Gratuity Trust vs. Insurance: How Should Employers Handle Employee Death Benefits?

If the establishment has its own trust for gratuity, is it necessary to have insurance coverage for the employee? For example, in cases of death, can the gratuity be paid up to the date of death or until the employee's retirement age?

Gratuity Entitlement in Case of Death

In the case of death, the representatives of the deceased employee shall be entitled to gratuity based on his service only. Paying service gratuity based on the actual service will satisfy the legal requirements.

Death Cum Gratuity Policy

If you have taken any death cum gratuity policy by paying an additional premium, then the LIC/Insurance company will pay gratuity considering salary and service projected to his retirement age. It is not mandatory that every employer should take that policy, but what is mandatory is to ensure payment of gratuity for the period of actual service only.