Group Insuranc2

7/31/2019 Group Insuranc2

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GROUP INSURANCE

INTRDUTION:

Group insurance is an insurance that covers a group

of people, usually who are the members of societies, employees of a

common employer, or professionals in a common group.
http://en.wikipedia.org/wiki/Insurancehttp://en.wikipedia.org/wiki/Insurance


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Group coverage can help reduce the problem of

adverse selection by creating a pool of people eligible to purchase

insurance who belong to the group for reasons other than for the

purposes of obtaining insurance. In other words, people belong to the

group not because they possess some high-risk factor which makes

them more apt to purchase insurance (thus increasing adverse

selection); instead they are in the group for reasons unrelated to

insurance, such as all working for a particular employer.

A feature which is sometimes common in group

insurance is that the premium cost on an individual basis may not be

risk-based. Instead it is the same amount for all the insured persons in

the group. So, for example, in the United States, often all employees of

an employer receiving health insurance coverage pay the same

premium amount for the same coverage regardless of their age or other

factors. In contrast, under private individual health insurance coverage

in the U.S., different insured persons will pay different premium

amounts for the same coverage based on their age, location, pre-existing

conditions, etc.

Another distinctive feature is that under group

coverage, a member of the group is generally eligible to purchase or

renew coverage all whilst he or she is a member of the group subject to

certain conditions. Again, using U.S. health coverage as an example,

under group insurance a person will normally remain covered as long

as he or she continues to work for a certain employer and pays the

required insurance premiums, whereas under individual coverage, the
http://en.wikipedia.org/wiki/Adverse_selectionhttp://en.wikipedia.org/wiki/Adverse_selection


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insurance company often has the right to non-renew a person's

individual health insurance policy when the policy is up for renewal,

which it may do if the person's risk profile changes.In Canada group

insurance is usually purchased through larger brokerage firms such as

PACE Consulting because brokers receive better rates than individual

companies or unions.

Group insurance is a health care coverage plan in

which individual employees or members are included under one

'master policy' owned by their employers. Because the group insurance

plan has so many contributors, the policy often provides coverage for

more services at a much lower cost per participant. Group insurance

may be provided by other organizations besides for-profit companies.

Labor unions, churches and other service groups can also obtain group

insurance for recognized members and possibly their dependents.

Individual members of a group insurance plan receive

insurance certificates which demonstrate their eligibility for benefits. If

the master policy held by the employer requires participation in an

HMO (health maintenance organization), then individuals are also

registered as members. Other group insurance policies may be

associated with major medical groups such as Blue Cross/Blue Shield.A major medical policy may or may not restrict an individual's choice of

primary physician and specialists. HMO policies often require a patient

to use a specified physician, who must approve any visits to eligible

specialists.
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Financing for a group insurance policyis commonly a

flexible payroll deduction, although some companies will absorb the

entire cost of the policy as a benefit for employees. As with many

insurance policies, however, the cost of premiums can rise significantly

without warning. If a few participants receive expensive treatments for

serious medical conditions, the rest of the group may have to absorb

the higher premium costs over time. Group insurers don't always

require physical exams before issuing a master policy, so some

participants may benefit from treatments for pre-existing conditions.

1. Single insurance policy or contract that covers groups ofemployees and their dependents.

2. Collection ofindividualswho have regular contactand frequentinteraction, mutual influence, common feeling of camaraderie,

and who worktogether to achieve a common set ofgoals.

3. Subdivision of a set.4. Insurance purchased by a group of persons, such as the

employees of a company, often at a reduced individual rate.
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Group insurance benefits can vary widely from

company to company. Almost all policies cover emergency and routine

medical procedures such as regular doctor's appointments and hospital

treatment for accidents. Most cover extended care in hospitals or

rehabilitation centers. However, group insurance may or may not cover

the employee's spouse or dependents. Some offer assistance for vision

care or dental work, but coverage may be limited to specific

procedures. Mental health needs may also be covered under group

insurance. Prescription drug expenses often fall under group insurance

benefits, but most likely with a co-pay provision. Under a co-pay plan,

the covered individual must pay an established price out-of-pocket for

name brand and generic medications.

Group insurance is definitely more affordable than a

similar number of individual policies, but there are a few drawbacks.

Some members find their choices of physicians and treatments very

limited under an HMO insurance plan. Even major medical plans can

restrict the list of approved physicians, often called the PMD (preferred

medical doctor) policy. Employers who fear large increases in

premiums may take an unusual interest in their employees' private

health issues. Companies may suddenly implement stringent 'no

smoking' policies or strongly encourage other preventative health care
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programs. Some may find this interest in their personal health to be

intrusive.

Group members enjoy numerous advantages that add value to aworkers compensation policy, including:

Cost savings Convenient service Safety programs

If you are an individual State Fund policyholder, consider

converting to a group program at renewal and discover the difference

All group policies receive a 6 percent discount. Because thisgroup discount is combinable with other State Fund discounts,

employers save more on their premiums.

Small employers with low payroll save by paying a reduced groupminimum premium.

Because of a groups mandatory loss-control threshold,employers have an added incentive to create safer workplaces

and decrease their claims costs and experience modifications.

Group policyholders may also benefit from additional claims-management services, such as the Alternative Dispute Resolution

program.


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Trade association programs may provide advice on businessprocedures, legislative advocacy, and necessary forms and

documents. Other group services may include health and dental

plans, legal services, and life insurance.

Many associations perform claims reviews. Close monitoring ofclaims can help resolve them sooner, which can result in reduced

experience modification. As a group member, you receive an additional layer of service

from State Funds staff of group specialists. These resources can

help employers more effectively take advantage of the trusted

core of State Fund services.

Membership gives employers a voice for member feedback aswell as a network for contacts and information.

Group members share a commitment to maintaining a goodsafety record, with selective underwriting review to maintain low

group losses.

Employers get industry-focused safety services that may includethe interpretation of regulations, emergency-care planning, safety

seminars, and a review of workplace accidents and their costs

and trends.


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Must be a current member in good standing of a qualifyingassociation.

Must meet the requirements of having the proper designatedgoverning class code or schedule.

Must meet the group underwriting criteria for the specificassociation.

Association group is the group of individuals or

companies with similar occupations such as dentists, lawyers,

medical doctors etc. The association arranges group insurance

for its member and individual member pays all the premiums.

The master contract exists between the association and the

insurer and individual member receives a certificate detailing

coverage.

:

a) Provide more economical coverage because of mass purchase and

group discounting.

b) Group insurance is arranged by the Association and only requires

payment to enroll.

c) Provide for larger amounts of life insurance and the right to convert

life insurance for each member in the association within 60 days of

termination.

d) Certificate is issued showing coverage.
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e) Coverage may be more comprehensive and premium is lower than

individual insurance.

a) Coverage reduces in later years and premiums can be increased

without notice.

b) The group insurance plan amendments, restrictions or termination

can be effected without input of member.

c) Most contracts contain restrictive clauses and a two-year suicide

clause.d) The master policy is held by the association therefore some member

may consider to opt out with an individual policy if they consider that is

the best solution.

e) Contract and coverages are negotiated between association and

insurance company. Member of association has to no say to it.


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If your company offered you to become a member of their group

insurance then this may be the one of the best news which ever came

your way. It is not only a golden opportunity to save money for your

future medical expenses but it will also guarantee that you will have less

worries in case any accidental health events happen to your life.

One of the major advantages of group health insurance over

individual health insurance is the cost. Everyone needs to have a health

insurance so they will have a guaranteed savings in the future.

Unfortunately, not all of us have the financial resources to purchase an

individual health insurance because of the high rate of premiums it

charges to its applicants. Thankfully, group health insurance will

provide you the basic services offered by individual health insurancewith lesser amount of premium. At times, your company may even take

the initiative to pay the premium for you in exchange of the wonderful

service you are providing the company or if not the entire payment,

portion of it.


