Group-term life insurance policies are offered to the following sections of people:

• Employer-employee groups
• Non-employer-employee groups
• Banks
• Professional groups
• Non-banking financial institutions
• Microfinance institutions
  

The following is the nature of a group life insurance plan:

• It is awarded to all members of a certain group contingent on certain basic conditions of insurability
• Medical reports need not be produced
• Maturity value is not provided
• Scheme covers death
  

Premium: Premium on group term insurance can be paid entirely by the employer.

• Members under the scheme are also allowed to make contributions towards the premium of the scheme.

Double Accident benefits:- For an extra premium, a double accident benefit is provided to the insured in the event of an accident.

• This comes excluding the permanent disability benefit.

Following is the flowchart group life insurance plan-

• A group administrator is issued a master policy upon which he pays an initial premium.
• This initial payment covers all the members of the group for a tenure of one year.
• An option to choose the sum assured is provided to the members of the group.
• This sum can either be a lump sum amount or could be linked to a salary account or a loan account, etc.
• Once the policyholder has paid the premium, the members are covered for a tenure of one year from the date of commencement of the policy.
• The group life insurance plans are annually renewable.
• The premium is charged based on the alterations in the size and age allocation of the concerned age group.
  

The following are the benefits of a group term insurance plan to employees-

• Employees are assured of financial assistance being extended to their families in the unfortunate event of their demise, critical illness, etc.
• Employees can benefit from the inconvenience of medical tests be done away with until their free cover limits.
• The premiums paid by their employers are not treated as perquisites.
• Employees can enjoy death benefits that are exempt from tax under Section 10(10D)
• Easy administration by way of simple documentation
• Can be customised to meet niche needs of the employees enrolled
• Offers security to the family of the insured
• Safeguards the insured's financial interest

• Group Life Claim Process: In case of the untimely demise of the employee, the nominee or beneficiary can file a claim to get the sum assured through the following steps: Inform the insurance company within 24 hours or as early as possible Submit the necessary documents like original death certificate, insurance copy, medical documents supporting the reason of death, etc. to the insurance company Once these documents are submitted, the insurance company would assess the details and accordingly settle the claim, if approved.
• Time Taken to Settle Claims: On receiving the required documents for making claims, the Insured will connect with insurance Company that will evaluate the documents. Once they are satisfied with the claim, they will transfer the amount to the beneficiary through the organisation within 7-10 days from the date of receipt of the documents.
• Renewal Process: Group life insurance plans can be renewed after a year of the commencement of the policy. The corporation gets 3 months to revive the policy from the date of the first unpaid premium. If the policyholder wants to add or remove any member from the policy, the company can do it at the time of renewal.
  

• Any treatment within the first 30 days of cover except for any accidental injury.
• Any Pre-existing diseases/conditions diseases like cataracts, hernia, hysterectomies, joint replacement, etc. will be covered as per the specified period of the policy.
• Expenses arising from HIV or AIDS and related diseases.
• Abuse of intoxicant or hallucinogenic substances like drugs and alcohol Hospitalisation due to war or an act of war or due to nuclear, chemical, or biological weapons and radiation of any kind.
• Non-allopathic treatment, congenital external diseases, mental disorders, cosmetic surgery, or weight control treatments.
  

Employees’ Gratuity trust needs to be set up as per provisions of Income Tax Act – we provide necessary assistance and guidance in this process.

• Insurer maintains the fund under the name of the trust.
• Investment of funds is taken care by Insurer and interest is declared as per the performance of the total fund and credited ti the individual trust fund.
• At the time of exit of an employee, trustees send discharge and advise insurer to make payment of Gratuity as per scheme to the trust.
• The insurance scheme of insurer provides future service gratuity in case of unfortunate death of the member at a very reasonable cost.
• Unit linked & Endowment linked returns and long-term investment growth.
• Regular Additions for higher fund sizes.
• Choice of Funds
• Fund management under interest accumulation system
• Claim settlement on exit as per company rules/gratuity act
• Built in Insurance arrangement for the employees for future service
• MIS related to Income Tax and trusts accounts and Actuarial valuation.
• Life insurance coverage for employees advantages

• Employer-Employee groups
• Minimum Group size: 10 employees
• Plan options: Unit linked & Endowment
• Entry age Min: 18 years (Last birthday)
• Entry age Max: As per scheme rules, subject to maximum of 79 years (Last birthday)
• Maximum Maturity age (Last birthday) As per scheme rules, subject to maximum of 80 years
• Policy Term : 1 year (Yearly renewable)
• Sum Assured : Min: 1,000
• Sum Assured : Max: As defined in the scheme rule
• Gratuity Contribution Min: 2,00,000 at inception
• Gratuity Contribution Max: No limit
• Premium paying term: Yearly/ Half yearly/ Quarterly/ Monthly
• Scheme administration: Monthly addition and deletion of members

Employer:

The premium is not treated as perks in the hands of the employees Under section 10(10) of the Income Tax Act.

