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Gratuity linked insurance
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It is for making provision either by LIC or other similar scheme.
LIC calculates the amount of premium payable based upon various factors like the date of joining, age, current salary drawn etc and then the actuarial valuation of the same is done so as to arrive at a figure that would make the fund size such that would be sufficient to meet the obligation of the Company in the event of people leaving the Company during that year. They would not consider the people who have not completed period of 5 years or are not likely to complete the period of 5 years during the period for which the premium is being paid.
In any case, the contribution is given as a lumpsum for the group policy and no amount is assigned to any specific employee for a gratuity policy. The amount is lying with the LIC and there is no loss to the Company.
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