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Group Insurance Schemes
Insurance which is issued to a group, such as an employer, credit union, or trade association, and which provides coverage for individuals and sometimes their dependents.
Group Insurance Scheme is life insurance protection to groups of people. This scheme is ideal for employers, associations, societies etc. and allows you to enjoy group benefits at really low costs.
2. Schemes offered by LIC Group Insurance Schemes
GROUP LIC'S SUPERANNUATION PLUS
LIC’s SUPERANNUATION PLUS PLAN, is a unit linked defined contribution plan for management of Superannuation Funds. This plan is different from the traditional Cash Accumulation Plan as the returns under the Plan are linked to the performance of the chosen fund. SUPERANNUATION PLUS PLAN is suitable for companies with employees desiring to have flexibility of choice of investment.
Advantages of the LIC’s GROUP SUPERANNUATION PLUS PLAN:
1. Choice of 4 funds to meet various risk appetites. 2. Flexibility of building the fund subject to acceptable level of risk. 3. Facility of Switching between various funds. Four switches every year are free of cost. 4. There is no bid offer spread under this scheme.
Group Insurance Schemes
5. Scheme can be surrendered at any time after the date of payment of first contribution. The benefit on surrender will be subject to appropriate charges. 6. Maintenance of individual member-wise account and hassle Free Administration of Scheme. 7. Assistance for execution of legal documents and installation of scheme
1. The Master Policyholder has the choice to invest the contributions in respect of individual member in any one of the following four funds: Fund Type Investment in Government / Government Guaranteed debt Bond Fund Not less than 70% Income Fund Balanced Fund Not less than 50% Not less than 60% Not more than 30% Not more than 30% Not more than 30% Not less than 10% & Not Not less than 20% & Not more than 50% Growth Fund Not less than 40% Not more than 30% Not less than 30% & Not more than 60% Steady Income— Lower to Medium Balance Income and growth— Medium risk Long term Capital growth— High risk Nil Low risk Short-term Investment market Investment in Details and Listed Equity objectives of the fund for risk/return
such as money Share
more than 40% risk
Group Insurance Schemes
Note: The various funds offered are the names of the funds and do not in any way indicate the quality of these plans, their future prospects and returns. 1. The allocation charge shall be 0.5% in the first year and nil in the subsequent years.
2. Other charges: Administrative charges, Fund management charges, switching charges,
surrender charges and service tax. 3. The Policyholder has the choice of investing the Member wise allocated contributions in any one of the four fund types. Individual member-wise fund will be maintained. Any top up of the contributions in respect of the members can be made at any time during the membership period. 4. The Net Asset Value (NAV) of each fund will be computed daily.
1. Flexibility of Contributions: Policyholder may choose to pay contributions at any time
during the policy year.
2. Top-Up (Additional Contribution): The policyholder can pay top-up of the contribution
in respect of members at any time during the membership period.
• Benefits Under The Scheme
1. The amount available in respect of the member shall be the value of units in the
member’s fund. A portion of the amount can be commuted if the scheme rules allow. The balance amount will be utilized to purchase immediate annuity, in respect of the member/beneficiary certified by Policyholder, at the then prevailing annuity rates. Both the commuted value and the annuity in respect of the member/beneficiary will be paid to policyholder. However the same can also be paid to the beneficiary directly with the consent of the policyholder. On exit of a member the amount available shall be the value of units. The value of units in respect of the member shall be the number of units held under the chosen fund type multiplied by the corresponding NAV.
Group Insurance Schemes
2. The policy can be surrendered at any time after the date of payment of first contribution. The benefit available on surrender of the policy shall be the total of value of units in respect of all Members taken together less appropriate surrender charge. At all times the Policyholder’s unit account should be sufficient to cover the relevant charges and benefits payable at such point of time, subject to a minimum balance of Rs. Five lacs in the Policyholder’s Unit Account. In case the Policyholder’s Unit Account falls below this limit, the policy shall compulsorily be terminated and the balance amount in the policy holder’s Unit Account will be refunded to the policy holder.
The provisions relating to the approved Superannuation Scheme are set out in Part 'B' of the Fourth Scheme of the Income-Tax Act, 1961 and Part XIII of the Income Tax Rules, 1962. The income tax concession will be available only if the scheme is approved by the CIT.
1. The annual contribution is treated as a deductible business expense in term of Section 36(1) (iv) of the I.T. Act. 2. In terms of a Notification issued by the Central Board of Direct Taxes .80% of the contribution (s) towards the past service liability are treated as deductible business expenses spread over in the subsequent years of payment.
3. The employee's contribution, in the case of the Contributions scheme qualifies for
exemption under Section 80C of the Income-Tax Act.
• Risks Borne By The Individual Member
The Value of the units is subject to market and other risks and there can be no assurance that the objectives of any of the above funds will be achieved. The value of units within each Fund can go up or down depending on the different factors affecting the capital markets and may also be affected by changes in the general level of interest rates and other economic factors. All benefits
cover for all amounts of outstanding housing loans or vehicle advances. or some other benefits (e. Under Group (Term) Insurance Scheme. Disability benefit etc. C) Different Schemes: Group (term) Insurance Scheme has a number of varieties.. The schemes may have add-ons like Double Accident Benefit. Every year on Annual Renewal date LIC charges the premium depending upon the changes in size and age distribution of the age group. Administration of the scheme is on group basis and cost is low. life insurance cover is allowed to all the members of a group subject to some simple insurability conditions without insisting upon any medical evidence.Group Insurance Schemes under the policy are also subject to the Tax Laws and other Financial enactments as they exist from time to time. D) General Features of various Group Insurance Schemes: 5 . B) Premium Chargeable: Group (Term) Insurance Scheme is at present offered under One Year Renewable Group term assurance plan (OYRGTA).g. life cover to supplement pension or PF benefits in case of death). Scheme offers covers only on death and there is no maturity value at the end of the term. Critical Illness Benefit. Group (Term) Insurance Scheme A) Nature of the Scheme Group (term) Insurance Scheme is meant to provide life insurance protection to groups of people. The Scheme may provide for a uniform cover to all members of the group or graded covers for different categories of members.
