Page 92 - IC23 life insurance application

each year. The said Scheme of the Life Insurance Corporation of India has been

designed to assist the employers to meet with the provisions of these Accounting

Standards. The salient features of the Scheme are as under:

1) The funding will be done under the Cash Accumulation Plan i.e. a Running

Account shall be maintained in respect of the Scheme. All contributions

(excluding Term Insurance Premium) shall be credited to this account and all

claims settled (except Insurance cover) shall be debited to the Running Account.

Interest shall be credited as at 31st March every year at a rate to be declared by

LIC under the Cash Accumulation Plan.

2) A Group Insurance cover of a flat Sum Assured subject to a minimum of

Rs.5000/- and maximum of Rs.25,000/- per employee will be provided.

3) Claims in respect of Leave Encashment shall be settled as per the Rules of the

Scheme on the exit of the employees. Where such exit is due to death of the

employee, an additional amount of Insurance cover shall also be paid to the

nominee of the employee.

VOLUNTARY RETIREMENT SCHEME OF EMPLOYERS (VRS)

In the context of the economic reforms and restructuring of the economy, quite a few

employers have introduced Voluntary Retirement Scheme (VRS) in their

establishments for the benefits of their employees. The need for VRS in the

establishments/industrial units has arisen because of technological changes taking

place to make the operation of the companies viable and competitive.

The VRS benefits to the employees generally provide for payment of annuity

(depending upon the salary and length of service) which ceases at the normal

Copyright Dr Rakesh Agarwal Sashi Publications Private Limited

Sashi Publications Pvt Ltd Call 8443808873/ 8232083010