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Frequently asked questions

• Can individuals purchase group plans?

  Only formal (employer-employee) and informal (non-employer-employee) groups can purchase ICICI Pru Group Plans. However, ICICI Prudential offers several individual and family plans for you to cover your loved ones.

• Are employees’ family members covered under group plans?

  A Group Plan covers the individuals registered under the group. However, you can add opt-in choices to allow your employees to include parents, children, or an earning spouse in the plan at affordable premiums.

• Can ICICI Pru group policies be customized?

  Yes. ICICI Pru Group Plans are flexible and extendable. They can be customized according to your specific needs. You can also choose opt-ins to allow your employees to increase the sum assured, extend the plan to include loved ones, add health condition-specific benefits, and more at a small added premium.

• What is the minimum and maximum group size for ICICI Pru Group Plans?

  The minimum size for ICICI Pru Group Plans is 5 members. However, each policy may have specific minimum member requirements for formal and non-formal groups.

• Why select a Group Plan?

  Group plans enable employers and group administrators to provide financial coverage to members, at scale. These are suitable for companies and non-corporate groups like trust and NGOs. ICICI Pru Group Plans allow you to choose standardized coverage or a graded protection plan for different sub-groups of employees. Group insurance plans serve as excellent tools to attract and retain employees. Moreover, a sense of being valued and cared for offers peace of mind, which boosts productivity and loyalty.

• How much tax benefits^{^} can the Master Policyholder claim with Group Plans?

  The tax benefits^{^} are subject to the prevailing tax laws.

• Do Group Plans offer surrender/maturity benefits?

  Most group plans do not offer any surrender benefit. However, certain plans, such as those designed for retirement and investment purposes, may offer policy-specific benefits.

• Can ICICI Pru Group Plans be converted to individual plans when the employee leaves the organization?

  A conversion option is not available with all group plans. However, members can migrate to individual insurance after exiting the organization if the option is enabled in the Master Policy.

• What is Gratuity?

  Gratuity is a statutory lumpsum monetary benefit paid by an employer to an employee as a token of appreciation for their long-term service. It is governed by the Payment of Gratuity Act, 1972.

• Who is eligible to receive gratuity?

  An employee becomes eligible for gratuity if they have completed five or more years of continuous service with the same employer and be part of an establishment employing 10 or more people.

  Exceptions: In case of death or disablement, gratuity is payable even if the employee has not completed five years.

• How is gratuity calculated?

  Gratuity is typically calculated using the formula: (Last Drawn Salary × 15 / 26) × Number of Completed Years of Service.

  
  

  "Last Drawn Salary" includes your basic pay and dearness allowance, while 15/26 represents 15 days of wages out of the 26 working days in a month. The "Number of Completed Years of Service" includes any part of a year greater than six months, which is rounded up to the next full year for calculation purposes.

  
  

  Example calculation:

  Last drawn salary (Basic + DA): ₹ 40,000

  Service: 12 years and 10 months – will be rounded to 13 years

  Gratuity: (₹ 40,000 x 15/26) x 13 = ₹ 3,00,000

  
  

  Note:

  Maximum gratuity payable under the Act is currently ₹20 lakhs (as per the latest amendment).

  Employers may choose to pay more, but the legal obligation is capped.

• When is gratuity payable?

  Gratuity becomes payable by the employer to the employee (or their nominee/legal heir) under the following situations, as per the Payment of Gratuity Act, 1972:

  On Retirement or Superannuation – When an employee retires after completing the required years of service.

  On Resignation – If the employee resigns after completing at least 5 years of continuous service.

  On Termination of Employment – If the termination is for reasons other than misconduct, and the employee has completed 5 years of service.

  On Death of the Employee – Payable to the nominee or legal heir, even if the employee had not completed 5 years of service.

  On Permanent Disablement due to Accident or Illness – Payable without the 5-year service condition.

• Is gratuity taxable^{^}?