ELIGIBILITY: For Group Insurance Scheme in lieu of EDLIS the insurability condition is that should be a member of the Provident Fund Scheme of the employer. 3. When a claim arises. For all non-employer-employee Group Schemes the basic insurability condition is that the member should be in good health on the date of entry. PREMIUM: The premium under such scheme may be wholly paid by the employer or the Nodal Agency. payment of double the sum assured on death due to accident (without permanent disability benefit).Group Insurance Schemes 1.e. ADMINISTRATION OF THE SCHEME: At the commencement and thereafter on each Annual Renewal Date. For other GI Schemes of employer-employee groups the insurability condition is that the member should not be absent on ground of sickness on the entry date.e. may be allowed under Group Insurance Schemes for an extra premium. However. the scheme may be contributory i. the members may also contribute. the Group Policyholder will have to send all the member's data (and particulars of the new entrants from time to time) to the P & GS unit of LIC. 4. the particulars of the respective member are to be intimated together with the claim form and death certificate. i. 2. Detailed OYRGTA premium calculation will be made on each Annual Renewal Date. DOUBLE ACCIDENT BENEFIT: Double Accident Benefit. Group Insurance Scheme in Lieu Of EDLI • What is EDLI? All employees to whom the Employee's Provident Fund and Miscellaneous Provision Act 6 .
have a Statutory liability to subscribe to Employee's Deposit Linked Insurance Scheme. provided that where such balance exceeds Rs. particularly when the salary level is high and average age of the group is low.C. under Sec. if he/she has provided for better insurance benefits through alternative scheme. • Advantages To The Employer : 1. 000 subject to a maximum of Rs. 7 . insurance cover would be equal to Rs. • The Better Alternative However. The premium payable by the employer is usually less than the total contribution being paid by the employer to R. LIC requires only the death certificate and the Claim Form from the employer. Under the scheme as amended with effect from 24th June.35. The contribution @ 0. 1976 to provide for the benefit of Life insurance to all their employees.60.50% of each employee's salary is payable by the Employer to the Provident Fund Authorities. 17(2A) of the act.35. Settlement of claim is quicker.35. 3. LIC's Group Insurance Scheme in lieu of EDLI has been accepted as one such better alternative. 000 plus 25% of the amount in excess of Rs. 000. 1952 applies. Premium paid by the employer is treated as normal business expenses for Income-Tax purpose.Group Insurance Schemes . 2. 2000 the insurance benefit is equal to the average balance to the credit of the deceased employee in the Provident Fund during the last 12 months. the employer may be exempted from contributing to this scheme. 000.F. Thus if the length of service is not adequate and/ or the salary is low the average balance may be substantially less and such the benefit to the employee's family is either inadequate or non-existent.P.
2.F.C.Group Insurance Schemes • Advantages To The Employee: Each employee is covered for a sum assured ranging between 5.000 to 2. a unit linked plan for management of Gratuity Funds. Apply to the Regional Provident Fund Commissioner under Sec. • Accident Benefit: Double accident benefit can be allowed to the extent of the Sum Assured for an extra Premium. • Steps To Introduce The Scheme 1.P. Alternatively every employee/ worker can be covered for a uniform sum assured which will be decided depending upon the group size. GROUP GRATUITY SCHEME LIC brings you LIC’s GRATUITY PLUS PLAN. Put up notice for the knowledge of the employees that you are going in for LIC's Scheme in lieu of EDLI.000 depending upon the current salary and service put in from day one irrespective of the actual balance in the Provident Fund.P. 8 . to grant exemption from the 1st of the month in which the application for relaxation is submitted. 00. LIC also offers necessary guidance to the employers for seeking relaxation.P. GRATUITY PLUS PLAN is suitable for companies who desire to entrust Gratuity Fund management to an insurer and wish to have the flexibility of choice of investments. This plan is different from the traditional Cash Accumulation Plan as the returns under the Plan are linked to the performance of the chosen fund. The application should be accompanied by the prescribed requirements including the Rules of the Proposed Group Insurance scheme. Act 1952 to exempt you from EDLI Scheme. Central PF Commissioner has authorized the R.F. and M.17 (2A) of the E.
Flexibility in structuring the Gratuity Costs based on performance of Fund. • Features 1. Assistance for execution of legal documents and installation of scheme. There is no surrender penalty imposed. 7.Group Insurance Schemes • Advantages Of The LIC’S GROUP GRATUITY PLUS PLAN 1. Scheme can be surrendered at any time. 3. Hassle Free Administration of Scheme 8. 2. One switch every year is free of cost. 6. the company can also choose for each member a uniform level of cover equal to a minimum of one months salary or more. Facility of Switching between various funds. 5. It provides for life insurance cover at a very minimal cost. There is no bid offer spread under this scheme. The Master Policyholder has the choice to invest the contributions in respect of individual member in any one of the following four funds: Fund Type Corporate Investment in Government / Government Guaranteed Short-term Investment market Instruments 9 Investment in Risk Profile Listed Equity such as money Share . 4. Choice of 4 funds to meet various risk appetites. Cover can be equal to the gratuity payable for anticipated service. Alternatively.
Group Insurance Schemes Securities/Corporate debt ( Rated AA and above ) Bond Fund Not less than 80% Income Fund Balanced Fund Not less than 60% Not less than 70% 100 % Not more than 90% Not more than 80% Nil 20% 30% Low risk risk Not more than Low to Medium Not more than Medium risk Growth Fund Not less than 50% Not more than 70% Not more than Medium to High 40% risk Note: The various funds offered are the names of the funds and do not in any way indicate the quality of these plans.1. 2.50 97% Crores Above Rs.) 1st Year Allocation Rate 2nd Year 98% 99% 99% 3rd Year 99% 99% 99% 4th Year onwards Less than or equal to Rs.50 Crores to Rs.10 crores and more 98. their future prospects and returns.5% 100% 100% 100% 10 .1. 98% 10 Crores Above Rs. The allocation charge shall be as follows : Size of the Contribution (Rs.