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:

One of the common problems experienced by applicants of health

insurance is the process of underwriting. Although some of them have

enough resources to pay the premiums offered by a particular

insurance company, they are still being denied by these surety

companies because of their medical condition (although it is illegal to

deny any application for life insurance of any individual, unless in cases

of fraud and misinformation). With group life insurance, you never

have to worry about it because you will not be assessed individually

rather you will be evaluated based on the performance of the group,

particularly the performance of the company where you belong to.

:

Group health insurance policies are almost always offered by all

employers to their employees. By law, it is the role of the employer to

provide health insurance policies to their employees and the most

economical way to do this is through group health insurance

companies. There is nothing to choose from because the company has

done the choosing for you. The only choosing which will be laid on

your shoulder is to accept or deny the offer. Of course, there is no

reason why you should even deny a group health insurance policy

offered by your company!


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:

Another exclusive feature of group health insurance policies is the

Consolidated Omnibus Budget Reconciliation Act (COBRA) program.

This program allows employees to continue with their group policies

even after leaving your job at the company. COBRA program even

allows employee to get up to 18 months of their health insurance plans

after they have left the company. But of course, the payment of your

premium will not be shouldered by the company instead you are the

one who will pay the monthly or yearly premium of your group health

insurance policy. This is perfect especially if you are in the middle of a

medical crisis before you left the company.


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The life insurance coverage provided by most group plans is one-year

term. The plan comes up for renewal each year, and both the insurance

company and the employer have the opportunity to consider whether

to continue it. For the insurance company, it is also an opportunity to

revise the rates. The employer is the policyholder and each covered

individual is issued a certificate showing his or her certificate number.

Some group plans include cash value insurance as an option. For

example, some employers offer group universal life, which the

employee can purchase by salary deduction.


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Some companies offer individual (non-group) insurance policies

purchased at the place of employment. A representative of the

company that provides the group insurance coverage is often available

at the worksite to answer questions about the group coverage as well as

review other family coverage. Additional personal insurance to fill gaps

in insurance protection can be purchased at the employees option.

Other types of insurance include business-related plans such as split

dollar insurance where individual policies are purchased. Typically, theemployer pays the premiums, with the benefits to be split between the

employee and the employer.

Group life insurance is a type of life insurance where a single contract

(master plan policy) covers and entire group of people. The employer,

or entity such as a labor union, is the policyholder and the employees

or members of the group are the ones who are covered by the group

policy. Such coverage is often part of an employee benefits package,

with the employer picking up the tab. There are three basic types ofgroup life insurance: group term life, group universal life and variable

group universal life.


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1. GROUP TERM LIFE:

A type of insurance coverage offered to a group of

people. This coverage will provide a benefit to the beneficiaries if the

covered individual dies during the defined covered period. As with

other types of group benefits, group term life insurance is generally

cheaper than comparable individual policy coverage. For this reason,

group term life insurance is often a key component in employee benefitpackages.

The most common form of group life insurance is

group term life. This is typically provided to the employees by the

employer in the form of a one year annually renewable term insurance

policy. Upon renewal, both the insurance company and the employer

can determine whether or not to continue. Rates can also increaseupon policy renewal.

Costs of the policy are mostly or totally paid for by the employer.

Typical coverage amount for group term life policies is equal to 1 or 2

times the employees annual salary. Often, additional coverage in larger

amounts than the master contract) can be purchased by the

employee via payroll deductions.


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Group term life itself has three types: basic group term life,

supplemental group term life, and portable term life.

Basic group term life This is the most typical coverage, providing

basic coverage and often paid for by the employer. The premiums (up

to $50,000) paid for by the employer are considered to be an employee

income tax-free benefit.

Supplemental group term life Often offered by employers in

conjunction with a basic group term life policy, this type of coverageprovides the flexibility for the employee to purchase additional

amounts of coverage. The employee chooses the type and amount of

coverage to suit personal needs and circumstances and pays the cost for

the premiums.

Portable term life Employees who lose the employers group

eligibility (they either leave the group or retire) can take this coverage

with them continue their insurance protection generally until they reach

age 70. They make their payments directly to the insurer, many times

available through electronic funds transfer.


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2. GROUP UNIVERSAL LIFE:

This type of group life insurance policy combines the benefits of term

life and whole life insurance. You can choose to only pay the life

insurance premium or also make payments that build cash value (above

the cost of the premium). The advantages include affordable group

insurance rates and simplified underwriting, along with the potential for

cash accumulation and portability. Features of this type of groupinsurance include: group buying power resulting in more affordable

premiums, optional cash value account, coverage that can be extended

to age 100, and dependent coverage thats generally available as a rider.

3. VARIABLE GROUP UNIVERSAL LIFE:

Often used in executive benefit plans or as to fund retiree life

insurance, variable group universal life provides flexible life insurance, a

guaranteed account, and optional sub-account investment choices.

Features include: affordable premiums due to group buying power,

investment option (for tax-deferred accumulation), coverage that can be

extended to age 99, optional dependent coverage available as a rider,

and investment account options (that cover a wide range of investment

styles and risks). This type of group life insurance has expenses and

fees such as mortality and expense charges, fund expenses,

management and distribution fees.


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Group Insurance Scheme is life insurance protection to groups of

people. This scheme is ideal for employers, associations, societies etc.

and allows you to enjoy group benefits at really low costs.

Group (term) Insurance Scheme is meant to provide life

insurance protection to groups of people. Administration of the scheme

is on group basis and cost is low. Under Group (Term) InsuranceScheme, life insurance cover is allowed to all the members of a group

subject to some simple insurability conditions without insisting upon

any medical evidence. Scheme offers covers only on death and there is

no maturity value at the end of the term.


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Group (Term) Insurance Scheme is at present offered under One Year

Renewable Group term assurance plan (OYRGTA). Every year on

Annual Renewal date LIC charges the premium depending upon the

changes in size and age distribution of the age group.

:

Group (term) Insurance Scheme has a number of varieties . The

Scheme may provide for a uniform cover to all members of the group

or graded covers for different categories of members, cover for all

amounts of outstanding housing loans or vehicle advances, or some

other benefits (e.g., life cover to supplement pension or PF benefits in

case of death). The schemes may have add-ons like Double Accident

Benefit,Critical Illness Benefit, Disability benefit etc.

The premium under such scheme may be wholly

paid by the employer or the Nodal Agency. However, the

scheme may be contributory i.e. the members may also

contribute.


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2.Double Accident Benefit, i.e. payment of double

the sum assured on death due to accident (without permanent

disability benefit), may be allowed under Group Insurance

Schemes for an extra premium.

3.For Group Insurance Scheme in lieu of EDLIS the

insurability condition is that should be a member of the

Provident Fund Scheme of the employer. For other GI Schemes

of employer-employee groups the insurability condition is that

the member should not be absent on ground of sickness on the

entry date. For all non-employer-employee Group Schemes the

basic insurability condition is that the member should be in good

health on the date of entry.

4. At the commencement and thereafter on each

Annual Renewal Date, the Group Policyholder will have to send

all the member's data (and particulars of the new entrants from

time to time) to the P & GS unit of LIC. Detailed OYRGTA

premium calculation will be made on each Annual Renewal

Date.


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What is EDLI?

All employees to whom the Employee's Provident

Fund and Miscellaneous Provision Act , 1952 applies, have a

Statutory liability to subscribe to Employee's Deposit Linked

Insurance Scheme, 1976 to provide for the benefit of Life insurance to

all their employees. Under the scheme as amended with effect from

24th June,2000 the insurance benefit is equal to the average balance to

the credit of the deceased employee in the Provident Fund during the

last 12 months, provided that where such balance exceeds Rs.35,000,

insurance cover would be equal to Rs.35,000 plus 25% of the amount

in excess of Rs.35,000 subject to a maximum of Rs.60,000. Thus if

the lenth of service is not adequate and/ or the salary is low the

average balance may be substantially less and such the benefit to the


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employee's family is either inadequate or non-existent.

