You are on page 1of 75

GROUP INSURANCE

pg. 1

GROUP INSURANCE

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. pg. 2

GROUP INSURANCE
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 pg. 3

GROUP INSURANCE insurance company often has the right to non-renew a person's individual health insurance policy when the policy is up for renewal. churches and other service groups can also obtain group insurance for recognized members and possibly their dependents. then individuals are also registered as members. the policy often provides coverage for more services at a much lower cost per participant. 4 . Group insurance may be provided by other organizations besides for-profit companies. pg. Labor unions. Individual members of a group insurance plan receive insurance certificates which demonstrate their eligibility for benefits. WHAT IS GROUP INSURANCE? Group insurance is a health care coverage plan in which individual employees or members are included under one 'master policy' owned by their employers. HMO policies often require a patient to use a specified physician. who must approve any visits to eligible specialists. If the master policy held by the employer requires participation in an HMO (health maintenance organization). 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.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. which it may do if the person's risk profile changes. Because the group insurance plan has so many contributors.

Group insurers don't always require physical exams before issuing a master policy. pg. although some companies will absorb the entire cost of the policy as a benefit for employees. 5 . If a few participants receive expensive treatments for serious medical conditions.GROUP INSURANCE Financing for a group insurance policy is commonly a flexible payroll deduction. Single insurance policy or contract that covers groups of employees and their dependents. however. DEFINITIONS OF GROUP INSURANCE: 1. 2. 4. the rest of the group may have to absorb the higher premium costs over time. such as the employees of a company. 3. Collection of individuals who have regular contact and frequent interaction. As with many insurance policies. mutual influence. often at a reduced individual rate. so some participants may benefit from treatments for pre-existing conditions. common feeling of camaraderie. and who work together to achieve a common set of goals. Subdivision of a set. Insurance purchased by a group of persons. the cost of premiums can rise significantly without warning.

Under a co-pay plan. However. but there are a few drawbacks. Employers who fear large increases in premiums may take an unusual interest in their employees' private health issues. but most likely with a co-pay provision. Some members find their choices of physicians and treatments very limited under an HMO insurance plan. the covered individual must pay an established price out-of-pocket for name brand and generic medications. Almost all policies cover emergency and routine medical procedures such as regular doctor's appointments and hospital treatment for accidents. Even major medical plans can restrict the list of approved physicians. Mental health needs may also be covered under group insurance. Prescription drug expenses often fall under group insurance benefits. Some offer assistance for vision care or dental work. often called the PMD (preferred medical doctor) policy. Group insurance is definitely more affordable than a similar number of individual policies. group insurance may or may not cover the employee's spouse or dependents. but coverage may be limited to specific procedures. Companies may suddenly implement stringent 'no smoking' policies or strongly encourage other preventative health care pg. Most cover extended care in hospitals or rehabilitation centers.GROUP INSURANCE ADVANTAGES DISADVANTAGES INSURANCE OF AND GROUP Group insurance benefits can vary widely from company to company. 6 .

GROUP INSURANCE programs. Some may find this interest in their personal health to be intrusive. Small employers with low payroll save by paying a reduced group minimum premium. Because of a group‘s mandatory loss-control threshold. employers save more on their premiums. consider converting to a group program at renewal and discover the difference SAVINGS ADVANTAGES  All group policies receive a 6 percent discount.    pg. Because this group discount is combinable with other State Fund discounts. Group members enjoy numerous advantages that add value to a workers‘ compensation policy. employers have an added incentive to create safer workplaces and decrease their claims costs and experience modifications. 7 . Group policyholders may also benefit from additional claimsmanagement services. including:    Cost savings Convenient service Safety programs If you are an individual State Fund policyholder. such as the Alternative Dispute Resolution program.

These resources can help employers more effectively take advantage of the trusted core of State Fund services. legal services.GROUP INSURANCE SERVICE BENEFITS  Trade association programs may provide advice on business procedures. which can result in reduced experience modification. and a review of workplace accidents and their costs and trends. Employers get industry-focused safety services that may include the interpretation of regulations. and necessary forms and documents. Other group services may include health and dental plans.    SAFETY ENHANCEMENTS  Group members share a commitment to maintaining a good safety record. emergency-care planning. with selective underwriting review to maintain low group losses. Many associations perform claims reviews. you receive an additional layer of service from State Fund‘s staff of group specialists.  pg. Close monitoring of claims can help resolve them sooner. Membership gives employers a voice for member feedback as well as a network for contacts and information. As a group member. legislative advocacy. 8 . safety seminars. and life insurance.

The association arranges group insurance for its member and individual member pays all the premiums. d) Certificate is issued showing coverage. Association group is the group of individuals or companies with similar occupations such as dentists. The master contract exists between the association and the insurer and individual member receives a certificate detailing coverage. Must meet the requirements of having the proper designated governing class code or schedule. pg. 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. lawyers. medical doctors etc. Advantages: 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. Must meet the group underwriting criteria for the specific association.   I.GROUP INSURANCE HOW TO QUALIFY  Must be a current member in good standing of a qualifying association. 9 .

pg. restrictions or termination c) Most contracts contain restrictive clauses and a two-year suicide insurance. Member of association has to no say to it. e) Contract and coverages are negotiated between association and insurance company. 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. member. 10 .Disadvantages: a) Coverage reduces in later years and premiums can be increased without can clause.GROUP INSURANCE e) Coverage may be more comprehensive and premium is lower than individual II. b) The group insurance plan amendments. be effected without input of notice.

