The death of an employee in the workplace is an unfortunate and traumatising incident for the employer and fellow employees. This kind of loss cannot be compensated; however, with death benefits in labour insurance, the deceased's family can be provided some support.
Knowledge of death benefits under workers' compensation insurance can help employees protect their rights in case such an incident occurs. Moreover, it helps employers understand their responsibilities.
What Is Workers Compensation Insurance?
Workers' compensation insurance is a mandatory policy that employers provide to employees. It provides financial coverage for work-related injuries, illnesses and deaths. The central purpose of this policy is to provide financial support to the employee’s family in case of the employee’s demise.
What are Death Benefits in Workers' Compensation Insurance?
Death benefits under workers compensation insurance are financial benefits that are paid to the family members/nominees in case of an employee’s unfortunate death due to work-related illness or injury.
The monetary benefit is provided to the surviving family members/ nominees so they can support themselves financially. The benefits include funeral expenses, financial stability, and family support.
Inclusions and Exclusions of Death Benefits
Inclusions
Death due to accident or injury at the workplace
Exclusions
● Death or injuries due to self-inflicted injuries
● Employee’s death happening at a place other than the workplace
● Death of employee due to accident while they were intoxicated
● Death occurred due to war, invasion, etc.
Importance of Death Benefits in Workers' Compensation Insurance
Coverage for Expenses
The death benefit under workers' compensation provides for expenses such as funeral arrangements and clearing last hospital bills, reducing the burden on the deceased’s family.
Day-to-Day Financial Support
When an employee dies of injury or accident at the workplace, they leave behind their family, who was dependent on them. By claiming death benefits and financial assistance, the surviving family members can carry out their day-to-day activities smoothly.
Workers Compensation Death Benefit Calculation
The death benefit compensation is provided to the dependent family member/nominee based on a calculation. The provisions for this calculation are mentioned in the Workmen Compensation Act 1923.
Death Compensation= 50% of employee’s monthly salary X relevant factor or ₹ 1,20,000, whichever is
Note: Here, the relevant factor is the deceased employee's last birthday before filing for death benefits compensation.
What Is The Need For Workers Compensation Insurance?
Employees are a fundamental part of any organisation; thus, ensuring their well-being is crucial. Here are the reasons why workers' compensation insurance is required to fulfill this obligation.
Employee Protection
Workers' compensation insurance benefits the employee. It ensures that they are paid fair compensation in case they sustain work-related injuries or illnesses until they are able to resume work.
Avoid Legal Liabilities
Labour insurance is legally binding and mandatory for employers. Complying with its rules saves employers from legal trouble.
Medical Expense Coverage
Workers' compensation insurance also covers medical expenses. It ensures that employees can focus on their recovery and return to the workforce without worrying about medical bills.
Provides Death Benefits
The biggest benefit of having workers' compensation is the death benefit. In the event of an employee’s demise due to work-related injuries or diseases, the insurance provides financial support to dependent family members.
Tips To Choose Right Workers Compensation Insurance
Check the Coverage
It is the most important thing to check the workers' compensation insurance coverage benefits. Employers must choose insurers that provide crucial coverage, such as death benefits, medical expenses, rehabilitation facilities, disability benefits, wage replacement, etc.
Legal Cover
Labour insurance is also required to comply with legal laws and protect employers from legal liabilities. It includes reimbursing the cost of legal processes, documentation, court hearings, lawyer’s fees, etc.
Claim Settlement Procedure
Every insurer has a different claim settlement procedure and period. It is beneficial for employees and employers to choose a policy provider with a simple claim procedure. Moreover, make sure to check the history of the claim settlement ratio; it should be good.
Policy Premium
The last factor to consider before getting labour insurance is the premium price. Do not go for a low-budget, low-coverage policy. Choose the policy that has the appropriate balance of affordable premium and wide coverage.
TATA AIG Workers Compensation Insurance
A fatal injury on work is not something an employer or employee thinks about. But being ready for the worst is always wise, especially if your workers are exposed to accident-prone or hazardous working conditions.
With trusted death benefit features, insurers like TATA AIG workers' compensation policies ensure the employee’s family's safety. They include benefits like funeral expenses and financial support for the dependent family members to live their lives with stability.