The contribution @ 0.50% of each employee's salary is payable by the

Employer to the Provident Fund Authorities.

However, under Sec. 17(2A) of the act, the employer may be exempted

from contributing to this scheme, if he/she has provided for better

insurance benefits through alternative scheme. LIC's Group Insurance

Scheme in lieu of EDLI has been accepted as one such better

alternative.

1. The premium payable by the employer is usually less than thetotal contribution being paid by the employer to R.P.F.C;

particularly when the salary level is high and average age of the

group is low.

2. Settlement of claim is quicker, LIC requires only the deathcertificate and the Claim Form from the employer.

3. Premium paid by the employer is treated as normal businessexpenses for Income-Tax purpose.


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Each employee is covered for a sum assured ranging

between 5,000 to 2,00,000 depending upon the current salary and

service put in from day one irrespective of the actual balance in the

Provident Fund. Alternatively every employee/ worker can be covered

for a uniform sum assured which will be decided depending upon

the group size.

Double accident benefit can be allowed to the extent of the Sum

Assured for an extra Premium.

1. Put up notice for the knowledge of the employees that you aregoing in for LIC's Scheme in lieu of EDLI.

2.Apply to the Regional Provident Fund Commissioner underSec.17 (2A) of the E.P.F. and M.P. Act 1952 to exempt you

from EDLI Scheme. The application should be accompanied by

the prescribed requirements including the Rules of the Proposed

Group Insurance scheme. Central PF Commissioner, hasauthorized the R.P.F.C. to grant exemption from the 1st of the

month in which the application for relaxation is submitted. LIC

also offers necessary guidance to the employers for seeking

relaxation.


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Life Insurance Corporation of India offers its Group

Gratuity Cash Accumulation scheme to enable employers to meet their

gratuity liability in a very simple and efficient manner. The scheme is

formulated in compliance with Part C of the IV schedule of Income

Tax Act and tax benefits are available as provided in Income Tax rules

Fund management under interest accumulation system Claim settlement on exit as per company rules/gratuity act Built in Insurance arrangement for the employees for future

service

MIS related to Income Tax and trusts accounts and Actuarialvaluation


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:

Liability on account of gratuity experiences sharp increase

every year due to its nature of its computation. Apart from increase inservice, increase in salary also contributes to increase in liability

substantially as the benefits are payable on last drawn salary. Hence

funds have to be invested in a conservative way with a consistent growth

and insulated from market risks

The unique advantage with LIC is the contributions

made by the company and interests credited by LIC are irreversible.

This ensures highest level of safety for the total corpus and consistency

in future contributions. As the gratuity payments are statutory and LIC

gratuity scheme being the only investment tool which enjoys sovereign

guarantee, gives a greater comfort to employer.

Liquidity: Funds available with LIC is a single account for

investment and claim settlement. Hence 100% liquidity is ensured for

the purpose of claim settlement

Yield: LIC has been offering very competitive and consistent

interest rates over the years. For the year 2009-10, LIC has offered

9.00% - 9.65% depending on fund size. The interest declared is net of

administrative expenses incurred, hence no separate charges are

charged after crediting the interest.

Interest rate offered by LIC is on daily balancing method.

Hence, there is no idle time for earning interest, hence effective rate of


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interest is much higher. Another significant aspect is interest gets

compounded annually, hence no reinvestment issues and no time lags.

No responsibility on trustees on Investment decisions: Trusteesare free from all investment risks and hassles in cash accumulation

system. Advantage of real outsourcing can be derived by associating

with LIC

No hidden charges: The scheme is focused on a long term

association in compliance with investment regulations and statutory

payment obligations and no charges are levied on the transactions for

which the fund is meant for.

Funding can also be in a staggered pattern during the year, but

no charges at entry level for any number of payments. No charges on

withdrawals for resignation or retirement or death. Total corpus

comprising of money contributed by the company and interest credited

by LIC is available for claim settlement up to 100% subject to

availability of funds.

Actuarial recommendations: On annual basis, LIC provides this

information to the trustees and recommends the level of contributions.

Claim settlement: On the exit of an employee due to retirement /

death/ resignation, trust may prefer a claim from LIC by sending a

claim form. Claim amount will be made available to trustees. Trustees

can have the following options

Preferring a claim from LIC and paying to employee


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Paying the money to employees and seek reimbursement Paying claims to employees at their end and seeking annual

reimbursement

MIS: LIC provides statement of receipts and payments and

actuarial valuation certificate and certificate of balance for the trust

account.

Besides the above said advantages, the scheme also provides for

employee welfare measures with built in insurance cover.

Insurance cover for future service gratuity

Another salient feature of the Gratuity Scheme with LIC is that it

provides for insurance coverage to the employees to the tune of future

service gratuity subject to certain limits. The insurance cover can be

flexible depending on the requirements of the Trust. The Group

Insurance premium will be commensurate to the cover provided.

Income Tax Benefit on Insurance Premium

The insurance premium paid towards the above said benefits is treated

as deductible business expenses to the company.

The premium is not treated as perks in the hands of the employees.


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An organization today, has not only to man the various

positions with competent and trained personnel but also has to create

an environment wherein they can give their best and derive a sense of

well-being, a sense of fulfillment and security and take pride in their

continued association with the organization. Provision of pension may

be an attraction for such persons to continue in the organization and

give their best to the organization, as with continuous improvement in

longevity a regular income even after retirement has become a

necessity. To provide the pension benefits to employees, an employer

has two alternatives under the provisions of Rule 89 of Income Tax

Rules 1962.


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pg. 30

1. Create a privately managed trust fund and as and when amember retires, purchase annuity from LIC to provide pension

for such retiring member.

2. Entrust the Management of the Pension Fund to an Insurer bypurchasing its Group Superannuation Scheme.

The LIC managed Pension fund has the following added and distinct

advantages:-

1.An attractive and competitive yield on the fund will be creditedto Fund A/c.

2. The problem of liquidity gets automatically eliminated as soon asthe fund is managed by LIC.

3.We conduct free actuarial valuations of the funds administeredby us from time to time.

4. The Administration of the fund is carried out by us in a scientificmanner and claims are promptly settled.

5. Group Insurance in conjunction with the Group SuperannuationScheme can be taken by an Organization to provide for an

attractive lump sum payment on the unfortunate death of a

member while in service, at very nominal cost.


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pg. 31

The employer contributes a certain fixed percentage of salary of each

member. Such Contributions are accumulated by LIC and theaccumulated amount is utilized to provide various benefits as

mentioned below.

On Retirement of a member, the corpus (contributions plus

interest) is utilized to provide the pension as per his

choice.

The Pension is payable on the life of the beneficiary. Corpus is

utilized towards the payment of pension of the type the beneficiary may

opt and the benefit so received is tax free. A lump sum payable by way

of death besides the pension, if the employer has taken Group

Insurance Scheme in conjunction with the Group Superannuation

Scheme.

He can get the equitable interest transferred to the

Superannuation Scheme of the new employer or opt for immediate or

deferred pension.


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pg. 32

1. Life Pension ceasing at death.2. Life Pension with Return of Capital and Group Pension

Terminal Bonus on death.

3. Life Pension guaranteed for 5,10,15 or 20 years and lifethereafter.

4.Joint Life Pension payable on the last survivor of the employeeand spouse.

5.Joint Life Pension payable to the last survivor of the employeeand spouse with return of capital on the death of the last

survivor. If desired , 1/3rd of the pension can be commuted at

vesting.

It is not obligatory or statutory on the part of the employer to provide

for pension to all employees. It is entirely upto him to decide to which

class/ classes of employees he desires to extends the scheme. The

eligibility conditions may be defined on the basis of designation or

salary. (However, after the categories are specified, employer cannot

discriminate between the employees and thus extends the scheme

uniformly).


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pg. 33

The maximum annual contribution that an employer can make to the

Pension Fund and Provident Fund is restricted by the Income Tax

Provisions to 27% of the annual salary (basic plus D.A.) The annual

contributions are treated as deductible business expenses.

