Securing the future of an employee is a key concern for employers today, with employee satisfaction often resulting in increased productivity and greater profits. PNB MetLife ensures that employees aren’t worried about their financial security, with its Traditional Employee Benefits Plan designed exclusively to meet their needs.
Eligibility criteria for PNB MetLife Traditional Employee Benefits Plan:
|Minimum entry age||18 years|
|Maximum entry age||Normal retirement age minus 1 year For example, if the retirement age is 60 years, the maximum entry age is (60 – 1) = 59 years|
|Maximum age at maturity||Normal retirement age as per the rules imposed by an employer|
|Minimum group size||10 members|
|Maximum group size||No upper limit|
|Minimum fund contribution||Rs 1 lakh|
|Maximum fund contribution||Rs 500 crore|
Key features of PNB MetLife Traditional Employee Benefits Plan:
The table below highlights some of the key features of PNB MetLife Traditional Employee Benefits plan.
|Plan type||A non-linked variable insurance plan for groups which is based on funds|
|Minimum policy term||1 year, which can be annually renewed|
|Maturity benefits||No maturity benefit per se, on exit an amount adjusted to the market value will be paid (minus certain deductions)|
|Premium payment frequency||Flexible, with an option to pay in instalments|
|Loan||No loan facility available|
|Free look period||15 day free look period is offered for this product|
|Revival/Renewal||Automatic renewal every year. In cases where the fund value is below the minimum amount, a 30 day notice will be given to contribute to the fund|
|Policy coverage||Death benefit, Retirement/termination amount|
Benefits of PNB MetLife Traditional Employee Benefits Plan
Some of the key benefits offered by PNB MetLife Traditional Employee Benefits plan are mentioned below.
- Assured interest – A minimum assured interest of 2% per annum on the contribution is offered under this plan.
- Ease of payment – Contributions to this Group plan can be made in instalments, as per the availability of financial resources.
- Tax benefits – PNB MetLife Traditional Employee Benefits plan offers tax benefits under the current provisions of the Income Tax Act.
- Employee motivation – Financial security ensures employees are motivated, resulting in talent retention and increased productivity.
Working of PNB MetLife Traditional Employee Benefits Plan
Being a fund based plan, a number of calculations and adjustments are made to the contribution, ensuring that investors get what they expect from it. Let us consider the example of RJ Communications, a small technology firm with around 20 employees. The boss, Miss Shreya decides to invest in this plan to offer financial security to employees, thereby motivating them. She contributes a sum of Rs 5 lakh towards this plan, paying the entire amount in one go.
Now, the fund offers a minimum assured interest of 2% per annum, which is split into 4 quarters, making the interest equivalent to 0.5% every quarter. The fund interest for the year is said to be 8.4%, taking the overall interest per quarter to 1.5% [(8.4 – 2 - 0.4)/4 = 1.5%]. The additional 0.4% charge in the above equation is an annual fund management charge. The fund value at the end of a quarter is now computed by using a formula, which in this case computes it to Rs 6.12 lakh.
In the event of demise of an employee during a policy period, a benefit will be paid from the fund value accrued, with this amount depending on the agreement between parties.
Contribution towards PNB MetLife Traditional Employee Benefits Plan
Employers can make contributions ranging between Rs 1 lakh and Rs 500 crore, with the fund offering flexible payment options, including the ability to pay in instalments. In cases where the contribution falls below the minimum requirement, an intimation will be given to the employer to increase the fund amount.
There are no additional riders under this plan.
GST of 18% is applicable on life insurance effective from the 1st of July, 2017