Five lacs in the 11 . The benefit available on surrender of the policy will be the value of total number of units held in the Policyholder’s Unit Account at the time of surrender. At all times the Policyholder’s unit account should be sufficient to cover the relevant charges and benefits payable at such point of time. subject to a minimum balance of Rs. The policy can be surrendered at any time. 2. At the end of five years from the policy anniversary for which the contributions have not been received from the policyholder if the policy is still in paid up condition the policy shall be compulsorily terminated. switching charges. In case of death of member. surrender charges and service tax. • Benefits Under The Scheme 1. Other charges: Mortality charges. Gratuity Benefits to Members whenever payable as per Rules of the Scheme shall be paid to the Policyholder by debiting the requisite no of units to the Policyholder’s Unit Account at NAV applicable at that time. 2. Administrative charges.Group Insurance Schemes 3. Contributions: Contributions are payable on every policy anniversary. 3. However the term Assurance Cover will be provided to the members by way of Auto Cover for a period of five years from the policy anniversary for which the contributions have not been received from the policyholder. The Term Assurance cover equal to Future Service Gratuity or number of month’s salary subject to a minimum of one month salary of members as opted by the policyholder will be provided as Auto Cover for which the mortality charges together with service tax if any will be deducted by cancelling appropriate number of units from the Unit Account. Auto Cover: If the contributions are not received on the policy anniversary the policy becomes paid up. 4. Fund management charges. The Net Asset Value (NAV) of each fund will be computed daily. life insurance cover as opted for by Policyholder will also be paid by the Corporation. • Special Features 1.
The annual contribution is treated as a deductible business expense in term of Section 36(1) (iv) of the I. The employee's contribution. In terms of a Notification issued by the Central Board of Direct Taxes . 2.T. 1. • Risks Borne By The Individual Member The Value of the units is subject to market and other risks and there can be no assurance that the objectives of any of the above funds will be achieved.80% of the contribution (s) towards the past service liability are treated as deductible business expenses spread over in the subsequent years of payment. Act.Group Insurance Schemes Policyholder’s Unit Account. 1961 and Part XIII of the Income Tax Rules. in the case of the Contributions scheme qualifies for exemption under Section 80C of the Income-Tax Act. GROUP SUPERANNUATION SCHEME An organization today. the policy shall compulsorily be terminated and the balance amount in the policy holder’s Unit Account will be refunded to the policy holder. • Tax Benefits: The provisions relating to the approved Superannuation Scheme are set out in Part 'B' of the Fourth Scheme of the Income-Tax Act. In case the Policyholder’s Unit Account falls below this limit. The income tax concession will be available only if the scheme is approved by the CIT. 1962. All benefits under the policy are also subject to the Tax Laws and other Financial enactments as they exist from time to time. The value of units within each Fund can go up or down depending on the different factors affecting the capital markets and may also be affected by changes in the general level of interest rates and other economic factors. 3. has not only to man the various positions with competent and trained personnel but also has to create an environment wherein they can give their best and derive a 12 .
The problem of liquidity gets automatically eliminated as soon as the fund is managed by LIC. 2.Group Insurance Schemes sense of well-being. 4. as with continuous improvement in longevity a regular income even after retirement has become a necessity. at very nominal cost. Provision of pension may be an attraction for such persons to continue in the organization and give their best to the organization. Create a privately managed trust fund and as and when a member retires. We conduct free actuarial valuations of the funds administered by us from time to time. Entrust the Management of the Pension Fund to an Insurer by purchasing its Group Superannuation Scheme. 2. Such Contributions are accumulated by LIC and the accumulated amount is utilized to provide 13 . a sense of fulfillment and security and take pride in their continued association with the organization. • Advantages Of The LIC Managed Pension Fund: The LIC managed Pension fund has the following added and distinct advantages:- 1. 1. 3. Group Insurance in conjunction with the Group Superannuation Scheme can be taken by an Organization to provide for an attractive lump sum payment on the unfortunate death of a member while in service. purchase annuity from LIC to provide pension for such retiring member. • Superannuation Scheme Provided by LIC The employer contributes a certain fixed percentage of salary of each member. an employer has two alternatives under the provisions of Rule 89 of Income Tax Rules 1962. The Administration of the fund is carried out by us in a scientific manner and claims are promptly settled. 5. An attractive and competitive yield on the fund will be credited to Fund A/c. To provide the pension benefits to employees.
3. the corpus (contributions plus interest) is utilized to provide the pension as per his choice. A lump sum payable by way of death besides the pension. Joint Life Pension payable to the last survivor of the employee and spouse with return of capital on the death of the last survivor. 1/3rd of the pension can be commuted at vesting. 4. 15 or 20 years and life thereafter. 2. • Benefits: 1.Group Insurance Schemes various benefits as mentioned below. ON RETIREMENT On Retirement of a member. If desired. • Pension Options Provided By LIC: 1. 14 . 3. Joint Life Pension payable on the last survivor of the employee and spouse. Corpus is utilized towards the payment of pension of the type the beneficiary may opt and the benefit so received is tax free. 10. 5. if the employer has taken Group Insurance Scheme in conjunction with the Group Superannuation Scheme. Life Pension ceasing at death. ON DEATH The Pension is payable on the life of the beneficiary. 2. Life Pension guaranteed for 5. ON WITHDRAWAL He can get the equitable interest transferred to the Superannuation Scheme of the new employer or opt for immediate or deferred pension. Life Pension with Return of Capital and Group Pension Terminal Bonus on death.