Mostly the employer contributes, but is so desired, both the employer

and the employees may contribute, in which case the scheme is called a

Contributory Pension Fund Scheme.

The provisions relating to the approved Superannuation Scheme are

set out in Part 'B' of the Fourth Scheme of the Income-Tax Act, 1961

and Part XIII of the Income Tax Rules , 1962. The income tax

concession will be available only if the scheme is approved by the CIT.

1. The annual contribution is treated as a deductible businessexpense in term of Section 36(1) (iv) of the I.T. Act.

2. In terms of a Notification issued by the Central Board of DirectTaxes .80% of the contribution (s) towards the past service

liability are treated as deductible business expenses spread over

in the subsequent years of payment.

3. The employee's contribution , in the case of the Contributionsscheme qualifies for exemption under Section 80C of the

Income-Tax Act.


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35/75

pg. 35

adequate insurance protection. Their need for insurance protection

during service coupled with adequate savings for carefree retired life

remains unfulfilled. Keeping this in mind, LIC has come out with an

attractive insurance scheme viz. Group Savings Linked Insurance

scheme at a very low cost. Central Government has a similar scheme

with minor modifications. Semi-Government Organizations, Public

Sector Organizations and also Large private business houses and

industrial enterprises have introduced this scheme, the salient features

of which are as under:

Protection at low cost without individual evidence of health.

Attractive returns on savings to meet post retirement needs.

Simple procedures for granting life cover to large groups underone umbrella.

II) INTRODUCTION OF THE SCHEME:

a) The Scheme can be introduced by employers provided certain

percentage of employees is willing to join the Scheme.

b) For the new entrants to the Company, the membership of the

Scheme is compulsory.


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pg. 36

It is decided on the basis of Group size and the occupation of

the group.Premium has two components i.e. Risk Premium and

Savings Premium.Risk Premium is utilized to offer life cover and the

Savings Premium is accumulated in members account.

Double accident benefit can be allowed to the extent of the

Sum Assured for an extra Premium.

The present rate of interest allowed on saving portion of

premium is 8% compounding yearly.

Any employee irrespective of his present state of health is

eligible to join the scheme subject to certain conditions. The only

insurability condition is that the employee should not be absent on

medical ground on the date of commencement of the scheme. All

employees who have not crossed the retirement age are eligible to join

the scheme. All future employees have to join the scheme

compulsorily.


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pg. 37

VII) TAX BENEFITS:

Employees' total contribution, savings as well as risk premium is

entitled for income-tax rebate under Sec. 80C of the Income Tax Act.The entire claim amount including interest earned payable on

retirement or leaving service or on death is free from income-tax. The

premium paid by the employer towards insurance cover is treated as

business expenses.


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pg. 38

Many employers are providing Leave Encashment benefit in addition

to other retirement benefits to their employees which is a lumpsum

amount payable to the employees or their dependants on retirement,

death, disablement, voluntary retirement etc.

End-of-the-year leave encashment facility available to

employees, can be a huge liability to the company. So can be Medical

Leave Encashment, if provided for. To meet this need of entrepreneurs

and businesses, LIC has introduced Group Leave Encashment

Scheme. Just pay a yearly premium, fund your leave encashment

liability and let LIC take care of your worries.

The amount depends upon the leave to the credit of the

employee and his/ her salary at the time of exit. Liability is of increasing

nature as it is linked with salary as well as leave position.

As per the amended section 209 (3) of the Company's Act

1956 and Accounting Standard (AS-15) dated January, 1995, the

employers have to account for the liability in respect of leave

encashment facility, if any, available to the employees and to provide

for the same in their Annual Accounts. It is, therefore, necessary for thecompanies to ascertain liability in respect of Leave Encashment

facilities, if any, available to the employees and provide for the same in

the books of accounts every year. It helps the employers in ascertaining

the true cost of their products and services.


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pg. 39

Group Leave Encashment Schemes (GLES) of LIC helps the

employers in funding of their lave encashment liability. The salient

features of the scheme are as follows:-

1. The Company will submit the employees' data and rules forLeave Encashment. LIC will make actuarial valuation and find

out the funding requirements which shall be quoted to the

company. The company will contribute as per the advice of LIC.

2.A uniform life cover per employee or graded cover will beprovided under One Year Renewable Group Term Assurance

Plan of LIC. A small term insurance premium will be charged in

addition to contributions for funding.

3.A Running Account will be maintained under the scheme andthe contributions (excluding term assurance premium) will be

credited to this account and all claims except term assurance

cover will be settled out of the Running Account. Interest at the

rate declared by LIC from time to time will be credited to the

Running Account at the end of the financial year.

1. On the exit of an employee or encashment of leaves during theservice the Leave Encashment amount will be paid from the

Fund of the scheme maintained with LIC.


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pg. 40

2. On the death of an employee, in addition to his / her leaveencashment benefit, his/her family will be entitled to the amount

of Insurance Cover, which will be tax-free.

3. The Life Insurance Corporation of India will do the ActuarialValuation and will provide necessary certificate as per AS-15.

4. The amount of Term Insurance Premium paid for LifeInsurance Cover will be treated as business expenses.

1.Age (nearer Birthday) at entry of the member into the Scheme.2. Outstanding loan amount at entry date.3. Term of loan.4. Schedule of repayment.5. Rate of interest with which the loan was availed.

Any borrower may become member of this scheme . The minimum

term of assurance is 3 years. Existing Borrowers can join the scheme

with certain conditions within 6 months of the commencement of

scheme.

In case of death of the member during the coverage period ,life cover

on the anniversary date preceding the date of death is payable .The

claim proceeds are used to square off the outstanding loan.


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pg. 41

Critical Illness product (accelerated benefit) is basically offered as an

optional Rider benefit to all Employer-Employee group policyholders

(both existing and new schemes) along with Group term insurance

schemes i.e. OYRGTA ( One year renewal group term assurance ) type

schemes. Schemes along with which the rider can be given shall include

Group insurance, Group Gratuity (CA), Group Leave Encashment and

Group insurance in conjunction with Superannuation. The Benefit will

not be extended to spouses or dependants. Only full time permanent

employees who are actively at work will be eligible for Critical Illness

cover. The relevant premium is to be paid by the Group Policyholder.


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pg. 42

1. The Group critical illness rider benefit to employees isgiven as an add on benefit to the Group policy which has

an element of life cover.

2. The Group Critical Illness rider allowable for eachmember shall be a minimum of 20 % of sum assured

under the base plan and shall not exceed 100% of the sum

assured under the base plan subject to minimum of Rs. 50

Thousands and maximum of Rs 20 lac per member.

3.All members of the attached policy should participate atinception and all eligible new members should

compulsorily participate.

4. The diseases covered under the rider (subject to certainexclusions) are:

1. Cancer 2. Coronary Artery (Bye pass) Surgery 3. Heart attack(Myocardial infarction) 4. Stroke

2. Kidney failure (End stage renal disease) 6. Aorta (Surgery ofAorta) 7. Heart valve replacement

3. Major Burns.


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pg. 43

1. The Critical Illness Accelerated benefit is payable uponthe first incidence of any of the 8 specified diseases and

evidenced as per the diagnostic criteria specified. The

rider shall terminate on payment of the Critical Illness

benefit.

2. The Group Critical illness (Accelerated) Benefit pays alump sum amount as a percentage of Sum assured out of

the Sum assured under the life cover in the event of

occurrence of 8 diseases covered under the rider.

3. No Critical Illness Benefit shall become payable to amember if the disease occurs within days of the start of

the coverage for that member of the scheme. This period

of 90 days shall be called Waitingperiod.

4. In case of death nothing is payable under this rider.However, under the base plan (i.e., the scheme on which

the rider is opted for) benefits as under shall become

payable :

1. A benefit equal to base sum assured if no critical illness benefit is

payable or has been paid earlier.

