TOPIC 6.

1 GOVERNMENT SERVICE INSURANCE SYSTEM

The GSIS is a government-owned and controlled corporation (GOCC) of the Philippines. Created by
Commonwealth Act No. 186 and Republic Act No. 8291 (GSIS Act of 1997), GSIS is a social insurance
institution that provides defined benefit scheme under the law. It ensures its members against the
occurrence of certain contingencies in exchange for their monthly premium contributions. -Wikipedia

GSIS members are entitled to an array of social security benefits, such as life insurance benefits,
separation or retirement benefits, and disability benefits.
GSIS is also the administrator of the General Insurance Fund by virtue of RA 656 (Property Insurance
Law). It provides insurance coverage to government assets and properties that have government
insurable interests.
COVERAGE
The GSIS covers all government workers except:
 Members of the Judiciary and Constitutional Commissions who are covered by separate
retirement laws;
 Contractual employees who have no employee-employer relationship with their agencies;
 Uniformed members of the Armed Forces of the Philippines and the Philippine National Police,
including the Bureau of Jail Management and Penology and the Bureau of Fire Protection.
BENEFITS AND SERVICES:
LIFE INSURANCE
All members of GSIS have compulsory life insurance coverage classified into two types:
 Life Endowment Policy (LEP). GSIS started with the LEP program. Designed to provide members
with life insurance coverage while still in active service, LEP provides maturity benefits to policy
holders upon reaching the maturity of their policy.
 Enhanced Life Policy (ELP). ELP took effect on August 1, 2003. It provides an automatic yearly
insurance coverage to new members of GSIS based on their monthly compensation. ELP is
designed to provide an enhanced death benefit for the family of the deceased member.
RETIREMENT
GSIS offers various retirement programs that retiring members may choose from depending on
their age and length of service.
Retirement under RA 8291
Five-year lump sum or cash payment with instant pension.
Retirement under RA 660
Also called “Magic 87”, this option provides both annuity and lifetime pension
Retirement under RA 1616
Refund of GSIS premiums and gratuity payment from employers
Retirement under Presidential Decree 1146
Only those who have been in government service after May 31, 1977 but before June 24, 1997 may avail
of this retirement program. Retirement under PD 1146 gives members a choice between a Basic
Monthly Pension (BMP) and Cash Payment.
Retirement under RA 7699 (Portability Law)
Combining GSIS and SSS periods with paid premiums to qualify for retirement programs offered
by both pension funds.
SEPARATION
The Separation benefit is given to employees who have not reached the retirement age of 60 but have
been separated from the service. The benefit can either be in the form of cash payment or both cash
payment and pension.
Eligibility and Benefits
1. If the member has been in the service for at least three years but less than 15 years, and
below 60 years of age:
Cash payment equivalent to 100% of the Average Monthly Compensation (average salary in
the last three years) for every year of service payable upon reaching age 60.
2. If the member has been in the service for at least 15 years and is below 60 years of age:
Cash payment equivalent to 18 times the Basic Monthly Pension (BMP) payable upon
separation and monthly pension for life starting at age 60.
BMP= (.025) x (AMC +700) x Period with Paid Premiums

UNEMPLOYMENT BENEFITS
The unemployment benefit is paid when permanent government employees who have paid the required
12 months integrated contributions under RA 8291 are involuntarily separated from the service as a
result of the abolition of their office or position usually resulting from reorganization. The benefit is in
the form of monthly cash payments equivalent to 50% of the average monthly compensation (AMC).
The duration of the benefit depends on the length of service and ranges from two months to a
maximum of six months.
ISABILITY
Disability refers to any loss or impairment of the normal functions of the physical and/or mental
faculties of members, which permanently or temporarily prevents them to continue with work or
engage in any other gainful occupation resulting in the loss of income. The corresponding disability
benefits for each kind of disability granted to members are based on the duration of incapacity to work
and actual loss of income.
SURVIVORSHIP PENSION
Recognizing that pension is an earned right and not a privilege, the Board of Trustees restored the
survivorship benefit of surviving spouses of members and pensioners even if they are gainfully
employed and receiving other sources of income or pension.
FUNERAL BENEFIT
GSIS provides a P30,000 funeral benefit payable to the entitled member of the family of the deceased.
EMPLOYEES’ COMPENSATION
The employees’ compensation benefit (or disability benefit) is a compensation package for public and
private sector employees and their dependents in the event of work-related injury, sickness, disability or
death.
LOANS
Consolidated Loan
The Consolidated Loan (Conso-loan) combines five different loan products into one-Salary Loan,
Restructured Salary Loan, Enhanced Salary Loan, Emergency Loan Assistance, and Summer One-Month
Salary Loan. Members availing of a conso-loan for the first time receive a one-time automatic
condonation from the outstanding penalties or surcharge incurred from these loans.
Policy Loan
The Policy loan is a loan program which a member may avail from his/her GSIS life insurance policy. The
loan, bearing an 8% interest rate, may be paid either through monthly amortization or deduction from a
member’s existing life insurance policy contract.
Emergency Loan
The Emergency loan provides assistance to GSIS members affected by natural calamities.

For more details, please visit the official website of GSIS.

You may also refer to RA 8291, otherwise known as the Government Service Insurance Act of 1997
which amended the 20-year old revised charter of the GSIS, known as Presidential Decree No. 1146.
This, too, can be accessed thru the internet.

LEARNING ACTIVITY 6.1

1. Discuss the General Insurance mandate of GSIS
2. Describe the General Insurance products of GSIS?