• Contribution: The maximum annual contribution that an employer can make to the Pension Fund and Provident Fund is restricted by the Income Tax Provisions to 27% of the annual salary (basic plus D. The income tax concession will be available only if the scheme is approved by the CIT. employer cannot discriminate between the employees and thus extends the scheme uniformly). but is so desired. The eligibility conditions may be defined on the basis of designation or salary. 1. 1962. 15 . (However. after the categories are specified. 1961 and Part XIII of the Income Tax Rules.) The annual contributions are treated as deductible business expenses. Act. in which case the scheme is called a Contributory Pension Fund Scheme. The annual contribution is treated as a deductible business expense in term of Section 36(1) (iv) of the I. • Who Pays Contribution? Mostly the employer contributes.T.A.Group Insurance Schemes • Eligibility Condition: It is not obligatory or statutory on the part of the employer to provide for pension to all employees. • Tax Benefits: The provisions relating to the approved Superannuation Scheme are set out in Part 'B' of the Fourth Scheme of the Income-Tax Act. both the employer and the employees may contribute. It is entirely up to him to decide to which class/ classes of employees he desires to extend the scheme.
80% of the contribution (s) towards the past service liability are treated as deductible business expenses spread over in the subsequent years of payment. Central Government has a similar scheme with minor modifications. occupied as they are in their day to-day activities where inflation is inevitable. find difficult to provide adequate security for their families. Objectives Of The Scheme: • Protection at low cost without individual evidence of health. In terms of a Notification issued by the Central Board of Direct Taxes . 16 . 3. GROUP SAVINGS LINKED INSURANCE SCHEME The people working in the metropolitan cities. in the case of the Contributions scheme qualifies for exemption under Section 80C of the Income-Tax Act. Keeping this in mind. LIC has come out with an attractive insurance scheme viz. Group Savings Linked Insurance scheme at a very low cost. The employee's contribution. Public Sector Organisations and also Large private business houses and industrial enterprises have introduced this scheme. Semi-Government Organisations.Group Insurance Schemes 2. Individual insurance with high premium in fact does not provide adequate insurance protection. • Group Insurance Scheme In Conjunction With Superannuation Scheme: The members of the Group Superannuation scheme can be covered under Group Insurance in conjunction with superannuation scheme so as to provide death risk cover while in service subject to certain conditions. Their need for insurance protection during service coupled with adequate savings for carefree retired life remains unfulfilled. the salient features of which are as under: A.
Simple procedures for granting life cover to large groups under one umbrella. Risk Premium and Savings • Premium. E. Risk Premium is utilized to offer life cover and the Savings Premium is accumulated in members account. the membership of the Scheme is compulsory. D. Interest On Savings: The present rate of interest allowed on saving portion of premium is 8% compounding yearly. b) For the new entrants to the Company. 17 . Introduction Of The Scheme: a) The Scheme can be introduced by employers provided certain percentage of employees is willing to join the Scheme. C.Group Insurance Schemes • • Attractive returns on savings to meet post retirement needs. B. Premium has two components i. Premia: • It is decided on the basis of Group size and the occupation of the group.e. Accident Benefit: Double accident benefit can be allowed to the extent of the Sum Assured for an extra Premium.
disablement. Liability is of increasing nature as it is linked with salary as well as 18 . voluntary retirement etc. LIC has introduced Group Leave Encashment Scheme. death. Just pay a yearly premium. The entire claim amount including interest earned payable on retirement or leaving service or on death is free from income-tax. The only insurability condition is that the employee should not be absent on medical ground on the date of commencement of the scheme. fund your leave encashment liability and let LIC take care of your worries. G. All future employees have to join the scheme compulsorily. GROUP LEAVE ENCASHMENT SCHEME Many employers are providing Leave Encashment benefit in addition to other retirement benefits to their employees which is a lumpsum amount payable to the employees or their dependants on retirement. Eligibility To Join The Scheme: Any employee irrespective of his present state of health is eligible to join the scheme subject to certain conditions. savings as well as risk premium is entitled for income-tax rebate under Sec. All employees who have not crossed the retirement age are eligible to join the scheme. So can be Medical Leave Encashment. • Funding of leave encashment: End-of-the-year leave encashment facility available to employees. if provided for. Tax Benefits: Employees' total contribution. 80C of the Income Tax Act.Group Insurance Schemes F. can be a huge liability to the company. • Nature Of Liability The amount depends upon the leave to the credit of the employee and his/ her salary at the time of exit. To meet this need of entrepreneurs and businesses. The premium paid by the employer towards insurance cover is treated as business expenses.
A uniform life cover per employee or graded cover will be provided under One Year Renewable Group Term Assurance Plan of LIC. It is. available to the employees and provide for the same in the books of accounts every year. therefore.Group Insurance Schemes leave position. 2. A Running Account will be maintained under the scheme and the contributions (excluding term assurance premium) will be credited to this account and all claims except term assurance cover will be settled out of the Running Account. The Company will submit the employees' data and rules for Leave Encashment. available to the employees and to provide for the same in their Annual Accounts. the employers have to account for the liability in respect of leave encashment facility. • Benefits: 19 . if any. 1995. • The Features: Group Leave Encashment Schemes (GLES) of LIC helps the employers in funding of their lave encashment liability. LIC will make actuarial valuation and find out the funding requirements which shall be quoted to the company. 3. The company will contribute as per the advice of LIC. A small term insurance premium will be charged in addition to contributions for funding. As per the amended section 209 (3) of the Company's Act 1956 and Accounting Standard (AS-15) dated January. It helps the employers in ascertaining the true cost of their products and services. necessary for the companies to ascertain liability in respect of Leave Encashment facilities. Interest at the rate declared by LIC from time to time will be credited to the Running Account at the end of the financial year. The salient features of the scheme are as follows:- 1. if any.
