With the increase in the number of people employed the organization is more responsible for the society, its liquidity needs for the core business grow as well. For such a growing organization, financial and legal responsibilities also grow with the size. In our country (India) law has mandated certain financial obligations on the organizations with a sufficient number of employees. Gratuity is one such responsibility that allows an employee, staying in the organization for a longer duration, to be awarded and makes the employer liable to bear the cost of the award.
What is Gratuity?
All of us must be aware of the term Gratuity. Gratuity is a mandatory advantage to be offered to workers according to the Gratuity Act, 1972. It is a lump sum figure paid out to the worker at the time he/she is separating from the organization. An employee is entitled to the amount of gratuity only if he or she accomplishes the conditions mentioned in the Gratuity Act.
The function of the Policy
An organization can opt to save a sum of money with the intention of fulfilling the expected gratuity accountability. The pooled money formed under this scheme is then utilized to make claim payments for gratuity when employees leave.
An organization is liable to offer their workers the gratuity advantages. Every company needs to have sufficient funds to fulfill the gratuity needs of its employees at the right time.
Group Gratuity Insurance Plans
According to the law, an employer is liable to manage the gratuity funds and to pay to the leaving employee at the perfect time. However, in this ever-changing world, it is not necessary that a company always has extra funds to pay whenever asked to, which is usually difficult given the liquidity needs of the business itself. Therefore, it is advisable to go for a Group Gratuity Insurance Plan to take care of the sudden gratuity liability of the organization.
Benefits of the plan
A group gratuity insurance plan will not only help reduce the burden of sudden gratuity liability towards an employee but will also offer other benefits. The organization earns interest on the money deposited under the scheme and can avail tax exemption as well on the money invested.
Profits and Long-Term Investment Benefits
Gratuity savings can be parked in market-linked plans, which allows capital growth with relative safety. High capital growth has two benefits in the long run: one, your future premium obligation will be lower; and two, you can reward your valuable employees better.
All these benefits make the group gratuity insurance plan a preferred option to take up. It will enable an organization to fulfill the needs of the employee without putting added stress on the company funds. Also, not a lot of money is required to be paid to maintain the insurance policy.
Insurance providers now days have started coming up with newer Insurance plans that provide some additional benefits as well. These plans are not very expensive but offer additional benefits. However, it is advisable to do comprehensive research before picking up anything it will be for a large group of people and can affect the reputation of the organization positively or negatively in the future. So, you should take care of the advantages of all that are involved.
The best part is that all the information regarding these plans is available online. Thorough research can help you to get a better idea of all the plans. SecureNow offers a wide variety of insurance policies along with additional benefits like 24×7 chat support, easy processing, etc.
However, while getting any plan processed you should take care of some of the important things like:
- Proper paperwork: Since the group insurance scheme involves a large number of people related and unrelated directly to the business, the law becomes a party to the agreement. Thus, extensive paperwork may be needed by the insurer to fulfill the criteria for the insurance and also complete the risk assessment of the organization. Any discrepancy in papers may lead to rejection of claims later and a loss to the organization.
- Timely Premium Payment: Timely premium payment will keep the policy in force, and the organization covered at all times for gratuity liability.
- Falsification: Insurance contracts are based on the principle of ‘utmost good faith’; i.e. insurer believes every information the organization provides and vice versa. Any false information provided at the time of signing the contract allows the insurer to deny the claim or even cancel the policy.
Therefore, research online, look for the perfect plan and book one now.