Group critical illness cover is beneficial to both employers and employees. Under this cover, in case an employee needs medical care due to an illness defined as a critical illness, he will be paid an amount in lump sum. However, the cover requires that the employee should survive for a minimum of 14 days from the time of diagnosis and 60 days in the event of Permanent Total Disability.
How is the amount calculated?
The amount provided by the cover varies with the salary of the employees. Usually, the lump sum amount to be paid is calculated by multiplying the annual salary of the employee by 2. I.e., 2 X annual salary. It is also tax free.
What are the illnesses covered?
It should be noted that several of the illnesses covered earlier do not appear in the present list of critical illness conditions. The list varies with different companies although conditions like heart attacks, strokes, cancer and heart by-pass surgery is with every list.
Other conditions like a major organ transplant, blindness, deafness, paralysis, Alzheimer’s disease and kidney failure are also covered under the policy.
Need for critical illness insurance cover
The amount received is often proved to be of great help to the employee to manage his finances in the aftermath of a critical illness. It helps to replace the lost income due to the illness as well as to cover the cost of extended treatments. Sometimes a change of lifestyle is necessary after the illness which can be easily made with the amount paid. The employee or dependants of the employee in the event of his death may use the amount to pay off mortgages or any other longstanding liabilities.
What are the benefits?
Group critical illness insurance cover is mutually beneficial to both employees and employers. This cover ensures a confident driven work environment and motivates the employees. The companies which adopt this cover tend to have a slower attrition rate and lower hiring costs.
Benefits received by the employer
• With due help from us in researching the market, the employer will receive the best policy cover for the right price.
• We provide communication and administrative assistance.
• With a good critical illness insurance cover, the company will be able to acquire the best people in the industry and retain them for long.
• The employer will have enhanced reputation which in turn will boost employee confidence.
• The cover helps the employees to return to work as early as possible.
Benefits received by the employee
• The employee will receive a large sum as his insurance claim. It will help him to fund his medical needs.
• Almost all the common critical illnesses are covered under the policy.
• The policy premium is tax free. Moreover, the inheritance tax, in most cases, will not be charged on benefits.
• It acts as a support in the time of rehabilitation.
The information provided is general in nature. Since the taxation laws are future changes, any decision should be taken only under the guidance of a professional tax adviser who is familiar with the relevant areas.