• Aegon Life Group Leave Encashment Plan

    Life Insurance
    • Reduce taxable income by up to Rs. 1,50,000 deduction under section 80C**
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    • Do more with plans that offer pure protection, retirement planning and investment options

    From the perspective of an employer, liabilities such as leave encashment always increase with time. Hence, it may become difficult for employers to pay these benefits to employees as required. Aegon Life Group Leave Encashment Plan is a unit-linked plan that helps in funding leave encashment obligation in a smooth manner. In effect, this is a separate fund that the employer can choose to set up for the payout of benefits at the appropriate time. The plan offers multiple investment options, and provides the policyholder the flexibility to make a choice based on his risk appetite. The plan also enables the insured to switch between funds at any point of time. This facility is provided absolutely free of cost.

    Eligibility – Who is the Aegon Life Group Leave Encashment Plan for?

    A customer needs to satisfy certain eligibility criteria to be able to purchase the Aegon Life Group Leave Encashment Plan. These factors are related to the age of the insured and the number of years of insurance that the customer would like to avail. The eligibility conditions for the Aegon Life Group Leave Encashment Plan are as follows:

    Eligibility Employer - employee groups
    Policyholder Employer
    Minimum group size 25 employees
    Minimum Entry Age 18 years
    Maximum Entry Age 74 years
    Maximum Maturity Age 75 years
    Minimum Policy Term 1 year
    Maximum Policy Term No limit. For individual member, the term will be subject to a maximum age of 75 years

    The age specified above is with respect to the last birthday of the insured.

    Sum Assured and Premium Range – What you Get and What it Costs?

    The premium payments that you make decide the amount of benefits that you will receive from the policy. The leaves benefit accrued on the policy is paid at the end of employment, either through retirement, resignation, or termination.

    The contributions towards leave encashment is not a level amount, and may vary from year to year. The premiums received towards the policy will be allocated to various investment funds chosen by the policyholder.

    In addition to the contribution towards the leave encashment benefit, the policyholder is required to pay the life insurance premium as well. The group life insurance premium at the time of inception or renewal of the policy is based on the rates specific to age. This amount is guaranteed for only one year. For the new joinees in the policy, the life insurance premium will be defined as a unit rate. This unit rate at the inception or renewal of the policy is calculated as follows:

    Unit rate of premium = (total life insurance premium) / (total sum assured) * 1000

    This unit rate will be constant for the entire policy year. Service tax as applicable will be charged on the life insurance premium.

    Sum Assured Minimum: Rs.1,000 per member Maximum: As defined in the policy
    Life Insurance Premium Minimum and maximum values depend on the total sum assured for all members under the scheme
    Premium Payment Mode Premium towards leave encashment benefit: This amount can be paid any time during the term of the policy Premium: Annual renewal type

    Plan Coverage – What the Aegon Life Group Leave Encashment Plan Covers?

    Life Insurance Cover Aegon Life Group Leave Encashment Plan provides life cover in addition to leave encashment benefits.
    Death Benefit The leave encashment benefit accumulated on the policy is paid at the end of employment due to death of the employee. The sum assured applicable for the individual member will also be paid. If the account balance is not sufficient to pay the predefined benefits, the shortage in funds will be borne by the policyholder. For all claims related to death, the life cover and the accrued leave encashment will be paid to the policyholder.

    Add-On Plans – Additional Coverage under the Aegon Life Group Leave Encashment Plan:

    This plan does not have provisions for any add-on coverage.

    Exclusions of Aegon Life Group Leave Encashment Plan:

    If a member enrolled in the scheme commits suicide within one year from the entry date, no death benefit will be payable. In this case, the insurance company’s liability will be limited to the refund of the premiums received, without the inclusion of any interest.

    Other Key Features of Aegon Life Group Leave Encashment Plan:

    Some key features of the Aegon Life Group Leave Encashment Plan are listed below:

    Free Look Period If the customer is not satisfied with the terms and conditions included in the policy documentation, he/she has the option of returning the policy back to the insurer within 15 days from the receipt of the policy document. This interval is referred to as the free look period. When the insurer receives the returned document, the policy will be cancelled, and the following amount will be paid to the customer: (Fund value on the date of return + proportionate life insurance premium for the unexpired period) - (stamp duty + medical examination cost)
    Grace Period In order to pay the life insurance premium, a grace period of 30 days is allowed.
    Discontinuance of Policy The policy can be discontinued when required, and no additional charges will be levied for the same. When the policy is discontinued, the policyholder gets the fund value less the market value adjustment.
    Discontinuance of life insurance premium If the renewal life insurance premium is not paid within the grace period allowed by the insurer, the policy will discontinue. A discontinued policy can be renewed within 2 years from the due date of the premium. In the case of death of the insured within 30 days from the due date of premium, the death benefit will be paid to the nominee. The investment in the funds continue even after the termination of the life coverage.
    Reinstatement Consider a policy for which the due premium for life insurance has not been paid, and the policy discontinues. If this policy is being revived within 2 years from the premium due date, the following documents need to be submitted:
    • Evidence of insurability of the members.
    • Payment of an amount that equates to the life insurance premium as on the date of reinstatement.
    When a policy is revived, all benefits will become payable as per the terms and conditions. If the policy is not revived within the revival period, it will terminate. The discontinuance value of a terminated policy will be paid to the policyholder.
    Increase or decrease in sum assured It is possible to increase or decrease the value of sum assured when the policy is being renewed.