Schedule of repayment. On the exit of an employee or encashment of leaves during the service the Leave Encashment amount will be paid from the Fund of the scheme maintained with LIC. his/her family will be entitled to the amount of Insurance Cover. The amount of Term Insurance Premium paid for Life Insurance Cover will be treated as business expenses. 3. Under the Scheme. 4. 2. the premium depends upon: 1. GROUP MORTGAGE REDEMPTION ASSURANCE SCHEME ‘Group Mortgage Redemption Assurance Scheme’. the premium is payable in a single installment covering a decreasing life cover. Term of loan. in addition to his / her leave encashment benefit. 2. Outstanding loan amount at entry date. 3.Group Insurance Schemes 1. Under the scheme. Age (nearer Birthday) at entry of the member into the Scheme. 20 . Insurance cover every year will be almost equal to the loan outstanding at the anniversary date of each borrower. is a Group Insurance Scheme for the borrowers of Housing/Vehicle Loans from Financial Institutions where Loan is recovered under EMI. 4. The Life Insurance Corporation of India will do the Actuarial Valuation and will provide necessary certificate as per AS-15. 5. which will be tax-free. On the death of an employee. Rate of interest with which the loan was availed.
The Group Critical Illness rider allowable for each member shall be a minimum of 20 % of sum assured under the base plan and shall not exceed 100% of the sum assured under the base plan subject to minimum of Rs. The Group critical illness rider benefit to employees is given as an add on benefit to the Group policy which has an element of life cover. In case of death of the member during the coverage period . 2. 50 Thousands and maximum of Rs 20 lac per member. GROUP CRITICAL ILLNESS RIDER Critical Illness product (accelerated benefit) is basically offered as an optional Rider benefit to all Employer-Employee group policyholders (both existing and new schemes) along with Group term insurance schemes i. The relevant premium is to be paid by the Group Policyholder. 4.Group Insurance Schemes Any borrower may become member of this scheme . The minimum term of assurance is 3 years. Schemes along with which the rider can be given shall include Group insurance. 3. The Benefit will not be extended to spouses or dependants.e. • Features : 1.The claim proceeds are used to square off the outstanding loan. Existing Borrowers can join the scheme with certain conditions within 6 months of the commencement of scheme. Only full time permanent employees who are actively at work will be eligible for Critical Illness cover. Group Leave Encashment and Group insurance in conjunction with Superannuation. OYRGTA (One year renewal group term assurance) type schemes.life cover on the anniversary date preceding the date of death is payable . Group Gratuity (CA). All members of the attached policy should participate at inception and all eligible new members should compulsorily participate. The diseases covered under the rider (subject to certain exclusions) are : 21 .
Heart attack (Myocardial infarction) 4. In other words. No Critical Illness Benefit shall become payable to a member if the disease occurs within 90 days of the start of the coverage for that member of the scheme. Heart valve replacement 8. The Group Critical illness (Accelerated) Benefit pays a lump sum amount as a percentage of Sum assured out of the Sum assured under the life cover in the event of occurrence of 8 diseases covered under the rider. under the base plan (i. the benefit is reduced by the amount of critical illness benefit payable or already paid. Stroke 5. • Benefits : 1. However. 4. The rider shall terminate on payment of the Critical Illness benefit. 3.Kidney failure (End stage renal disease) 6. This period of 90 days shall be called “Waiting period”.Group Insurance Schemes 1. If critical illness benefit is payable or already paid. Aorta (Surgery of Aorta) 7.. 2.e. Cancer 2. In case of death nothing is payable under this rider.Major Burns. The Critical Illness Accelerated benefit is payable upon the first incidence of any of the 8 specified diseases and evidenced as per the diagnostic criteria specified. the difference between the base sum assured and the critical illness benefit already paid is payable on death. Coronary Artery (Bye pass) Surgery 3. the scheme on which the rider is opted for) benefits as under shall become payable : o A benefit equal to base sum assured if no critical illness benefit is payable or has been paid earlier. o • Exclusions: 22 .
5. 4. the benefit is payable only if the disease is a first incidence . hunting. or for which claim has or could have been made under any earlier policy. or which first manifested itself or was contracted before the start of the policy period. No payment will be made for any claim directly or indirectly caused by. 3. to any Critical Illness for which care. regardless of whether the earlier incidence occurred before the individual was covered or whether the insured was covered by us or another insurer. Any disease occurring within 90 days of the start of the coverage for each member of the scheme. or advice was recommended by or received from a Physician. narcotics or psychotropic substances unless taken in accordance with the lawful directions and prescription of a registered medical practitioner. Participation by the member of the scheme in any flying activity. except as a bona fide. 10. Alcohol or solvent abuse or taking of drugs. 8. Taking part in any naval.e. diving or riding or any kind of race. military or usurped power. arising out of. fare-paying passenger of a recognised airline on regular routes and on a scheduled timetable. during the waiting period). parachuting . Diseases in the presence of an HIV infection. revolution. military or air force operation during peace time. riot or civil commotion.mutiny. 12. strikes. or howsoever. Participation by the member of the scheme in a criminal or unlawful act.Group Insurance Schemes 1. mountaineering. (I.e. hostilities(whether war be declared or not). 6. 9. 7. bungeejumping. act of foreign enemy. Engaging or taking part in professional sport(s) or any hazardous pursuits. invasion. 23 . based on. 11. civil war . 2. underwater activities involving the use of breathing apparatus or not. Diseases that have previously occurred in the life of the member of the scheme i. insurrection. rebellion. Failure to seek or follow medical advice.armed or unarmed truce. Any congenital condition. treatment. including but not limited to . War.
Nuclear contamination.Group Insurance Schemes 13. Existing diseases are not covered. 2. The premium payable are exempted under section 80D of Income Tax act. explosive or hazardous nature of nuclear fuel materials or property contaminated by nuclear fuel materials or accident arising from such nature. suicide or attempted suicide. Intentional self inflicted injury. • Tax Benefits : 1. GRATUITY PLUS LIC’s GRATUITY PLUS PLAN . Additional exclusions may be disease-specific and would be incorporated into the definition of the disease. the radio active. All benefits under the policy are also subject to the Tax Laws and other financial enactments as they exist from time to time. This plan is different from the traditional Cash Accumulation Plan as the returns under the Plan 24 . 14. 15. while sane or insane. a unit linked plan for management of Gratuity Funds.