2. If critical illness benefit is payable or already paid, the benefit is

reduced by the amount of critical illness benefit payable or already

paid. In other words, the difference between the base sum assured and

the critical illness benefit already paid is payable on death.


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pg. 44

1. Diseases in the presence of an HIV infection.2. Diseases that have previously occurred in the life of the member

of the scheme i.e. the benefit is payable only if the disease is a

first incidence , regardless of whether the earlier incidence

occurred before the individual was covered or whether the

insured was covered by us or another insurer.

3.Any disease occurring within days of the start of the coveragefor each member of the scheme. (I.e. during the period).

4. No payment will be made for any claim directly or indirectlycaused by, based on, arising out of, or howsoever, to any Critical

Illness for which care, treatment, or advice was recommended by

or received from a Physician, or which first manifested itself or

was contracted before the start of the policy period, or for which

claim has or could have been made under any earlier policy.

5.Any congenital condition.6.Alcohol or solvent abuse or taking of drugs, narcotics or

psychotropic substances unless taken in accordance with the

lawful directions and prescription of a registered medical

practitioner.

7. Failure to seek or follow medical advice.8.War, invasion, act of foreign enemy, hostilities(whether war be

declared or not),armed or unarmed truce, civil war ,mutiny,

rebellion, revolution, insurrection, military or usurped power,

riot or civil commotion, strikes.


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pg. 45

9. Taking part in any naval, military or air force operation duringpeace time.

10.Participation by the member of the scheme in any flying activity,except as a bona fide, fare-paying passenger of a recognised

airline on regular routes and on a scheduled timetable.

Additional exclusions may be disease-specific and would be

incorporated into the definition of the disease.

1.All benefits under the policy are also subject to the Tax Lawsand other financial enactments as they exist from tome to time.

2. The premium payable are exempted under section 80D ofIncome Tax act.


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pg. 46

Group health insurance makes individual coverages available

on a group basis. A primary advantage is the purchasing power of the

group that achieves reduced acquisition costs for the insurance

company. The insurance company is then able to reduce the rate it

charges to provide insurance for each individual member of the group.

The Group is in a better position to bargain with the insurance

company for additional benefits for its members. There are a variety of

types of group health insurance plans, the major distinctions being the

mechanism used for purchasing the insurance. Common varieties of

group health insurance plans include:

1. Fully Insured Employer Group - The employer contracts directly

with the insurance company to provide certificates to covered

employees. Typical arrangement is either for major medical or health


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pg. 47

maintenance organization (HMO) coverages.

2. Small Employer Group - Insurance companies group certain

industries together and then gather small employers together to form a

larger group. These groupings enable the insurance company to better

predict the cost of providing the insurance. The small employers can

then get coverages otherwise not available unless charged a much

higher rate. All the small employers get the same policy without

deviation.

3. Large Employer Group - same as a fully insured employer group

with direct contract between the insurance company and the employer

to provide individual certificates to covered employees.

4. Health Maintenance Organization (HMO) - a group program under

which the organization provides a full range of medical services to

participants. Participants are either assigned or select from a group of

general practitioners, who then refer their patients to specialists when

the need arises. Good generalized system of providing medical care

which is marked by curtailment in selection by the individual

participant of the health care provider who render services. Individualparticipants insured by an HMO are called

enrollees.

5. Self-Funded ERISA - available to large groups. The group contracts

with an insurance company or third-party administrator to handle the

paperwork. The group pays for all costs associated with the operation

of the insurance plan itself, along with the added cost for

administration.

6. Association Group - similar to a fully insured employer group, the


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pg. 48

distinction being that instead of an employer, it is a different type of

group, such as a credit card company offering insurance as a benefit to

its cardholders or a church group offering insurance to its

parishioners.

7. Group Managed Care - a long-term health insurance plan offered

through the group or association.

8. Preferred Provider Organization another kind of health care

network (doctors, hospitals, and other health care providers) that

contracts with health insurance companies.

Health insurance coverage for an individual can be quite

expensive. Many employers offer health insurance coverage to full-time
http://www.ehow.com/health/http://www.ehow.com/health/


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pg. 49

employees as a benefit of employment knowing that individual coverage

would be far too expensive otherwise. Employers and other

organizations are able to achieve lower monthly premiums through

contracts with insurance companies because they provide large groups

of customers. There are several group plans used for this goal.

Large employers contract with a single national health

insurance company to provide coverage for employees. Each employee

receives coverage based on certain criteria such as length of

employment and hours worked and cannot generally be turned down

for pre-existing conditions due to contractual obligations between the

employer and insurer. Employees have ways to tailor coverage to meet

specific needs such as buying into a dental or eye plan option along

with choosing deductible rates and coverage limits.

A small employer's group is an insurance plan to cover

groups of employees from multiple employers within the same

industry. This enables insurance companies to get a better feel for the

liability issues within certain industries, according to insurance

information website Free Advice. It also allows small businesses the

opportunity to provide insurance for employees that would otherwise

only be available at higher monthly premiums. Unlike large group

health plans, the coverage choice for employees in small employer
http://www.ehow.com/business/http://www.ehow.com/business/


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pg. 50

health plans is uniform throughout with everyone getting the same

coverage.

Health Maintenance Organizations, or HMO's, are

contracted by large employers to provide a full array of health options

for employees. Those insured through an HMO are assigned specific

doctors they are required to visit in order for medical expenses to be

covered. They may choose from a roster of approved

doctors/physicians. A referral from an HMO-approved doctor is

generally required in order to see a specialist when the need arises.

A health association group is not insurance through an

employer or directly through a health insurance provider, but rather

through a third party such as a credit card company or special interestgroup. In order to participate in these group plans, you must be a

member of the organization offering the plan. Spouses and dependents

are sometimes eligible for these health insurance plans, but you should

check with the specific plan to see if these people can be added.


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pg. 51

The Farmers Insurance Group of Companies is a personal lines

property and casualty insurance group providing homeowners

insurance, auto insurance, life insurance, and financial services in the

United States. It is the third largest insurance group in the US servicing

over 10 million households in 41 states.[5] Farmers Group Inc. is

headquartered in Los Angeles, Californiabut is 100% owned by Zurich

Financial Services based in Zurich, Switzerland.

Farmers Insurance Group of Companies is composed of a holding

company and the various underwriters, reciprocal inter-insurance

exchanges, and smaller companies associated with it.

Farmers Group, Inc. is the holding company and providesinsurance management services. It acts under the dba Farmers

Underwriters Association. Together with its wholly owned

subsidiaries, Truck Underwriters Association and Fire

Underwriters Association, they act as the attorneys-in-fact for

three reciprocal inter-insurance exchanges Farmers Insurance

Exchange, Truck Insurance Exchange, and Fire Insurance

Exchange. However, the Farmers Group, Inc. management

company is not an owner of these reciprocal inter-insurance

exchanges.[5] The exchanges own several other insurance
http://en.wikipedia.org/wiki/Property_insurancehttp://en.wikipedia.org/wiki/Casualty_insurancehttp://en.wikipedia.org/wiki/Farmers_Insurance_Group#cite_note-Farmers_Our_Company-4http://en.wikipedia.org/wiki/Farmers_Insurance_Group#cite_note-Farmers_Our_Company-4http://en.wikipedia.org/wiki/Farmers_Insurance_Group#cite_note-Farmers_Our_Company-4http://en.wikipedia.org/wiki/Los_Angeles,_Californiahttp://en.wikipedia.org/wiki/Underwritershttp://en.wikipedia.org/wiki/Reciprocal_inter-insurance_exchangehttp://en.wikipedia.org/wiki/Reciprocal_inter-insurance_exchangehttp://en.wikipedia.org/wiki/Doing_business_ashttp://en.wikipedia.org/wiki/Attorney-in-facthttp://en.wikipedia.org/wiki/Farmers_Insurance_Group#cite_note-Farmers_Our_Company-4http://en.wikipedia.org/wiki/Farmers_Insurance_Group#cite_note-Farmers_Our_Company-4http://en.wikipedia.org/wiki/Farmers_Insurance_Group#cite_note-Farmers_Our_Company-4http://en.wikipedia.org/wiki/Farmers_Insurance_Group#cite_note-Farmers_Our_Company-4http://en.wikipedia.org/wiki/Attorney-in-facthttp://en.wikipedia.org/wiki/Doing_business_ashttp://en.wikipedia.org/wiki/Reciprocal_inter-insurance_exchangehttp://en.wikipedia.org/wiki/Reciprocal_inter-insurance_exchangehttp://en.wikipedia.org/wiki/Underwritershttp://en.wikipedia.org/wiki/Los_Angeles,_Californiahttp://en.wikipedia.org/wiki/Farmers_Insurance_Group#cite_note-Farmers_Our_Company-4http://en.wikipedia.org/wiki/Casualty_insurancehttp://en.wikipedia.org/wiki/Property_insurance