1. For Government employees: Gratuity received is tax free
2. Employees not covered under Gratuity Act: Tax free upto lower of Rs.20 Lakhs Half months average Salary * No. of completed year of services
3. For Employees covered under Gratuity Act: Tax free upto lower of Rs.20 Lakhs

15/26 * last drawn salary * no. of years of completed service or part thereof in excess of 6 months

Here are the essential elements of EDLI, applied uniformly to all beneficiaries under the policy:

• EDLI applies to all employees with a basic salary under Rs. 15,000/- per month. If the basic salary goes above Rs. 15,000 per month, the maximum benefit is capped at Rs. 6,00,000/-. With effect from 28.04.2021, the EPFO has increased the maximum benefit to Rs.7 lakh.
• There is no need for the employees to contribute to EDLI. Their contribution is required only for EPF.
• A bonus of Rs. 1,50,000/- is available under the EDLI. With effect from 28.04.2021, the bonus is increased to Rs.2.5 lakh.
• The Ministry had increased the minimum amount of benefit to Rs.2.5 lakh in Feb 2018, which was valid for two years. The EPFO has extended this minimum amount of Rs.2.5 lakh with retrospective effect from 15th Feb 2020.
• Any organisation that has more than 20 employees needs to register for EPF. Therefore, any employee who has an EPF account automatically becomes eligible for the EDLI scheme.
• There are no exceptions to the insurance coverage provided by EDLI. It protects the insured person round the clock, all around the world.
• An employer can opt for another group insurance scheme, but the benefits offered must be equal to or more than those offered under EDLI.
• As per the provisions of the EDLI, the contribution of an employer must be 0.5% of the basic salary or a maximum of Rs. 75 per employee per month. If there is no other group insurance scheme, the maximum contribution is capped at Rs. 15,000/- per month.
• For all calculations under EDLI, the dearness allowance must be added to the basic salary. 

The registered nominee will receive a lump-sum payout in the event of the death of the insured person. If no nominee or beneficiary is registered, then the amount would be paid to the legal heir. With effect from 28.04.2021, the pay-out to be awarded will be calculated as under:

{Average Monthly Salary of the Employee for the last 12 months (capped at Rs.15,000/- p.m.) x 30 } + Bonus Amount (Rs.2,50,000/-) 

To process the claim under EDLI, the following documents are to be submitted by the claimant: –

• Duly completed Form 5 IF.
• Death Certificate of the insured person.
• Succession Certificate in case the legal heir files the claim.
• Guardianship Certificate if the claim is filed on behalf of a minor by a person other than the natural guardian.
• Copy of cancelled cheque for the account in which the payment is to be received.

The process to be followed by the nominee or claimant to receive the amount under EDLI is as follows:

The benefits can be claimed by the nominee specified by the insured person. If no nominee was registered, then the family members or legal heirs can apply for the same. The deceased person should have been an active contributor to the EPF scheme at the time of his/her death. EDLI Form 5 IF has to be duly completed and submitted by the claimant. The claim form has to be signed and certified by the employer. If there is no employer or the signature of the employer cannot be obtained, the form must be attested by any of the following: 

• Bank manager (in whose branch the account was maintained)
• Local MP or MLA
• Gazetted Officer
• Magistrate
• Member/Chairman/Secretary of Local Municipal Board
• Post Master or Sub-Postmaster
• Member of the regional committee of EPF or CBT. 

The claimant must submit all the documents along with the completed form to the regional EPF Commissioner’s Office for processing of the claim. The claimant can also submit Form 20 (for EPF withdrawal claim) as well as Form 10C/D to claim all the benefits under the three schemes, EPF, EPS, and EDLI).

Any additional documents required must be furnished at the earliest to process the claim.

Once all the documents are provided and the claim is accepted, the EPF commissioner must settle the claim within 30 days from the receipt of the claim. Otherwise, the claimant is entitled to interest @12% p.a. Till the date of actual disbursal.

Contribution by the Employee and Employer to the EPS, EPF, and EDLI

The employer makes the contribution to these schemes on behalf of the employees. The employee contribution is deducted from the salary before they credit the salary. Employees themselves need not make any direct payment to these schemes.

The contribution of employees is calculated as: –

• For EPF – 12%
• For EPS – None
• For EDLI – None

The contribution of employees is calculated as: – 

• For EPF – 12% For EPS – None
• For EDLI – None The contribution of Employer is calculated as: –
• For EPF – 3.67% For EPS –8.33% or Rs. 1,250/- For EDLI – 0.50 or max Rs. 75/-

The chief motive of the EDLI scheme is to offer financial security to the family members of the policyholder (deceased person). Family members mean spouses, unmarried daughters, or male children up to 25 years of age. The employee cannot choose which of the three schemes, EPF, EPS, or EDLI, he/she wants to opt for, but they are transferable with any change in the job. The new employer will continue to make payments in the existing account only.