• Salient Features : 25 . o There is no bid offer spread under this scheme. o Facility of Switching between various funds. One switch every year is free of cost. o Hassle Free Administration of Scheme o Assistance for execution of legal documents and installation of scheme. o Scheme can be surrendered at any time. the company can also choose for each member a uniform level of cover equal to a minimum of one months’ salary or more. o Choice of 4 funds to meet various risk appetites. Cover can be equal to the gratuity payable for anticipated service. There is no surrender penalty imposed. o Flexibility in structuring the Gratuity Costs based on performance of Fund. Alternatively.000 crores. o It provides for life insurance cover at a very minimal cost. 50. GRATUITY PLUS PLAN is suitable for companies who desire to entrust Gratuity Fund management to an insurer and wish to have the flexibility of choice of investments.Group Insurance Schemes are linked to the performance of the chosen fund . • Why Is LIC’S GRATUITY PLUS PLAN The Best Choice? o This scheme comes to you from the country’s leading insurer backed by more than 16 crore policyholders and an asset size around Rs 4.
Group Insurance Schemes The Company will have the choice to invest in any one of the following funds Fund Type Corporate Investment in Government / (1) Government Guaranteed debt rated AA and above and debt instruments that possess the certificate rated AA+ and above. Securities.)Inclusiv e of (2) Bond Fund Income Fund Not less than 80% Not less than 70% ( 3) 100% Not more than 90% Nil Not more than 20% Balanced Fund Growth Fund Not less than 60% Not less than 50% Not more than 80% Not more than 70% Not more than 30% Not more than 40% Medium to High Low Low to Medium Medium Investment in Listed Equity Shares (4) Risk Profile Securities/Corporate including CP Note :The various funds offered are the names of the funds and do not in any way indicate the quality of these plans . Govt. (2) Short-term investment such as money market instruments rates PE & above and short term deposits with the Scheduled commercial banks. their future prospects and returns 26 .
Group Insurance Schemes Contributions will be allotted to the Fund at the following rate and will depend on the size and year of the contribution and will be as under: Size of the Contribution (Rs.1.) Allocation Rate 1st year 2nd year 97% 98%.50 Crores Above Rs.5% 99% 99% 99% 99% 100% 100% After deduction of the applicable charges. 10 Crores Above Rs.10 crores and more 98% 98. • Charges under the Plan: i) Premium Allocation Charge This is a percentage of the contribution appropriated towards charges from the contribution received. The Corporation shall arrange to inform the Policyholder the number of units and the value of the Unit Account at least once in a year or at any time on request.1.) Allocation Charges 27 . the balance amount will be applied to purchase units of the Fund type chosen. The Policyholder’s Unit Account will be subject to deduction of charges as specified herein. At any time . This charge will depend on the size and year of the contribution and will be as under : Size of the Contribution (Rs. the value of the Policyholder Unit account shall be the number of units in the account multiplied by the NAV of the Units on the date of calculation.50 Crores to Rs. The Net Asset Value (NAV) of each fund will be computed daily. 3rd year 99% 4 thY e a r Onwards 100% Less than or equal to Rs.
65% iii) Policy Administration Charge This charge shall represent the expenses other than those covered by Premium Allocation Charges and the Fund Management Charge.80% Balanced Fund 0.20 per thousand Term Assurance Cover granted to members will be charged.50 Crores Above Rs. In the first year an amount of Re 0.at the beginning of the policy anniversary every year . iv) Surrender Charge 28 .will be charged to the Policyholder Unit Account by canceling appropriate number of units . From the second year onwards.Group Insurance Schemes 1st Less than or equal to Rs.2000/.70% Bond fund 0. These are dependent on the selected type of fund and shall be charged at the time of calculation of NAV.1. In addition.10/.and a maximum of Rs.1.per member subject to a minimum of Rs.10 crores and more ii) Fund Management Charge Year 3% 2% 1.50 Crores to Rs. a fixed administrative charge of Rs.20 per thousand for the incremental Term Assurance Cover if any over the cover granted in the previous year will be charged by canceling appropriate number of units out of the Policyholder’s Unit Account at the NAV applicable at the time. 10 Crores Above Rs.10000/. The fund management charge per annum for different funds is given below: Growth Fund 0.5% 2nd year 2% 1% 1% 3rd year 1% 1% 1% 4thYear Onwards Nil Nil Nil This is a charge levied as a percentage of the value of Assets and shall be appropriated by adjusting the Net Asset Value. Note: Incremental Term Assurance Cover is the difference between Total Term Assurance cover as on the current policy anniversary and the previous policy anniversary.75% Income Fund 0. an amount of Re 0.
v) Switching Charges This charge is levied on switching of monies from one fund to another as described above. In a given policy year.per member subject to a minimum of Rs 5000/and a maximum of Rs 25000/-.1000 per switch and maximum of Rs. However. the policyholder can make one switch free of charge. vi) Mortality Charge This is the cost of life insurance cover to be granted to the members . Term Assurance Sum assured shall be the Future Service Gratuity or number of months salary subject to a minimum of one month salary of members as desired by the Policyholder.a of Unit Fund 29 .Policy Administration Charge . vii) Bid/Offer Spread Nil.1% of Policyholders Unit account subject to a minimum of Rs.0% p.Group Insurance Schemes This is a charge levied on the Unit Fund at the time of Surrender of the Contract.Fund Management Charge -The Maximum for each Fund will be as follows: i. at any time provided contributions are being received regularly under the policy. there is no Surrender Charge under this Policy .50000 per switch.Rs 50/. Bond Fund 2. Subsequent switches in that policy year shall be subject to a switching charge of 0. .Mortality charges shall be charged based on the age of each member and the Term Assurance Sum Assured Granted on the commencement of the policy and on every policy anniversary. vi) Charges to cover Service Tax Service tax is payable to the Government of India and shall be charged on the Mortality charge. The Policyholder can switch between any of the fund types . All the charges except Premium allocation charge and Mortality charge are reviewable with prior approval of IRDA and they will be subject to the following maximum limit :.