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pg. 52

companies and insurance holding companies, including Mid-

Century Insurance Company, Foremost Insurance Company,

and Bristol West Insurance Group, as well as Farmers Financial

Solutions, LLC, a registered broker-dealer. In this structure, the

exchanges hold the insurance risk, while Farmers Group, Inc.

earns management fees by running the exchanges' affairs. The

only exception is Farmers New World Life Insurance Company,

a life insurer owned directly by Farmers Group, Inc.[1][5][6]

Farmers New World Life Insurance Company started as NewWorld Life Insurance Company in 1910. It was acquired byFarmers in 1953 and provides insurance products including

flexible universal life insurance, traditional term life insurance,

whole life insurance, and annuities.[1][5]

Farmers Financial Solutions, LLC. was created by Farmers in2000 to provide financial products to customers.[7]

Foremost Insurance Company was acquired in March 2000 andprovides specialty insurance including mobile homes, motor

homes, travel trailers and specialty dwellings.[1][5]

Bristol West Insurance Group, based in Davie, Florida, wasacquired in July 2007. In 1973, it began providing private

passenger auto insurance to residents in Florida and now

provides liability and physical damage insurance - focusing

exclusively on private passenger vehicles across the United

States.[1]

21st Century Insurance, based in Woodland Hills, California,was acquired on July 1, 2009.
http://en.wikipedia.org/wiki/Broker-dealerhttp://en.wikipedia.org/wiki/Farmers_Insurance_Group#cite_note-About_Farmers-0http://en.wikipedia.org/wiki/Farmers_Insurance_Group#cite_note-About_Farmers-0http://en.wikipedia.org/wiki/Farmers_Insurance_Group#cite_note-N-6-5http://en.wikipedia.org/wiki/Farmers_Insurance_Group#cite_note-N-6-5http://en.wikipedia.org/wiki/Farmers_Insurance_Group#cite_note-About_Farmers-0http://en.wikipedia.org/wiki/Farmers_Insurance_Group#cite_note-About_Farmers-0http://en.wikipedia.org/wiki/Farmers_Insurance_Group#cite_note-About_Farmers-0http://en.wikipedia.org/wiki/Farmers_Insurance_Group#cite_note-SFVBJ_2004-12-27-6http://en.wikipedia.org/wiki/Farmers_Insurance_Group#cite_note-SFVBJ_2004-12-27-6http://en.wikipedia.org/wiki/Farmers_Insurance_Group#cite_note-SFVBJ_2004-12-27-6http://en.wikipedia.org/wiki/Farmers_Insurance_Group#cite_note-About_Farmers-0http://en.wikipedia.org/wiki/Farmers_Insurance_Group#cite_note-About_Farmers-0http://en.wikipedia.org/wiki/Farmers_Insurance_Group#cite_note-About_Farmers-0http://en.wikipedia.org/wiki/Davie,_Floridahttp://en.wikipedia.org/wiki/Farmers_Insurance_Group#cite_note-About_Farmers-0http://en.wikipedia.org/wiki/Farmers_Insurance_Group#cite_note-About_Farmers-0http://en.wikipedia.org/wiki/Farmers_Insurance_Group#cite_note-About_Farmers-0http://en.wikipedia.org/wiki/21st_Century_Insurancehttp://en.wikipedia.org/wiki/21st_Century_Insurancehttp://en.wikipedia.org/wiki/Farmers_Insurance_Group#cite_note-About_Farmers-0http://en.wikipedia.org/wiki/Davie,_Floridahttp://en.wikipedia.org/wiki/Farmers_Insurance_Group#cite_note-About_Farmers-0http://en.wikipedia.org/wiki/Farmers_Insurance_Group#cite_note-About_Farmers-0http://en.wikipedia.org/wiki/Farmers_Insurance_Group#cite_note-SFVBJ_2004-12-27-6http://en.wikipedia.org/wiki/Farmers_Insurance_Group#cite_note-About_Farmers-0http://en.wikipedia.org/wiki/Farmers_Insurance_Group#cite_note-About_Farmers-0http://en.wikipedia.org/wiki/Farmers_Insurance_Group#cite_note-N-6-5http://en.wikipedia.org/wiki/Farmers_Insurance_Group#cite_note-About_Farmers-0http://en.wikipedia.org/wiki/Farmers_Insurance_Group#cite_note-About_Farmers-0http://en.wikipedia.org/wiki/Broker-dealer


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pg. 53

Auto insurance - Farmers provides auto insurance coverage forautos and collective automobiles.

Motorcycle insurance - Farmers provides motorcycle insurancecoverage through their Foremost Insurance Group.

Home insurance - Farmers provides insurance for homes,condominiums, and mobile/manufactured homes. Farmers also

provides special coverage for renters, earthquakes, floods, and

identity theft.

Life insurance - Farmers provides term, whole, and universal lifeinsurance. Life annuities are also issued by their Farmers New

World Life Insurance Company.

Recreational insurance - Farmers provides insurance coveragefor boats, ATVs, RVs, and travel trailers.

Financial services - Farmers provides mutual funds,variableannuities, and variable universal life insurance through Farmers

Financial Solutions, LLC.

Business insurance - Farmers provides business insurancecoverage for landlords and commercial property owners,

contractors, condominium homeowner associations, and

businesses in the manufacturing, service, restaurant, retail,

wholesale, and auto service & repair industry.
http://en.wikipedia.org/wiki/Term_life_insurancehttp://en.wikipedia.org/wiki/Whole_life_insurancehttp://en.wikipedia.org/wiki/Universal_life_insurancehttp://en.wikipedia.org/wiki/Universal_life_insurancehttp://en.wikipedia.org/wiki/Life_annuityhttp://en.wikipedia.org/wiki/Mutual_fundshttp://en.wikipedia.org/wiki/Variable_annuityhttp://en.wikipedia.org/wiki/Variable_annuityhttp://en.wikipedia.org/wiki/Variable_universal_life_insurancehttp://en.wikipedia.org/wiki/Variable_universal_life_insurancehttp://en.wikipedia.org/wiki/Variable_annuityhttp://en.wikipedia.org/wiki/Variable_annuityhttp://en.wikipedia.org/wiki/Mutual_fundshttp://en.wikipedia.org/wiki/Life_annuityhttp://en.wikipedia.org/wiki/Universal_life_insurancehttp://en.wikipedia.org/wiki/Universal_life_insurancehttp://en.wikipedia.org/wiki/Whole_life_insurancehttp://en.wikipedia.org/wiki/Term_life_insurance


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pg. 54

IV.EMPLOYEES GROUPINSURANCE

Employees normally work with utmost commitment when they believe

their organization sincerely cares for their future and wellbeing. Max

New York Life offers a suite of Group Insurance plans, which would

provide you and your employees with a multitude of

benefits.

Max New York Life's Group Term Insurance Scheme is a unique,simple and flexible scheme, which is considered a better alternative to

the Employee Deposit Linked Insurance Scheme (EDLI) because of

the benefits it offers to both the employer and the employees.

