Employer-Employee Insurance is a life insurance arrangement where an employer purchases a life insurance policy for the benefit of a key or valued employee. The employer pays the premium and is typically the policyholder, while the employee is the life assured. This setup not only offers financial protection to the employee’s family but also serves as a strategic tool for employee retention, motivation, and long-term reward planning. In many cases, the employer may choose to transfer the policy to the employee upon retirement or after a specified period as part of a loyalty benefit or gratuity.

This insurance arrangement strengthens the bond between employer and employee, enhances workplace morale, and demonstrates a company’s commitment to its people. It is commonly used in privately owned businesses, partnerships, and corporations where skilled personnel play a crucial role in operations and growth. The policy can be customized to align with the company’s goals, and it often comes with tax benefits under prevailing laws.