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