Service Tax Charge will be Fixed depending upon the Rates fixed by the Government from time to time.0. • Benefits Under The Scheme • Gratuity Benefits to Members whenever payable as per Rules of the Scheme shall be paid to the Policyholder by debiting the requisite no of units to the Policyholder’s Unit Account at NAV applicable at that time. • Special Features 1. At the end of five years from the policy anniversary for which the contributions have not been received from the policyholder if the policy is still in paid up condition the policy shall be compulsorily terminated.Switching Charges .a of Unit Fund 3.a of Unit Fund .Service Tax Charge .0% p. • In case of death of member. 2.0% p. AUTO COVER: If the contributions are not received on the policy anniversary the policy becomes paid up. Balanced Fund iv. FLEXIBILITY OF CONTRIBUTIONS: Contributions are payable on every policy anniversary. 30 . The Term Assurance cover equal to Future Service Gratuity or number of months salary subject to a minimum of one month salary of members as opted by the policyholder will be provided as Auto Cover for which the mortality charges together with service tax if any.Group Insurance Schemes ii. . However the term Assurance Cover will be provided to the members by way of Auto Cover for a period of five years from the policy anniversary for which the contributions have not been received from the policyholder. life insurance cover as opted for by Policyholder will also be paid by the Corporation. Growth Fund 2.5% p. Income Fund iii.5% of value of Policyholders Unit account.a of Unit Fund 2. will be deducted by cancelling appropriate number of units from the Unit Account .
• Risks Borne By The Policyholder The Value of the units is subject to market and other risks and there can be no assurance that the objectives of any of the above funds will be achieved. The benefit available on surrender of the policy will be the value of total number of units held in the Policyholder’s Unit Account at the time of surrender.Group Insurance Schemes • The policy can be surrendered at any time. In case the Policyholder’s Unit Account falls below this limit. employee data . At all times the Policyholder’s unit account should be sufficient to cover the relevant charges and benefits payable at such point of time. • How to install the Scheme : • Pass a resolution for creation of Gratuity Trust Fund. subject to a minimum balance of Rs. • Apply to Commissioner of Income Tax for approval under Part C of the Fourth Schedule of the Income Tax Act 1961 • Forward to LIC. Five lacs in the Policyholder’s Unit Account. Master Proposal signed by Trustees. the policy shall compulsorily be terminated and the balance amount in the Policyholder’s Unit Account will be refunded to the Policyholder. • Execute the Trust Deed and appoint Trustees for administering the scheme. The value of units within each Fund can go up or down depending on the different factors affecting the capital markets and may also be affected by changes in the general level of interest rates and other economic factors. 31 . If Trust already exists. All benefits under the policy are also subject to the Tax Laws and other financial enactments as they exist from time to time. Scheme Rules and cheque for payment of premium • Open a bank account in favour of the Trust. execute a Deed of Variation. copies of Trust Deed.
62 347.Group Insurance Schemes Number of schemes & the sum assured by LIC Year Group Insurance (incl.09 62.52 279.864.Social Security) 2008-2009 2007-2008 2006-2007 Group Superannuation 2008-2009 2007-2008 2006-2007 Linked Business G Plus* 2008-2009 20.56 67.21 .52. of Schemes Sum Assured/Annuity Per Annum 75.93 1.113 20.04 212.771 22.256.784.434 540 445 263 24 32 No.
Group Insurance Schemes 2007-2008 46 138. S S u o. ec) Group S uperannuation L inked Bus s G Plus ines 2006-07 2007-08 2008-09 Number of schemes offered by LIC for the period of 2006-2009 160000 140000 120000 100000 80000 60000 40000 20000 0 Group Insu.38 97. G P lus 2006-07 2007-08 2008-09 The Sum assured/ annuity per annum for the period of 2006-2009 33 . ec) Group S uperannuation L inked Busi. ( incl. S S oc.68 2006-2007 20 *Scheme introduced during 2006-07 25000 20000 15000 10000 5000 0 Group Ins (incl.
will be contributed by the member and/or Nodal Agency/State Government. • Minimum Membership Size: Twenty Five.etc. an amount of Rs. *50% of the premium i.100/. 34 .is payable. Rs.Self-Help Group.08.e. an amount of Rs.200/-per annum per member. • Eligibility: A person who is *Aged between 18 and 59 years.NGO.37.000/-is payable.75. *death/total permanent disability. a Welfare Fund/ Society.000/.30. • Benefit enhanced w. *Permanent partial disability. due to accident. Village Panchayat. *Below or marginally above poverty line *A member of any of the approved vocation/occupation groups • Nodal Agency: A State Government Department which is concerned with the welfare of any such vocation/occupation group.2006 In the events of *Death (other than by accident) of the member.f.500/. due to accident.e.Group Insurance Schemes Social Security Schemes JanaShree Bima Yojana (JBY) • Features The objective of the scheme is to provide life insurance protection to the rural and urban poor persons below poverty line and marginally above the poverty line. 15. an amount of Rs. • Premium : *The premium under the scheme is Rs.is payable.
