Worker’s Compensation Death Benefits

WC policy is a type of mandatory insurance that all employers must provide to their employees. Under this policy, the employees are entitled to financial benefits if they suffer any illness, injury, or death at the workplace.

The purpose of this policy is to provide financial security to employees and assist their families in case of their unfortunate death. An employee covered under WC policy receives financial assistance in case of injury, disablement, and death.

Workmen's compensation death benefits are the monetary benefits that are payable in case an employee dies due to a workplace illness or injury. The employer provides compensation to the surviving dependants/family members to support them financially. The coverage includes the following benefits:

• Workers compensation funeral expenses

• Support for the family to ensure financial stability

Workers Compensation Insurance Death Benefits: Inclusions and Exclusions

WC Policy: Inclusion

• Death due to accident or injury at the workplace

Workers Compensation Death Benefit: Exclusion

• Death occurring at a place other than the place of employment.

• Injuries or death occurring due to deliberation or self-inflicted injuries.

• Death due to an accident occurring when the employee is intoxicated

• Death or accidents caused due to war, invasion, etc.

The deceased employees' descendants are entitled to a workcover death payout, which is calculated as per the provisions mentioned in the Workmen Compensation Act, 1923.

Note: The relevant factor is based on the employee's age on their last birthday before the compensation claim is filed. This is listed under Schedule IV of the Workmen’s Compensation Act, 1923.
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Let us consider an example to understand the calculation of the worker's compensation death claim.

Example 1:

An employee aged 56 died due to an accident at his workplace. His salary is ₹12,000. How much is the death compensation payable to his dependents?

Death compensation = 50% x 12,000 x 131.95
= 7,91,700 or 1,20,000, whichever is higher.

Thus, the employee’s dependents are eligible to receive death compensation of ₹7,91,700.

Example 2: An employee 35 years old earns wages of ₹12,000. Let us calculate the death benefit using the death compensation formula.

Death Compensation= 50% x 12000 x 197.06

                                   = ₹11,82,360 or ₹1, 20,000 whichever is higher

Thus, the employee’s family will get a compensation of ₹ 11,82,360.

Note: Though both employees earn the same wage, the younger employee is eligible for higher compensation as the relevant factor is high for younger employees.

-Covers the Expenses: The death benefit provides for the funeral or burial expenses for the employee. Thus, taking the burden off from the deceased’s family members.

-Financial Support for Employee’s Dependents: If the employee dies as a result of an accident at the workplace, a workmen’s compensation death claim provides financial assistance to his dependents, enabling them to carry out their day-to-day expenses.

-Financial Stability: The compensation amount brings financial stability to the life of the employee’s family as they are dependent on his earnings for survival.

Since the employees are a crucial component of any organisation, their well-being and safety are of utmost importance. Thus, a WC policy is necessary to ensure their safety at the workplace. Here are some other reasons why a Workmen's Compensation policy online is needed.

-Supports the Employee: If an employee suffers an injury at the workplace, the compensation received under the WC policy supports him by providing monthly wages till he can resume work.

-Saves the Company from Legal Hassle: Since a WC policy is legally binding, it saves the employer/organisation from legal troubles.

-Death Benefit: Workmen's compensation benefit also includes death cover, which supports the employee’s dependents. The compensation assists them to meet their daily expenses after the employee's death.

-Covers Medical Expenses: If the employee gets injured or ill, the policy takes care of the medical expenses, enabling the employee to receive the best medical attention.

-Assess the Coverage: Organisations must assess the coverage offered by the WC policy. A good policy includes medical cover, death benefit cover, rehabilitation expenses, disability benefits, etc. It is necessary to review the coverage details minutely to ensure you get comprehensive coverage.

-Claim Settlement Process: The claim settlement processes and duration may vary from one provider to another. Opt for a provider who offers a simple claim procedure and has a history of a high claim settlement ratio. It increases the chances of you receiving the claim amount.

-Premium Amount: Another important factor is the policy premium. Choose a policy that strikes the right balance between coverage and premium amount. While you may find plenty of low-cost plans, be wise to opt for an affordable policy with wider coverage.

-Legal Liability Coverage: Before finalising a policy, ensure that it offers protection against legal liabilities. At times, you may have to bear legal expenses if any suit is filed against you for employee injury or death. In such a scenario, the WC policy reimburses the legal fees and related expenses.

Employees are the backbone of the economy and deserve the benefits of WC policy. The unfortunate death of an employee due to a workplace accident or injury can leave their dependents in a financial crunch. Thus, the workcover death payout assists them with monetary compensation.

To fulfil this obligation towards the deceased employee and his dependents, organisations must opt for the right SME insurance. TATA AIG offers business insurance at affordable prices to ensure that employers are able to protect their employees and businesses whether they are a contractor, small business, startup or service provider.

Who are the dependents of the deceased employee?

The dependents include the deceased employee’s widow, legitimate son, unmarried legitimate daughter, widowed mother, other parent, and other relatives, as mentioned in the Act, who are dependent on his earnings.

Which industries are included in the Workmen Compensation Policy?

The following industries are included:

• Manufacturing

• Transportation

• Mining

• Construction

• Plantations

• Factories

• Mechanically propelled vehicles, etc.

What are the other benefits of the WC policy?

Apart from the death benefit, the WC policy also provides the following benefits:

• Accidental injuries

• Work-related illnesses

• Disability benefits

• Temporary disability compensation

• Legal and approved expenses cover