Everyone needs to have a health insurance so they will have a guaranteed savings in the future. MAIN ADVANTAGES OF GROUP HEALTH INSURANCE: Cost: One of the major advantages of group health insurance over individual health insurance is the cost. 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. group health insurance will provide you the basic services offered by individual health insurance with lesser amount of premium. pg. At times. portion of it.GROUP INSURANCE ADVANTAGES INSURANCE? OF GROUP INSURANCE OVER INDIVIDUAL 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. 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. 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. Unfortunately. Thankfully. 11 .

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. The only choosing which will be laid on your shoulder is to accept or deny the offer. unless in cases of fraud and misinformation). 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. 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. particularly the performance of the company where you belong to. Availability: Group health insurance policies are almost always offered by all employers to their employees. 12 . With group life insurance. By law. Of course. there is no reason why you should even deny a group health insurance policy offered by your company! pg. Although some of them have enough resources to pay the premiums offered by a particular insurance company.GROUP INSURANCE Underwriting: One of the common problems experienced by applicants of health insurance is the process of underwriting. There is nothing to choose from because the company has done the choosing for you.

This program allows employees to continue with their group policies even after leaving your job at the company. This is perfect especially if you are in the middle of a medical crisis before you left the company. 13 . 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.GROUP INSURANCE COBRA: Another exclusive feature of group health insurance policies is the Consolidated Omnibus Budget Reconciliation Act (COBRA) program. COBRA program even allows employee to get up to 18 months of their health insurance plans after they have left the company. pg.

Some group plans include cash value insurance as an option.GROUP INSURANCE TYPES OF GROUP INSURANCE I. 14 . it is also an opportunity to revise the rates. and both the insurance company and the employer have the opportunity to consider whether to continue it. some employers offer group universal life.GROUP LIFE INSURANCE The life insurance coverage provided by most group plans is one-year term. The employer is the policyholder and each covered individual is issued a certificate showing his or her certificate number. For example. which the employee can purchase by salary deduction. The plan comes up for renewal each year. pg. For the insurance company.

There are three basic types of group life insurance: group term life. Other types of insurance include business-related plans such as split dollar insurance where individual policies are purchased.GROUP INSURANCE Some companies offer individual (non-group) insurance policies purchased at the place of employment. is the policyholder and the employees or members of the group are the ones who are covered by the group policy. group universal life and variable group universal life. 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. the employer pays the premiums. 15 . with the benefits to be split between the employee and the employer. Typically. Additional personal insurance to fill gaps in insurance protection can be purchased at the employee‘s option. Such coverage is often part of an employee benefits package. The employer. 3 TYPES OF GROUP LIFE INSURANCE: Group life insurance is a type of life insurance where a single contract (master plan policy) covers and entire group of people. with the employer picking up the tab. or entity such as a labor union. pg.

group term life insurance is often a key component in employee benefit packages. Upon renewal. For this reason. Costs of the policy are mostly or totally paid for by the employer. Often. group term life insurance is generally cheaper than comparable individual policy coverage. both the insurance company and the employer can determine whether or not to continue. Rates can also increase upon policy renewal. by the pg.GROUP INSURANCE 1. The most common form of group life insurance is group term life. additional coverage in larger amounts than the master contract) can be purchased employee via payroll deductions. Typical coverage amount for group term life policies is equal to 1 or 2 times the employee‘s annual salary. GROUP TERM LIFE: A type of insurance coverage offered to a group of people. As with other types of group benefits. This is typically provided to the employees by the employer in the form of a one year annually renewable term insurance policy. 16 . This coverage will provide a benefit to the beneficiaries if the covered individual dies during the defined covered period.

GROUP INSURANCE Group term life itself has three types: basic group term life. and portable term life. many times available through electronic funds transfer. The employee chooses the type and amount of coverage to suit personal needs and circumstances and pays the cost for the premiums. Basic group term life – This is the most typical coverage. pg. providing basic coverage and often paid for by the employer. supplemental group term life. 17 .000) paid for by the employer are considered to be an employee income tax-free benefit. They make their payments directly to the insurer. this type of coverage provides the flexibility for the employee to purchase additional amounts of coverage. The premiums (up to $50. Supplemental group term life – Often offered by employers in conjunction with a basic group term life policy. Portable term life – Employees who lose the employer‘s 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.

