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.
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