  Gratuity received by central government employees is exempt from tax as per section 10(10) of Income Tax Act. For non-government employees, gratuity is exempt upto limit prescribed under section 10(10) of Income Tax Act.

• Does a fixed term/contract employee get gratuity?

  Yes, if a contract employee completes five years of continuous service (or in case of death/disablement), they are eligible under the Act.

• What is Superannuation?

  Superannuation is a retirement benefit offered by employers, where contributions are made (by employer, employee, or both) into a superannuation fund. The accumulated amount is paid to the employee at retirement, resignation, or death, depending on the scheme.

• Who is eligible for Superannuation?

  Eligibility for superannuation generally applies to full-time, salaried employees working for organizations that provide such retirement plans as part of their benefits, with specific eligibility often depending on completing a minimum period of service and reaching the employer-set retirement age.

• How much contribution is made towards Superannuation?

  Employers typically contribute up to 15% of basic wages, dearness allowance, and commission (if applicable) to the superannuation fund. Employee contribution is optional and depends on company policy.

• When is the Superannuation benefit payable?

  The superannuation benefit becomes payable under specific circumstances, depending on the employer’s scheme and fund rules. Generally, it is payable in the following cases:

  • On Retirement (Superannuation Age)
  • On Death of the Employee
  • On Permanent Disability
  • On Resignation Before Retirement Age
  • On Termination of Service (other than due to misconduct)
• What are the options to receive Superannuation benefits?

  Here are the common options available to employees to receive superannuation benefits:

  
  

  Lump Sum Withdrawal

  • At the time of retirement, an employee can withdraw a part of the accumulated corpus
  • The commutation is exempt as per Section 10(13) of the Income Tax Act, 1961. (Generally, up to 1/3rd can be commutated as lumpsum if the rest is used to purchase an annuity.)

  
  

  Purchase of Annuity (Pension Plan)

  • The remaining balance (after lump sum withdrawal) is typically used to buy an annuity from an insurer
  • The annuity provides regular monthly/quarterly/annual pension to the employee.
  • Pension received is taxable as salary income.

  
  

  Combination of Lump Sum + Annuity

  • The most common method:
    • 1/3rd tax-free lump sum commutation at retirement.
    • 2/3rd invested in annuity to provide regular pension.

  
  

  In Case of Death/Disability

  • The entire accumulated corpus is paid as a lump sum to the nominee/legal heir or to the employee (if disabled)
  • The refund of contributions is tax-free^{^}.

  
  

  On Early Exit (Before Retirement Age)

  • Options depend on the scheme
    • Transfer to new employer’s approved superannuation fund, OR
    • Withdraw the corpus-Taxable in accordance with the Income Tax Laws
  • Pension/Annuity through an insurance company
  • Lump sum withdrawal (permissible only within certain limits)
  • Combination of lump sum + annuity
• Is Superannuation taxable?

  Yes, superannuation can be taxable, but the tax treatment depends on when and how the benefits are received:

  
  

  Employer’s Contribution (during service)

  • Aggregate amount of Employer’s contribution to an approved superannuation fund, recognised provident fund and NPS is tax-free up to ₹7.5 lakhs per year
  • Any contribution above this limit is treated as a taxable perquisite in the hands of the employee

  Employee’s Contribution (if any)

  • Employee’s own contributions are made from post-tax salary, but they qualify for deduction under Section 80C (within the ₹1.5 lakh overall limit)

  Interest/Returns on the Fund

  • Interest or growth on the superannuation fund is exempt from tax while it accumulates

  
  

  At the Time of Withdrawal (on retirement, resignation, death, or disability)

  • On Retirement/Superannuation Age

    • The commutation is exempt as per Section 10(13) of the Income Tax Act, 1961. (Generally, up to 1/3rd can be commutated as lumpsum if the rest is used to purchase an annuity.)

  • On Death/Disability

    • The refund of contributions. paid to nominee/legal heir or to the employee (in case of disability) is tax-free^{^}

  • On Resignation Before Retirement Age

    • Withdraw the corpus-Taxable in accordance with the Income Tax Laws