will be levied on the life insurance premium.
Benefits
Free annual actuarial valuation
Multiple Investment Options – Choice of multiple funds with a flexible investment pattern.
Switching Option - While you have chosen a fund option, you have the flexibility of switching between our various funds at any time. Switching between the various funds is allowed depending upon your requirements. We allow unlimited switches free of cost every year.
Gratuity Contribution Redirection – The gratuity contributions can be redirected for investments into fund/s of your choice and need not adhere to the initial investment pattern. We allow unlimited redirection requests free of cost.
Transparency - Portfolio Disclosure of the funds is done on a Quarterly basis. This enables you to achieve better fund management.
NAV* declaration- NAV is declared daily, enabling you to track the performance of the fund chosen by you.
*NAV = (Market / Fair value of scheme’s investments+ Current Assets – Current Liabilities & Provisions) / No. Of units Outstanding under the relevant plan
Unit Pricing- The contribution received in respect of the client is converted into number of units based on the Net Asset Value (NAV) per unit at that point of time.
Addition of new member?
All new joinees become a part of the group, if they meet the eligibility criteria (as specified in the scheme rule provide by the policyholder). The life cover starts from the date of joining the company or as specified in scheme rules provided by Policyholder.
The particulars of the new joiners may be submitted by the policyholder on a monthly basis. The premium for life insurance cover is payable annually in advance (on a pro-rata basis).
Free Look Period
If policyholder is not satisfied with the terms and conditions of the policy, policyholder may choose to cancel the policy within 15 days of receiving the policy documents along with stating the reason for such cancellation. Upon such cancellation, the policyholder will be paid back the following amount:
(Fund value + proportionate life insurance premium for unexpired period) – (stamp duty + cost of medical, if any)
For details
Read the
product brochure
Call
1800 209 9090
sms
“INSURANCE” to 56677
