Your company probably has the following life insurance policy in place. In most labor laws around the world, this is a minimum requirement required to be complied by the employer on behalf of their employees. It may be good to learn in general about these policies.
Group Medical Insurance (GM)
An organisation offers a group medical coverage policy to its group of employees. All the members covered under the policy enjoy the same benefits. One of the GMC policy’s significant features is that it allows the employers to customise it as per their organisation’s specific needs. Also, since the risk is spread to many individuals, such policies’ premium is much lesser than individual medical insurance policies.
Typically, the insurance companies calculate the premium for GMC policy based on the following factors: (i) Number of employees covered under the policy (ii) The demographic factors like age of the members, occupation, and income (iii) Add-on purchased (if any)
Generally following benefits are covered by Group Medical Insurance. These can be agreed and customized as per the requirement.
- In-patient Medical Expenses
Covers hospitalisation expenses, including diagnostic tests as per the policy terms - Maternity Medical Expenses
Female employees get maternity coverage for their maternal medical expenses - Out-patient Medical Expenses
The following are considered covered outpatient medical expenses: x-ray examinations and diagnostic laboratory and pathology tests. radiation therapy, surgical dressing, splints, trusses, braces and crutches. - Optical Medical Expenses
- Dental Medical Expenses
Medical Insurance Policy also offers reimbursement for daycare procedures (for specific mentioned illness). Many organisations extend the medical coverage to employees’ families, including spouse and dependant parents. However, employers generally only comply to the minimum requirement of labor laws.
श्रम ऐन २०७४ दफा ५४: औषधि उपचार बीमा गराउनु पर्ने
(१) रोजगारदाताले प्रत्येक श्रमिकको कम्तीमा वार्षिक १००,००० रुपैयाँ बराबरको औषधि उपचार बीमा गराउनु पर्नेछ ।
(२) उपदफा (१) बमोजिमको बीमा गर्दा लाग्ने बीमा शुल्क रोजगारदाताले र श्रमिकले आधाआधा व्यहोर्नु पर्नेछ ।
It is likey that your employer has only insured you to the minimum requirement of labor law i.e. the volume insured per employee is Rs. 100,000. The annual premium for In-Patient Medical Expense Medical Insurance under Group Medical Insurance comes to around Rs. 4,500 per annum. Your employer is entitled to reduce half the premium contribution from your salary. Also, this benefit, i.e. the premium amount is required to be included in employee’s income and taxed accordingly.
Group Personal Accident Insurance (GPA)
GPA insurance policy is a group health insurance plan that provides financial protection to the employees against unexpected events like injuries, accidental death, disability. Whether the employee meets with an accident while on duty or not and whether the incident occurs in the country or abroad, GPA policy covers the hospitalisation expenses. Owing to its extensive coverage, the GPA insurance plan is also known as a 24-hour worldwide accident policy. If the employee meets with an accident that leads to disability or dismemberment of any body part, the insured member gets complete compensation to cover treatment cost as per the policy terms. Accidental death due to sudden or unexpected incidents is covered under the policy. Generally, seperate sums are assured for the
(i) Accidental Death, Dismemberment, Permanent Total Disability,
(ii) Accidental Medical Reimbursement and
(iii) Accidental Weekly Indemnity.
Group Personal Accident Insurance provides a comprehensive coverage for all expenses associated with accidents. In case of the accidental death of the insured, 100% of sum insured is paid to the nominee. 100% of the sum insured is paid in case the insured losses vital limbs. Half of the sum assured is paid out to the insured in case of partial disablement. A certain percentage of the sum assured will be paid to the insured in case of temporary complete disability. Accidental Medical reimbursement will cover the expenses relating to the treatment and as the injury injuries may prevent one from going to work, the Accidental Weekly Indemnity recognizes this and will replace part of this loss income with a cash compensation for temporary disability.
श्रम ऐन २०७४, दफा ५५: दुर्घटना बीमा गराउनु पर्ने
(१) रोजगारदाताले प्रत्येक श्रमिकको जुनसुकै प्रकारको दुर्घटनालाई समेट्ने गरी कम्तीमा ७००,००० रुपैयाँ बराबरको दुर्घटना बीमा गराउनु पर्नेछ ।
(२) उपदफा (१) बमोजिमको बीमाको सम्पूर्ण प्रिमियम रकम रोजगारदाताले व्यहोर्नु पर्नेछ ।
(३) दुर्घटनाबाट कुनै श्रमिकको मृत्यु भएमा वा शारीरिक वा मानसिक रुपले पूर्ण असक्षम भएमा निजले उपदफा (१) बमोजिमको बीमा रकमको शतप्रतिशत रकम त्यस्तो श्रमिक वा निजको प्रचलित कानून बमोजिमको हकवालाले क्षतिपूर्ति बापत पाउनेछ ।
(४) दुर्घटना भई अङ्गभङ्ग वा असक्षम भएकोमा तोकिए बमोजिम असक्षमताको प्रतिशतको आधारमा क्षतिपूर्ति पाउनेछ ।
It is likey that your employer has only insured you to the minimum requirement of labor law i.e. the volume insured per employee is Rs. 700,000 towards Accidental Death, Dismemberment or Permanent Total Disability or Partial Disabilities. The annual premium for Accidental and Dismemberment or Disability Insurance to the mimimum requirement of Labor Act, 2074 comes to around Rs. 1,500 per annum. Your employer is required to contribute the entire premium relating to the minimum contribution. Also, this benefit, i.e. the premium amount is required to be included in employee’s income and taxed accordingly.
Group Life Insurance (GL)
Group life insurance is a type of life insurance in which a single contract covers an entire group of people. Typically, the policy owner is an employer or an entity such as a labor organization, and the policy covers the employees or members of the group. Group life insurance is often provided as part of a complete employee benefit package. In most cases, the cost of group coverage is far less than what the employees or members would pay for a similar amount of individual protection. So if you are offered group life insurance through your employer or another group, you should usually take it, especially if you have no other life insurance or if your personal coverage is inadequate.
As the policy owner, the employer or other entity keeps the actual insurance policy, known as the master contract. All of those who are covered typically receive a certificate of insurance that serves as proof of insurance but is not actually the insurance policy. As with other types of life insurance, group life insurance allows you to choose your beneficiary.
Term insurance is the most common form of group life insurance. Group term life is typically provided in the form of yearly renewable term insurance. When group term insurance is provided through your employer, the employer usually pays for most (and in some cases all) of the premiums. The amount of your coverage is typically equal to one or two times your annual salary.
Labor Laws of Nepal doesn’t require to maintain Group Life Insurance, so if this is being provided by your employer that is an added advantage. It can cost around Rs. 5,000 in premium if the sum assured is around Rs. 1,000,000. Also, this benefit, i.e. the premium amount is required to be included in employee’s income and taxed accordingly.
Critical Illness Insurance (CI)
Critical illness insurance provides additional coverage for medical emergencies like heart attack, stroke, or cancer. Because these emergencies or illnesses often incur greater than average medical costs, these policies pay out cash to help cover those overruns where traditional health insurance may fall short. These policies come at a relatively low cost. However, the instances that they will cover are generally limited to a few illnesses or emergencies.
Labor Laws of Nepal doesn’t require to maintain Critical Illness Insurance, so if this is being provided by your employer that is an added advantage. It can cost around Rs. 1,500 in premium if the sum assured is around Rs. 300,000. Also, this benefit, i.e. the premium amount is required to be included in employee’s income and taxed accordingly.