Under Section 17 (2-A) of the Provident Fund Act, the Central

Provident Fund Commissioner may, if requested to do so by the

employer, by notification in the Official Gazette, exempt, whether

prospectively or retrospectively, any establishment from the provisions

of the EDLI scheme, if he is satisfied that the employees of such

establishment, without making any separate contribution or payment of

premium, enjoy life insurance benefits more favaorable than thebenefits under the EDLI scheme.

Max New York Life Insurance Co. Ltd offers Group Term Insurance

Scheme, a unique, simple and flexible scheme, which is a far better


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pg. 55

alternative to the Employee Deposit Linked Insurance Scheme (EDLI)

because of the benefits it offers to both the employer and the

employee. The Employees Provident Fund organization has approved

this scheme as an alternative to EDLI scheme.

The organization will enjoy the following advantages by subscribing to

the Max New York Life Group Term Insurance as compared to the

EDLI scheme:

The premium payable by the employer under the Max NewYork Life Group Term Insurance Scheme will be usually less

than the total contribution being paid by the employer to

Regional Provident Fund Commissioner, particularly when

average age of the group is low and the employer is in a low-

risk industry.

Flexibility to opt for either a uniform flat cover for allemployees or a graded cover as per notional PF balance.

Well defined and simplified claim process will ensure quickerand hassle-free claim settlement.

Administrative convenience for additions and deletions ofmembers with no elaborate paperwork.


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pg. 56

a) Money power, which makes them ignorant about the

gestation period.

b)Brand image, business expenditure & innovative

products.

c)The employees are very selective chosen have excellent

communication skills,

d) Service quality,, which is the crux of their mission.

e) Large network branch which is helped to curt for the

payer.

a) High market is literally untapped, out of high target forfinancial advisors & for the sales department.

b) Many competitors in the market offer same products

the title different in the premium & offer.

c) Sustainabie to risk associated with invest in market.

d) Try to catch middle lower level


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pg. 57

a) Huge market is literally out of 320 millions insurable

markets only 20 percent of the population insured.

b) health insurance & pension schemes, an estimated market

potential of approximately $15 billion,

c) Group insurance give insurance coverage both to the

ppersons & child so, that like would be conversation both

cases.

a) Players like BAJAJ & BIRLA Sun life with low-premium

for the similar plan.

b) Entry of many other private company with equally strong

expense & financial strength of employers making the

competition different & saturating the urban market.

c) Current government policies do not encourage domestic

saving. If tax liable.


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pg. 58

Life Insurance Corporation (LIC) came into existence on 1st

September 1956 through the amalgamation of 154 Indian insurance

companies, 16 non-Indian companies and 75 provident. The

amalgamation was achieved with the help of Life Insurance Act passed

by the Parliament in the same year. The LIC was created with the goal

of reaching all the insurable people in the country and providing them

financial coverage at a reasonable price. In the year 1956, LIC had 5

zonal offices, 33 divisional offices and 212 branch offices. With time

there was a need for a branch office at every district headquarter and

many branches were opened, which raised the pace of the organization.

LIC now has 2048 fully computerized branch offices, 100 divisional

offices, 7 zonal offices and the corporate office. At present, online

premium collection facility is being offered in selected cities as LIC has

tied up with some banks and service providers. For providing customer

satisfaction the organization has introduced various schemes such as

ECS, ATM premium payment facility, IVRS, Info centers which are set

up in various cities including Mumbai, Bangalore, Chennai, Kolkata,

New Delhi, Pune and many more. It has also come up withSATELLITE SAMPARK offices providing easy access to

policyholders. LIC has crossed many milestones and set standards for

itself fostering unmatched performance.


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pg. 59

Holding the money with obligation and using it in the bestpossible manner in the interests of the policyholder and the

community.

Bringing attractive savings plans and making them easilyaccessible to the policyholders.

Giving attractive returns to the people and keeping in mind

national priorities. Being trustworthy to the customers and develop the spirit of

corporate social responsibility.

Spreading insurance in both rural and urban areas and coveringall the insurable persons at a reasonable cost.

Bringing in plans and policies favorable to the changingenvironment.

Providing efficient service and involving people in theorganization for their satisfaction.

3.:

Bajaj Allianz General Insurance Company Limited is a joint

venture between Bajaj Auto Limited and Allianz AG of

Germany.

Bajaj Allianz General Insurance came into existence on 2nd May

2001, when it got certification of Registration from the Insurance


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pg. 60

and Regulatory Development Authority. Bajaj Auto has a share

of 74%, whereas Allianz has the remaining 26%. In the very first

year, the company made a strong position for itself in the

industry and was reckoned amongst the top private insurers. The

premium income of the company as on 31st March 2006 was Rs.

1285 crores, whereas the profit after tax made was Rs. 52 crores.

Bajaj Allianz has a Pan India network covering over 100 towns

from Jammu to Thiruvananthapuram and aims to spread its

operations in many other cities.

The vision of the organization is to be the first choice for

customers, and provide job satisfaction to the employees and

create shareholder value. The organization strives to excel in its

products and services, providing total customer satisfaction.

Bajaj Allianz serves customers in all areas of General and Health

Insurance as well as Risk Management. It has in-depth

knowledge of the local market and extensive distribution network

with expertise, stability and experience. It has a capital base of

Rs. 147 crores, and is allowed to serve both the General and

Health insurance.

It has achieved iAAA rating, by ICRA Limited and has the

highest claims- paying ability and a stable position in the market.

In a 2006 survey, Business World has rated it among the Most

Respected Companies, putting it at No.2 position in Insurance

sector.


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4. The Company provides the following products under generalinsurance:

Travel Insurance Asset Insurance Health Insurance Corporate Insurance

:

ICICI Prudential is a joint venture between ICICI bank and Prudential

plc, both having strong operations in their respective countries. ICICI

bank is one of the leading banks in India providing quality financial

services and Prudential is an international financial service provider

headquartered at United Kingdom. ICICI and Prudential have

respective shares of 74% and 26%. The Company started operating in

December 2000. Currently, total capital with the company is Rs. 18.15

billion.

ICICI Prudential was the first insurance company in India to receive a

National Insurer Financial Strength rating of AAA (Ind.) from Fitch

ratings. It has been given the honour of being among the Most Trusted

Brands in the industry by Economic Times for 3 consecutive years. It

has a network of 450 branches, over 1,50,000 insurance advisors and

18 bancassurance partners.

As the organization grows and develops, it keeps introducing new range

of products and services and enhancing the quality of plans and


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solutions given to the customers. The distribution network is one of the

best, and is spreading across the length and breadth of the country. As

on December 31, 2006, it had made imprints in over 360 cities and

towns in India. It has over 1,75,000 advisors across the country, serving

clients with full commitment. It has tied up with ICICI Bank, Bank of

India, Federal Bank, Lord Krishna Bank, some co-operative banks,

NGOs, MFIs and corporates for making inroads into the rural areas.

ICICI Lombard General Insurance Company Limited is a joint venture

between ICICI Bank Limited and Fairfax Financial Holdings Limited.

ICICI bank is India's second largest bank; Fairfax is Canada-based,

engaged in general insurance, reinsurance, insurance claims

management and investment management. ICICI Lombard General

Insurance Company commenced its operations in general insurance

business in August 2001.

ICICI Lombard is India's number one private insurance company; it is

also the first general insurance company to be given certification of ISO

9001:2000. The company provides simple and fast documentation, fast

claims settlement, online policy issuance, and comprehensive product

line.

It has also been given iAAA rating by ICRA for having highest claims

paying ability. In the very first year of operations, it was able to reach

financial breakeven and achieve underwriting breakeven in the second

year. Security is provided through encryption and it is the first company


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to provide digitally signed documents. It has been honored as the most

Customer Responsive Company by the Economic Times. Times of

India has designated it as the Best Housing Insurance in the Smart

Living Awards by 360 degrees. It has also been awarded Gold Shield

for "Excellence in Financial Reporting". It is among the top three

companies to be awarded the "General Insurance Company of the

Year" at the 10th Asia Insurance Industry Awards.

