Insurance coverage from Employee Provident Fund Organization (EPFO) is linked to an employee’s total service and average provident fund balance before death. The employer contributes 0.51% of the employee’s salary towards EDLI coverage. The Shriram Group Term Life Insurance in lieu of EDLI plan is a better alternative, as it provides more life insurance benefit to employees, irrespective of their salaries, PF balances, and service. Premiums may also be lower than the employer contributions towards EDLI when the group is young and the employee’s salary is high.
Under this plan, a single master policy is issued to the employer and this provides life insurance coverage to all employees (group members). The plan provides a uniform level of coverage that starts at Rs.3,62,000. The basic life cover under the plan can be enhanced through the use of the Accident Benefit Rider.
The eligibility conditions pertaining to the Shriram Group Term Life Insurance in lieu of EDLI plan are as detailed below:
|Minimum Entry Age||14 years|
|Maximum Entry Age||74 years|
|Maximum Maturity Age||75 years|
|Policy Term||1 year, can be renewed annually|
|Nature of the scheme||Statutory|
|Minimum group size||20|
The minimum sum assured under the plan is Rs.3,62,000. The maximum sum assured is Rs.15 lakh.
Premiums can be paid towards the plan annually, semi-annually, quarterly, or monthly. The premium varies based on several factors such as the industry to which the group belongs, region where it is located, etc. When the premium is paid at a frequency other than yearly, the effective premium will be the annual premium multiplied by a modal factor, as shown below:
The insurability condition is that the member should be an employee of the company that holds the policy. The member should also be a part of the Employee Provident Fund Scheme.
In order to set up the scheme, the employer should first notify the employees of the intention to purchase the plan. The data pertaining to employees and the master proposal form should be sent to the insurer. The employer is also expected to pay the premium towards the policy.
The benefits offered by the Shriram Group Term Life Insurance in lieu of EDLI plan are listed below:
|Benefits to the employee||
|Benefits to the employer||
Additional features of the Shriram Group Term Life Insurance in lieu of EDLI plan are described below:
|Accident Benefit Rider||This rider can be added to the base plan to enhance its coverage. The sum assured under the rider is paid at death or total and permanent disability of the member in an accident. The rider is allowed only when members are aged between 18 and 65 years at the inception or renewal of the policy.|
|Member exit||When a member exits from the plan, the employer must inform the insurance company of it so that the insurance coverage offered to him/her is ceased. The insurer will refund the premium received from those members for the remaining coverage period. Also the employer should inform the insurance company when a new member enters the group. The proportionate premium for the remaining term should also be determined on a monthly basis.|
|Policy renewal||The policy can be renewed annually by paying the premium. The employer has to maintain the records of premium payments and keep this information available to the insurer for inspection at any time. If the benefits under the EDLI scheme are altered by the EPFO, the employer should take necessary steps to modify the insurance benefits as well. This should be done in consultation with the insurer.|
|Grace period||The grace period allowed for outstanding premium payment is as follows:
|Policy revival||If the renewal premium is not paid before the grace period ends, the policy will move into lapsed status. The lapsed policy can be revived within the policy term by paying the outstanding premiums. There may be other requirements for policy revival based on the approved underwriting policy of the insurer.|
|Free-look period||The policyholder will have a 15-day free-look period during which he/she can review the policy terms and conditions. If the policyholder is not satisfied with the same, the policy can be returned to the insurer, stating relevant reasons. The insurance company will then refund the paid premiums after deducting the medical examination costs and stamp duty charges. Policies that were bought through distance marketing have free-look period of 30 days.|
The Shriram Group Term Life Insurance in lieu of EDLI plan offers tax benefits as applicable.
Additional benefits of buying the Shriram Group Term Life Insurance in lieu of EDLI plan from the insurer include:
A leading insurance provider in India, Shriram Life Insurance has a wide network of 528 branch offices throughout the country. The company has managed more than Rs.1,020 crores in revenue in the past.
The claim settlement process of the insurer is very efficient and issues/queries raised by customers are resolved within the shortest time. Shriram Life Insurance also offers an extensive range of insurance products that cater to the varied needs of customers. These include term plans, group policies, child plans, ULIPs, etc.
The insurer has received several awards for its efficient customer service and marketing strategies. Some these include:
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