Key to a successful business is keeping your employees motivated. Happy and secured employees work better, which in turn reduces the employer’s tension. Group Insurance is an insurance which covers a group of people (like employees of a common employer or professionals in a common group).
LIC brings you LIC’s GRATUITY PLUS PLAN , a unit linked plan for management of Gratuity 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 . 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.
ADVANTAGES
- Choice of 4 funds to meet various risk appetites.
- Flexibility in structuring the Gratuity Costs based on performance of Fund.
- Facility of Switching between various funds. One switch every year is free of cost.
- It provides for Life Insurance cover at a very minimal cost. Cover can be equal to the gratuity payable for anticipated service. Alternatively, the company can also choose for each member a uniform level of cover equal to a minimum of one months salary or more .
- There is no bid offer spread under this scheme.
- Scheme can be surrendered at any time. There is no surrender penalty imposed.
- Hassle Free Administration of Scheme
- Assistance for execution of legal documents and installation of scheme.
BENEFITS
- 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.
- In case of death of member, life insurance cover as opted for by Policyholder will also be paid by the Corporation.
- The policy can be surrendered at any time. 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. 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.
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, 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.
- The annual contribution is treated as a deductible business expense in term of Section 36(1) (iv) of the I.T. Act.
- 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.
- The employee’s contribution , in the case of the Contributions scheme qualifies for exemption under Section 80C of the Income-Tax Act.
FEATURES
- 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 Securities/Corporate debt ( Rated AA and above ) | Short-term Investment such as money market Instruments |
Investment in Listed Equity Share |
Risk Profile |
| Bond Fund | Not less than 80% | 100 % | Nil | Low risk |
| Income Fund | Not less than 70% | Not more than 90% | Not more than 20% | Low to Medium risk |
| Balanced Fund | Not less than 60% | Not more than 80% | Not more than 30% | Medium risk |
| Growth Fund | Not less than 50% | Not more than 70% | Not more than 40% | Medium to High risk |
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.
- The allocation charge shall be as follows :
| Size of the Contribution (Rs.) |
Allocation Rate |
|||
|
1st Year |
2nd Year |
3rd Year |
4th Year onwards |
|
| Less than or equal to Rs.1.50 Crores | 97% | 98% | 99% | 100% |
| Above Rs.1.50 Crores to Rs. 10 Crores | 98% | 99% | 99% | 100% |
| Above Rs.10 crores and more | 98.5% | 99% | 99% | 100% |
- Other charges : Mortality charges, Administrative charges, Fund management charges, switching charges, surrender charges and service tax.
- The Net Asset Value (NAV) of each fund will be computed daily.
SPECIAL FEATURES
AUTO COVER : If the contributions are not received on the policy anniversary the policy becomes paid up. 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 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, will be deducted by canceling appropriate number of units from the Unit Account . 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.
CONTRIBUTIONS : Contributions are payable on every policy anniversary.
RISKS BORNE BY THE INDIVIDUAL MEMBERS
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 under the policy are also subject to the Tax Laws and other Financial enactments as they exist from time to time.
Please know the associated risks and the applicable charges from LIC’s P&GS Units or Policy Document .
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