:

Birla Sun Life Insurance Company Limited (BSLI) is a joint venture

between Aditya Birla Group and Sun Life Financial Inc. BSLI started

functioning in March 2001 after getting the certificate of registration

from IRDA.

Birla Sun Life Insurance Company Limited introduced unit LinkedLife Insurance Solutions in India. Within a short span of time it was

able to establish itself as a leading player in the Private Life Insurance

Industry. It has been innovative and come up with customer-centric

products to provide safety and services. The company has web-enabled

IT systems for better customer services and a strong distribution

channel which is easily approachable. The company shows corporate

governance and a high degree of transparency in all business practices.

It has professional knowledge and global expertise of Aditya Birla

Group.


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pg. 64

Birla Sunlife Insurance has been providing first class financial solutions

to its customers and has been amongst the top three private sector life

insurance companies.

Its mission is to be amongst the top players in the eyes of customers

and the first choice of insurance and retirement solutions to individuals

and groups. These innovative solutions are linked with global and

technical expertise and are deployed by a multi channel distribution

network and enhanced technology.

The company aims at keeping all people associated with it - customers,

clients, stakeholders and employees- happy and fully satisfied. It wants

to provide value added products and services to the customers, job

satisfaction to employees and highest returns to the shareholders.

Qualities like integrity, commitment, passion, and speed are the core

values of the company. The products offered by the company are:

Tata AIG General Insurance Company Ltd. is a joint venture

between Tata Sons and American International Group, Inc. (AIG).

The Tata Group is holding 74 per cent stake and the rest 26 percent

is held by AIG. The company has got the expertise, knowledge and


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pg. 65

strength of both the organizations.

Tata AIG General Insurance Company was founded on January 22,

2001. It offers general insurance in various categories, such as

automobile, home, personal accident, travel, energy, marine,

property and casualty and specialized financial solutions.

Jamsetji Tata founded Tata Group in 1860s. It has an estimated

turnover of around US $ 14.25 billion. It has spread its operations

in various fields such as steel, power, hotels, airlines, software

services, communications, etc. Some of its major projects have beenTata Tea, Tata Steel, Tata Chemicals, Titan, Tanishq, Voltas,

Westside and Tata Motors. Its imprints are made on the

telecommunication and technology sector. Regarding

telecommunications, it is the largest international long distance

service provider. Approximately two- third of the equity of Tata

Sons is held by a host of national institutions in science and

technology, medical services and performing arts. By combining the

ethical values with business acumen and fulfilling its commitment to

the nation, it has become one of the largest groups in India.

American International Group, Inc. (AIG) is the leading

international player in insurance and financial services. Its

network spreads across 130 nations. AIG member companies

serve all types of customers, be it commercial or individual. AIG

is among the leading insurers and the largest underwriter of

insurance. Aircraft leasing, financial products and trading are


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pg. 66

some of the services offered by AIG. AIG has a global expertise

of fulfilling the customer-centric needs. It has specialized

investment management capabilities in equities, fixed income,

alternative investments and real estate. AIG's stock has been

listed in the New York Stock Exchange as well as stock

exchanges in London, Paris, Switzerland and Tokyo.

The organization caters to individuals, small businesses and

corporates. Individual plans include motor, home, accident &

health and travel insurance, whereas corporate plans includeaccident & health, travel, energy, property, marine and liability

plans.

Sir Dorab Tata founded New India Assurance Company on 23rd July

1919. It has 1068 offices comprising of 26 regional offices, 393

divisional offices and 648 branches with more than 21,000 employees.It

is one of the largest Non- Life insurers in Afro- Asia and the first one to

cross Rs. 5,000 crores of Gross Premium. It has a global network

expanding in countries like Japan, U.K., Middle East, Fiji and Australia.

Its international operations started in 1920 and have spread across 24

countries having a network of 19 branches, 12 agencies, 2 associate

companies and 2 subsidiary companies. The company contributes 80%

of total overseas premium in India.The company has a highly qualified

staff, which excel in both expertise and knowledge and are trained to


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pg. 67

provide satisfaction to the customers. It is the only company able to

establish strong relationships overseas and has a record of successful

trading outside India. The performance has been outstanding and the

company has been able to maintain a strong position in the market.

It has been the pioneer in various fields such as:

Setting up an Aviation Insurance Department in 1946. Handling the complete insurance requirements of the Indian

Shipping Fleet.

Introduced its own Training School. Pioneering the concept of 'Model Office Training'. Creating department in Engineering insurance. Satellite insurance.

The company wants to develop itself as the best general insurance

company in the industry. It is concerned about the society and

community, and provides financial security at reasonable prices. The

company gives utmost importance to customer needs and there is

transparency in its operations. Some of the policies and schemes

introduced by the company are:

Public Liability Policy Jewellers Block Policy Pravasi Bharatiya Bima Yojana Policy Universal Health Insurance Scheme Fire Policy


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pg. 69

Regional Offices, 311 Divisional Offices and 635 Branch offices.

It has a team of hard working employees, having the talent to take

the company to new heights. Also the company shows concern for

both the employees and customers. It provides special covers for

large projects like power plants, steel plants and chemical plants.

It believes in actively participating in economic growth by being a

dynamic organization catering to the society with full commitment

and efficiency. The main objectives of the company are to serve the

insurance needs of the entire community, provide services atreasonable cost, make optimum utilization of the funds, maintaining

global standards, minimization of losses and retention of business.

:

HDFC Standard Life Insurance Company Limited is one of the firstcompanies to be licensed by IRDA to operate in the Insurance

sector. The company came into existence on 14th August 2000.

Both Crisil and ICRA have honored it with AAA Ratings. Similarly

Moody's and Standard and Poors have also honoured it AAA

ratings. HDFC holds 81.4% share in HDFC and the remaining

18.6% stake is with Standard Life. It integrates the strong expertise

and stability of Standard Life and HDFC.

It is one of the most trusted companies; it is easily accessible and


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pg. 70

approachable, offering value services to its customers.

The company aims to provide:

Innovative products to cater to different needs of differentcustomers

Customer service of the highest order Use of technology to improve service standards Value for money for customers Increasing market share Professionalism in carrying out business

The values ingrained in the company are to provide financial security to

policyholders, maintain trust and keep innovating to establish it as a

unique player.


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pg. 71

The insurance company should now trying to identify the gap between

current level of customer services & customer expectation some of the

strategies being recommended are as follows;

Offering a product that

I is distinctly different from other product available j

in market.

Identifying means of a delightful customer

experience,

These are additional the main product,

The company product flexible for the convenience oftheir customer.

All customer interaction should be

eliminated.

Wrong interpretation non-

awareness of policy documents by the customer may have serious

implication the long term & the possibility of the same should be

alternated by the insurance company.


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pg. 73

coverage, a member of the group is generally eligible to purchase

or renew coverage all whilst he or is a member of the group subject

to certain conditions.

Group health insurance is an insurance policy that provideshealth coverage for a group of people. Here instead of an

individual poiicy, people to enrol! in a group plan to get health

insurance coverage.

Provide more economical coverage because of mass purchaseand group discounting. Group insurance is arranged by the

Association and only requires payment to enroll.

Provide for larger amounts of life insurance and the right toconvert life insurance for each member in the association within

60 days of termination.

Group life insurance gives you very little control overthe conditions of the coverage.

LIC offers life insurance protection under group policies tovarious groups such as employees, professionals, co-operatives,

weaker sections of society, etc. The main features of the schemes

are low premium simple insurability condition and easy

administration.

The Group Supperannuation scheme is designed to providepension to employees on their retirement from service.

Few employers have introduced voluntary retirement scheme(VRS) in their establishments for the benefit of their employees.

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