An employer can use the life insurance policy as an encouragement for the employee to continue with him since the employer has to spend considerable amount of money and time to train a new employee and moreover upon exit of such an existing employee, the employer may lose an already trained and trust worthy person.
Corporate companies, Big organizations, Institutions, Boards, Trust can insure their employees, workers etc., This would help the employees to trust the employer in a better way. This may also work as an encouragement to work more and grow the organization.
Tax Benefits :
The maturity of the policy will be tax free in the hands of the employee under Section 10(10)(D) of Act, 1961 at the same time the premiums paid by the employer would be considered as expenses of business or profession under Section 37(1) of I.T. Act, 1961.
