Gratuity is a statutory benefit to the employees as per Gratuity Act which mandates the payment of Gratuity as per the years of service rendered. A person is eligible to receive gratuity only if he has completed minimum five years of service with an organisation. However, it can be paid before the completion of five years at the death of an employee or if he has become disabled due to accident or disease. It is a non-participating, non-linked, fund-based variable insurance policy.
Guaranteed interest rate
Built in Insurance arrangement for the employees for future service
Insurance cover for future service gratuity
Fund management under interest accumulation system
Claim settlement on exit as per company rules/gratuity act
On death of the life insured during the term of the policy while in service before the retirement age, the Sum assured, along with the gratuity benefit, under the basic plan is payable, provided the policy is active.
On retirement of a Member, the Gratuity Benefit will be paid as specified under the scheme.
The contribution made by the employer is treated as business expenses and exempted under Sec37(1) of Income Tax Act 1961.
The gratuity amount received by the employee is taxable when it exceeds an amount of 20 lacs.