EMPLOYER-EMPLOYEE INSURANCE
  • This is a special way to buy insurance.
  • Companies (private limited, partnership and public ltd.) can make use of this
    to give benefits to their employees.
  • There are two options available under this policy.
Option-1
  • Proposer and Life Insured is the Employee. This is just like a normal life
    insurance policy.
  • The premium under the policy will be paid by the Employer. It is treated
    as a perquisite to the employee.
  • Employer is just the premium aggregator.
  • Employee can enjoy Tax benefits under Sec 80C and Sec 10(10D) of Income
    Tax Act’1961.
Option-2:
  • Proposer is the company life insured is the Employee. Company is the
    owner of the policy and also pays the premium
  • At the time of purchase of this policy the company specifies the condition
    on the happening of which the policy will get assigned to the employee.
  • This option is used by the company as a tool to retain employees
  • For example, the company can say that it would transfer the ownership of
    the policy to the employee., after he works with them for 3 years. The
    employee can continue paying the premiums post assignment.
  • This policy provides insurance for the employee as an incentive/benefit or
    reward
  • Proof of employability is mandatory for purchase of this policy.
  • Under this arrangement, any product can be sold subject to internal guidelines of Life Insurance companies
  • There is no restriction on minimum number of employees to be covered
    under employer-employee insurance