PNB MetLife Group Gratuity Plan

The MetLife Group Gratuity plan is a group linked plan that provides a full package service for those employers who wish to completely outsource their gratuity management process. All matters relating to gratuity disbursement to employees and the management of the systems thereof will be handled through this MetLife plan.

Eligibility Conditions of PNB MetLife Group Gratuity Plan

Entry Age Minimum – 18 years.
Maturity Age 70 years.
Sum Assured Rs.1,000 per life insured.

Key Features of PNB MetLife Group Gratuity Plan

Type A unit linked life insurance plan.
Basis Group
Coverage
  • Death Benefit

    In the event the life insured dies when the policy is in effect, life cover of Rs.1,000 will be paid on the death of the member to his / her dependants.

  • Maturity Benefit

    Upon the retirement / resignation / termination / disablement of plan member, benefits payable will be the higher of:

    • The benefits paid under the provisions of Payment Of Gratuity Act, 1972, or
    • Employer’s approved gratuity scheme.
  • Surrender benefit

    The cash surrender value is the account balance at the time of surrendering the policy minus the surrender charges.
Premium paying term Regular.
Premium paying frequency Annually.
Bonuses Not available.
Loan Not available.
Free look period 15 days.

You need to submit a written reason for objection. The premium will be provided to you if you give a written notice for cancellation along with the policy document.
Grace period The policyholder will get 30 days of grace period from the premium due date to make the payment. If there is a claim before the expiry of the grace period, then the sum assured paid will be reduced for the unpaid premiums.
Tax benefits You can avail tax benefits under section 80C and Section 10(10D) of the Income Tax Act, 1961.
Charges
  1. Surrender Charges:
    Policy Year 1 2 3 4 onwards
    Surrender Charge 0.05% of Fund Value, subject to a maximum of Rs.5,00,000 0.05% of Fund Value, subject to a maximum of Rs.5,00,000 0.05% of Fund Value, subject to a maximum of Rs.5,00,000 Nil.
  2. Switching Charges:

    The first 2 switches between funds in the same policy year will be free of any charges whatsoever. All switches after the second one will be charged at Rs.500, and is subject to a maximum of Rs.1,000.

  3. Premium Redirection Charges:

    Currently, the charges are set at Rs.500, subject to a maximum of Rs.2,000.

  4. Premium Allocation Charges:

    These charges are applied on contributions of gratuity, the maximum premium allocation charge is 0.50% of the initial contribution and 2% of the annual contribution.

  5. Fund Management Charges for Debt and Balanced Fund:
    • Fund size Rs.0 – Rs.9,99,999: 1.10% per annum.
    • Fund size Rs.10,00,000 – Rs.49,99,999: 0.90% per annum.
    • Fund size Rs.50,00,000 – Rs.99,99,999: 0.75% per annum.
    • Fund Size Rs.1,00,00,000 and above: 0.65% per annum.

    The Fund Management Charge is subject to 1.35% of the invested amount.

  6. Mortality Charges:

    These charges are payable annually in order to cover the life coverage benefit of Rs.1,000. This will be quoted based on the employee data received by the employer.

Unit Linked Funds

Debt Fund The primary objective of investments in this fund is to earn regular income by investing in high quality fixed income securities. This fund primarily invests in:
  • Bonds.
  • Fixed income securities issued by government agencies.
  • Fixed income securities issued by corporate issuers.
  • A small portion will be held in the form of money market instruments.
Balanced Fund The primary objective of investments in this fund is to generate capital appreciation and current income through a mixed investment portfolio of equities and fixed income securities. This fund primarily invests in:
  • Listed equities.
  • High quality fixed income securities.
  • Government bonds.
  • Infrastructure bonds.
  • Cash deposits in India.
  • A small portion of these funds will be held in money market instruments.

Investment Fund Application

Asset Class Debt Fund Balanced Fund
Government and Government approved securities 0-90% 0-60%
Corporate bonds rated “AA” or above by any approved rating agency 0-60% 0-60%
Money market and other liquid assets 0-40% 0-40%
Infrastructure sector as defined by the IRDA 0-60% 0-60%
Listed equities Nil. 0-35%

Advantages of PNB MetLife Group Gratuity Plan

  • Option to choose between two unit linked funds – debt fund and balanced fund.
  • Company publishes a statement of accounts once every year.
  • There is also the option of switching between the two funds depending on the investor’s risk appetite.
  • The gratuity contribution can be paid in instalments.
  • Professional assistance is given to you in the legal, tax, and accounting fields.
  • Tax benefits as applicable under prevailing taxation laws.

How The Plan Works

Step 1: Choose between two unit linked funds – debt fund and balanced fund depending on your personal risk appetite and financial goals.

Step 2: Pay premiums annually, regularly.

Step 3: Avail maturity benefits, and in the event of death, dependants get a death benefit.

Riders

  • There are no riders available with this plan.

GST of 18% is applicable on life insurance effective from the 1st of July, 2017

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