Powerloom Workers. Tendu Leaf Collectors. Handloom Weavers. Fisherman. Salt Growers.Group Insurance Schemes *Balance 50% will be borne by the Social Security Fund. Cobblers. Toddy Tappers. B) The occupational groups are : Beedi workers. Forest Workers. Scheme for the Urban Poor. Sericulture. Leather and Tannery Workers. Primary Milk Producers. Hamals. Lady Tailors. Scheme for Women in Remote Rural Hilly Areas.Carpenters. Safai Karmacharis. Papad Workers attached to 'SEWA'. Handicraft Artisans. Handloom and Khadi Weavers. Brick Kiln Workers(Jalandhar). Physically Handicapped selfEmployed Persons. Shiksha Sahayog Yojana 35 . Rickshaw Pullers/ Auto Drivers. • Approved Vocation & Occupational Groups: A) The group that can be covered are like workers in (i) Foodstuffs like khandsari (ii) Textile (iii) Manufacture of wood products (iv) Manufacture of paper products (v) Manufacture of leather products (vi) Printing (vii) Rubber and coal products (viii) Chemical products like candle manufacture (ix) Mineral products like earthern toys manufacture (x) Fire cracker's workers (xi)Construction workers (xii)Other related cottage industries to be identified by Nodal Agencies and other groups as identified by the Nodal Agency and approved by LIC.
• Eligibility: Students studying in ix to xii standards. • Benefit: Scholarship of Rs 300/.The scholarship/s will be disbursed to the beneficiary students through the concerned Nodal Agency. As only a limited number of beneficiaries will be provided scholarship under the scheme.12. whose parents are covered under Janashree Bima Yojana. he will not be eligible for scholarship for the next year in the same standard. the selection for eligible students will be made on the basis of poorest of the poor.Group Insurance Schemes This is a scholarship scheme launched on 31.per quarter per child will be paid for maximum period of 4 years. 36 . • Premium: No premium is charged for the scholarship • How To Claim Scholarship: The Nodal Agency will identify the students. The scheme will be administered through Pension and Group Schemes Department of LIC of India.If a student fails and is detained in the same standard. The member of Janashree Bima Yojana whose child is eligible for scholarship has to fill up an application form (available with Nodal Agency) and submit to the Nodal Agency. The applications duly filled up and certified will be sent along with the list of the beneficiary students by the Nodal Agency to the concerned LIC. P&GS Unit for disbursement of scholarship/s. The benefit is restricted to two children per member(family) only.2001 for the benefit of children of members of Janashree Bima Yojana.
All the members will be provided with an identity card by LIC with an unique identity number. it is difficult to face life with a smile. a prestigious scheme of the Central and State / Union Territory Governments and administered by LIC brings a ray of hope and smile to these households. • Eligibility The member should be aged between 18 and 59 years The member should be the head of the family or one earning member in the family of rural landless household. • Nodal Agency The Nodal Agency shall mean the State / Union Territory Government appointed to administer the scheme. AAM ADMI BIMA YOJANA. • Age Proof 37 . And it becomes even more difficult when the future of your family is uncertain.Group Insurance Schemes Aam Admi Bima Yojana • Features In a rural landless household. The Nodal Agency shall act for and on behalf of the insured members in all matters relating to the Scheme. when everyday living is a struggle. • Identification Of Beneficiaries The State / Union Territory Government in consultation with the Panchayats will identify the persons to be covered under the scheme.
38 . • Premium • The premium under the scheme shall be Rs.500/- A free add-on scholarship benefit for the children of the members of AABY is provided under the scheme. • Benefits In the event of death of a member prior to the terminal date.out of which 50% shall be subsidized from the Fund created for this purpose by the Central Government and the remaining 50% shall be contributed by the State Government.200/.per month will be given to maximum two children studying between 9th to I2th Standard. the following benefits shall become payable: a) on death due to accident b) Permanent total disability due to accident c) Loss of one eye or one limb in an accident Rs. is payable half yearly . the Sum Assured of Rs.000/Rs. Accident Benefit: In the event of death by accident or Total / Partial Permanent Disability due to accident. Voters list Identity Card In case of doubt. A scholarship at the rate of Rs. however. 100/. each year.000/will become payable to the nominee.75.on 1st July and on Ist January.000/Rs.Group Insurance Schemes • • • • • Ration Card Extract from Birth Certificate Extract from School Certificate.30.37. This scholarship. a certificate from Primary Health Centre can be accepted as authentic proof of age.75.
The member whose child is eligible for scholarship shall fill up an application form and submit it to the Nodal Agency. Death/total permanent disability due to accident shall mean death / disability occurring within I80 days of the happening of bodily injury resulting solely and directly from accident caused by violent.Group Insurance Schemes • The premium shall be payable in yearly mode and no relaxation of mode of payment will be allowed. independently of any other cause. • Procedure To Claim The Scholarship • The Nodal Agency will identify the students. post mortem report will also be required to be submitted. documentary evidence of the accident as well as medical certificate from a Government Civil Surgeon or qualified Government Orthopaedician certifying permanent total / partial disability should be submitted. Experience rating adjustment will be allowed after 3 years based on claim experience. the claim should be submitted to the nearest branch office of LIC.000 or more members. if the group is of 2. The beneficiary will be required to furnish the original death certificate and the identity card issued by LIC to the Nodal Agency who will arrange to forward the same along with the claim form to the nearest P&GS Unit in the cities where P&GS Units are located. Even if the group size is small and the claim experience is adverse. LIC will settle the claim by sending Account Payee cheque directly to the beneficiary or by any other mode of payment as decided by LIC. external and visible means. police inquest report. The Nodal Agency in turn will submit the list of beneficiary students to the concerned P&GS 39 . • • Claim Procedure Claim procedure is simple. LIC may review the rates. In the cities where the P&GS Units are not located. In case of death by accident. In case of disability claim. FIR.
The Nodal Agency will pass on the scholarship to the eligible students. name of the school. member’s name. 40 . class.Group Insurance Schemes Unit with full details such as name of the student. LIC will send the Account Payee Cheque in the name of the Nodal Agency along with list of beneficiary students. master policy number and membership number. • Every half year. • Any other mode of payment of scholarship may be decided by LIC/Government. The Nodal Agency shall submit a utilization certificate before claiming the scholarships for the next half year.
IN WWW.GOOGLE.COM 41 .LICINDIA.Group Insurance Schemes References WWW.ORG WWW.IRDAINDIA.
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