    Tax Benefits – How you can save with the Aegon Life Group Leave Encashment Plan?

    The benefits received through the Aegon Life Group Leave Encashment Plan are eligible for tax benefits under the Income Tax Act, 1961. However, this is subject to change based on revisions in tax laws.

    Why you should Buy the Aegon Life Group Leave Encashment Plan from Aegon Life?

    Aegon Life is a leading provider of insurance solutions in the country. They have an extensive network of 59 offices spread across 46 cities. They also have a strength of 9600 insurance agents in India and a customer base that exceeds 4 lakh policyholders. The insurer has observed a steady growth in the insurance market owing to the superior quality of their products and the efficient customer service provided by them.

    Aegon Life Group Leave Encashment Plan FAQ's:

    Q. What are the charges associated with the plan?

    A. The charges linked to the Aegon Life Group Leave Encashment Plan are as follows:

    • Fund Management Charge of 0.30% per annum. This charge may be increased in the future, based on IRDAI guidelines.
    • Currently, the Premium Allocation Charge, Policy Administration Charge, and Discontinuance Charge are nil.

    Q. What funds will the premiums be allocated in?

    A. The plan offers multiple fund options to meet the varied financial goals of the policyholder. The premiums paid towards the Aegon Life Group Leave Encashment Plan will be invested in the following funds:

      SFIN Equities Money market instruments and fixed interest securities
    Group Debt Fund ULGF00128/03/11GDEBT0138 0% 100%
    Group Equity Fund ULGF00228/03/11GEQUITY0138   80% to 100% 0% to 20%

    Q. What additional benefits do the Aegon Life Group Leave Encashment Plan provide?

    A. Some of the benefits offered by the Aegon Life Group Leave Encashment Plan include:

    • Multiple Investment Options - The policy enables you to invest in multiple funds.
    • Switching Option - The policyholder has the flexibility to switch between funds at any point of time during the policy term. These switches are not associated with any charges.
    • Contribution Redirection - The contributions to investments can be redirected into funds of your choice and these need not be in alignment with the initial investment pattern. Redirection requests are serviced free of cost by the insurer.
    • Transparency - The Portfolio Disclosure of the funds will be performed by the insurance company on a quarterly basis. This helps customers in managing their funds better.
    • Additional units - The insurance company may add units to your policy account at specific times during the term of the policy. This is done to comply with the IRDAI guidelines on Fund Value yield.
    • Declaration of NAV - This is done on a daily basis to help you track the performance of your chosen funds.

    Q. What are the particulars when a new member is added to the scheme?

    A. New members should initially meet all eligibility criteria, as specified under the scheme rules. This information will be provided to the new members by the policyholder. The life cover will commence when the new member joins the company. The life insurance premium should be paid on an annual basis in advance.

    Q. How do I check the status of my Aegon Life Group Leave Encashment policy?

    A. The status of your policy can be checked by contacting the insurance company through their toll-free number or by sending them an email.

    Q. Is Service Tax applicable on the policy benefits?

    A. Yes, service tax and other applicable taxes will be charged on the premium or benefits that are paid through the policy.

    Q. Is death due to terrorist attacks covered under the Aegon life insurance plans?

    A. All Death Benefit claims under the base insurance policy when the death was caused by terrorist attacks is covered under the Aegon life insurance plans. Only the ADDD rider excludes this cover.

    Q. How do I inform the insurance company of a death claim?

    The claimant has to submit all claim forms and other relevant documents to the nearest ALIC branch office. Claims can also be raised online on the Claims Process Page at the insurance company’s website.

    Q. How long does Aegon Life Insurance take to settle a claim?

    A. Aegon Life Insurance focuses on settling claims within 7 working days after reception of all records and documents from the claimant. If the claim requires additional investigation, the time for claim settlement will be extended further. The decision will finally be communicated to the claimant through a letter from the insurer.

    Q. What are the most common reasons for rejection of life insurance claims?

    A. Most life insurance claims get rejected due to the following reasons:

    • Fraudulence - This indicates a deliberate attempt to cheat the insurer by submitting claims that are not true.
    • Not disclosing pre-existing medical conditions at the time of policy purchase.
    • Not disclosing lifestyle attributes such as consumption of alcohol and usage of tobacco products, at the time of policy purchase.
    • Committing suicide within the first policy year.
    • Not paying the premiums on time, leading to lapsation in policy.

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