I am a retired person and would like to get clarification from the HR/insurance companies.
Of late, there are many employees leaving the organization within months due to various factors such as better opportunities, work environment, or as a stopgap until they secure admission for further studies, etc. Many companies promptly facilitate the personnel by opening bank accounts and providing group insurance for their family members.
Is it a necessity? Even if they have bank accounts elsewhere, they are required to open another account. Upon leaving the organization, employees often leave a balance which renders the account as inoperative, incurring penal charges that are squared off later. This constitutes as unearned income.
The same issue applies to insurance premiums collected for a full year. Upon leaving their organization, employees may find it challenging to claim hospitalization expenses even in genuine cases, as the insurance coverage tied to the organization ceases to exist once the employee departs. Insurance companies should refund the premium amount accurately calculated to the respective individual since they possess all necessary details of the insured. It is essential for someone to highlight these shortcomings.
From India, Hyderabad
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Of late, there are many employees leaving the organization within months due to various factors such as better opportunities, work environment, or as a stopgap until they secure admission for further studies, etc. Many companies promptly facilitate the personnel by opening bank accounts and providing group insurance for their family members.
Is it a necessity? Even if they have bank accounts elsewhere, they are required to open another account. Upon leaving the organization, employees often leave a balance which renders the account as inoperative, incurring penal charges that are squared off later. This constitutes as unearned income.
The same issue applies to insurance premiums collected for a full year. Upon leaving their organization, employees may find it challenging to claim hospitalization expenses even in genuine cases, as the insurance coverage tied to the organization ceases to exist once the employee departs. Insurance companies should refund the premium amount accurately calculated to the respective individual since they possess all necessary details of the insured. It is essential for someone to highlight these shortcomings.
From India, Hyderabad
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The opening of bank accounts may be due to the reason that it facilitates the Salary Disbursement Department or Accounts Dept. to credit the salaries into employees' accounts maintained at one branch of a particular bank instead of crediting them to a number of branches in different banks later, posing a lot of reconciliation problems among the company, banks, and employees.
The motive behind the insurance premium is employee benefits. However, you need to inquire with the concerned insurance company whether there is any provision to refund the premium thus far paid after some deduction towards a penalty in case of premature discontinuance.
B. Saikumar
HR & Labour Law Consultant
From India, Mumbai
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1979The motive behind the insurance premium is employee benefits. However, you need to inquire with the concerned insurance company whether there is any provision to refund the premium thus far paid after some deduction towards a penalty in case of premature discontinuance.
B. Saikumar
HR & Labour Law Consultant
From India, Mumbai
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Bank Account Opening Request Letter.docx
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