Most employers buy an accident cover as a benefit extended to employees. Death or disability caused at work can also become an employer’s liability. It is important to identify the Sum Assured you need for your employees and the right protection covering all possibilities arising from an accident. Buying a Group Personal Accident needs sound advice to get it right. Group Personal Accident Insurance Policy provides 24*7 worldwide coverage for accidental death, even after office hours. It covers medical expenses such as fractures, which are typically not covered in other insurances. In group accident policy or personal accident insurance, the sum assured for each employee can be set based on combinations of paygrade, designation, profile, department, annual compensation or marital status. Children's education benefit is paid to the nominee for a maximum of 2 dependent children of insured. Group personal insurance allows the addition or deletion of employees. Premium is charged proportionately for actual coverage and adjusted regularly. A lump sum fixed amount is paid on death or disability, typically within 30 days of filing a claim.
All Accident covers are designed to cover Death and Disability. Unless carefully designed, it may not cover all possible types of disability or may have inferior covers which pay less.
Flexible and Wide
Group accident covers bought by employers do not restrict cover to only a work-related accident. Claims arising out of any type of accident irrespective of where they happen are covered.
You can buy medical benefit to pay for expenses of Medical treatment arising out of an injury. Medical benefits can also be defined as per each client’s need to pay for the required treatments.
A death can cause financial losses which can affect the family over several years. You can buy education allowance for children till adulthood and other covers which provide extra protection.
Disability Can Devastate
Disabilities can have devastating outcomes including loss of income, lifestyle modifications and alterations. Find out how to make your insurance pay for such increased expenses.
What are the Exclusions?
There are many exclusions to this policy including accident due to drunken driving or drug abuse, hazardous activity and criminal acts. Know the limitations before you buy.
Human capital is the most precious resource for every organization. The care for your employees should go beyond to care for their families, in case of the death of an employee. A Group term plan provides an ideal cover to protect the dependents of your employees from any adversity. A group term life insurance plan helps to cover any kind of death of the insured person and can help maintain a healthy retention ratio for the employer. Group Term Insurance Policy is policy, primarily covers the death of the insured person. It has other additional benefits to the insured along with death coverage which can be introduced in policy by paying an additional premium. Group term life insurance policies in India are more economical because administering schemes on a group basis has a lower cost. Group Term Life Insurance plans offer tax benefits to both employers and employees.
A Group Term plan does not require lengthy documentation and applications. It is easy to buy with a single document processing to provide the cover for all employees.
No Medicals Tests
There is no medical test required for employees to extend a cover. Employees are covered till a specific Sum Insured agreed. Only employees exceeding the limit need Medicals.
Group policies do not exclude even a suicide death. An employee on a long period of Medical leave, before policy start date, may need to be examined before coverage.
Key man insurance is purchased to protect a company from financial loss arising due to the death of a critical employee or director. A lender or an equity investor may also require you to buy a key man insurance to protect their investment in case of any adversity. The underlying concept of this insurance cover is that the key person may not be replaceable easily, owing to his specific business knowledge or technical capabilities, leading to sustained losses. Since the purpose is to protect the company liabilities, the premium paid can be charged as an expense in company accounts.
How is the sum assured chosen
Lenders or equity investors define the sum assured as their requirement, which can be insured. When a cover is purchased for protection of company profits, one needs to identify the profit attributed to the person to be able to insure adequately.
Will Insurers offer any Sum Assured
Strange as it may seem, insurers may not write the policy for any Sum Assured you may seek. A ten crore cover for an employee with annual salary of 20 lacs may be denied. Risk is always measured in line with the economic value of the Key Man.
How is Key man cover underwritten
Since the cover is usually high in value, insurers need to validate the net worth of both the company and the Key Person. This may require financial statements, IT returns, loan or equity agreements. Medical examination may also be done.
EDLI scheme is a specialized insurance product that allows an employer to shift the Deposit linked insurance from the Provident Fund account to a Special EDLI term plan and save cost of insurance. Group Employee Deposit Linked Insurance is higher than the coverage provided by the Employee Provident Fund Organisation (EPFO). Employee Deposit Linked Insurance (EDLI) scheme is a life insurance cover linked to the employee provident fund. Often the saving on insurance is 50% of what is paid to the department. Employers use the saving to add to their bottom line or for improvement of employee benefits with better term covers depending on their choice. The premium paid by an employer under the EDLI scheme is treated as a business expense and is subject to tax deductions.
The first step to implement the change is to take signed consent from majority of the employees. The change needs to be notified prominently and employee acceptance obtained within a month of publishing the notice.
Requires RPF Approval
Employers need to obtain a No Objection Certificate (NOC) from the Regional Provident Fund to enable implementation of the EDLI cover. Insurers can assist in the process to make the transition smooth and easy to implement.
EDLI is not a Term Plan
EDLI policy can only be purchased from insurers who have an approved product to offer. Any general term plan purchased from any insurer may not be compliant to replace the Employee Deposit Linked Insurance of PF.