18 . a guaranteed account. GROUP UNIVERSAL LIFE: This type of group life insurance policy combines the benefits of term life and whole life insurance. Features include: affordable premiums due to group buying power. VARIABLE GROUP UNIVERSAL LIFE: Often used in executive benefit plans or as to fund retiree life insurance. along with the potential for cash accumulation and portability. 3. optional cash value account. coverage that can be extended to age 99. The advantages include affordable group insurance rates and simplified underwriting. optional dependent coverage available as a rider. coverage that can be extended to age 100. management and distribution fees. investment option (for tax-deferred accumulation). You can choose to only pay the life insurance premium or also make payments that build cash value (above the cost of the premium). and optional sub-account investment choices. This type of group life insurance has expenses and fees such as mortality and expense charges. and dependent coverage that‘s generally available as a rider.GROUP INSURANCE 2. Features of this type of group insurance include: group buying power resulting in more affordable premiums. and investment account options (that cover a wide range of investment styles and risks). variable group universal life provides flexible life insurance. fund expenses. pg.

societies etc.GROUP INSURANCE GROUP SCHEMES: LIFE INSURANCE Group Insurance Scheme is life insurance protection to groups of people. 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. and allows you to enjoy group benefits at really low costs. GROUP TERM INSURANCE SCHEME A) NATURE OF THE SCHEME: Group (term) Insurance Scheme is meant to provide life insurance protection to groups of people. 19 . This scheme is ideal for employers. Administration of the scheme is on group basis and cost is low. Under Group (Term) Insurance Scheme. 1. associations. pg.

20 . However. Premium: The premium under such scheme may be wholly paid by the employer or the Nodal Agency.. Disability benefit etc. or some other benefits (e. the scheme may be contributory i. the members may also contribute. The schemes may have add-ons like Double Accident Benefit. Every year on Annual Renewal date LIC charges the premium depending upon the changes in size and age distribution of the age C) DIFFERENT SCHEMES: Group (term) Insurance Scheme has a number of varieties . group. D) GENERAL FEATURES OF VARIOUS GROUP INSURANCE SCHEMES: 1. cover for all amounts of outstanding housing loans or vehicle advances.Critical Illness Benefit. The Scheme may provide for a uniform cover to all members of the group or graded covers for different categories of members. life cover to supplement pension or PF benefits in case of death).g.e.GROUP INSURANCE B) PREMIUM CHARGEABLE: Group (Term) Insurance Scheme is at present offered under One Year Renewable Group term assurance plan (OYRGTA). pg.

e. payment of double the sum assured on death due to accident (without permanent disability benefit). Eligibility: 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 all non-employer-employee Group Schemes the basic insurability condition is that the member should be in good health on the date of entry.GROUP INSURANCE 2. pg. may be allowed under Group Insurance Schemes for an extra premium. 3. Detailed OYRGTA premium calculation will be made on each Annual Renewal Date. i. 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. 21 . Administration Of The Scheme: At the commencement and thereafter on each Annual Renewal Date. 4. 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. Double Accident Benefit: Double Accident Benefit.

provided that where such balance exceeds Rs.35.35.000.000 subject to a maximum of Rs. 22 . have a Statutory liability to subscribe to Employee's Deposit Linked Insurance Scheme.60. 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 pg. 1976 to provide for the benefit of Life insurance to all their employees.000 plus 25% of the amount in excess of Rs. EMPLOYEE DEPOSIT LINKED INSURANCE SCHEME What is EDLI? All employees to whom the Employee's Provident Fund and Miscellaneous Provision Act .35.000.2000 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. Under the scheme as amended with effect from 24th June.GROUP INSURANCE 2. 1952 applies. insurance cover would be equal to Rs.

GROUP INSURANCE
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.

The Better

Alternative:

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.

Advantages To The Employer:
1. The premium payable by the employer is usually less than the total 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 death certificate and the Claim Form from the employer. 3. Premium paid by the employer is treated as normal business expenses for Income-Tax purpose.

pg. 23

GROUP INSURANCE
Advantages To The Employee:

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 the group size. upon

Accident Benefit:
Double accident benefit can be allowed to the extent of the Sum Assured for an extra Premium.

Steps To Introduce The Scheme:
1. Put up notice for the knowledge of the employees that you are going in for LIC's Scheme in lieu of EDLI. 2. Apply to the Regional Provident Fund Commissioner under Sec.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, has authorized 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. pg. 24

GROUP INSURANCE

3. GROUP GRATUITY SCHEME

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 The gratuity arrangement with LIC provides the following services to the company:
  

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 Actuarial valuation

pg. 25

Liquidity: Funds available with LIC is a single account for investment and claim settlement. gives a greater comfort to employer.65% depending on fund size. This ensures highest level of safety for the total corpus and consistency in future contributions. LIC has offered 9. increase in salary also contributes to increase in liability substantially as the benefits are payable on last drawn salary. Apart from increase in service.GROUP INSURANCE Fund management: Critical issues : Liability on account of gratuity experiences sharp increase every year due to its nature of its computation. there is no idle time for earning interest. 26 . Interest rate offered by LIC is on daily balancing method.00% . The interest declared is net of administrative expenses incurred. 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.9. For the year 2009-10. Hence. hence no separate charges are charged after crediting the interest. 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. hence effective rate of pg. As the gratuity payments are statutory and LIC gratuity scheme being the only investment tool which enjoys sovereign guarantee.

Trustees can have the following options  Preferring a claim from LIC and paying to employee pg. trust may prefer a claim from LIC by sending a claim form.GROUP INSURANCE interest is much higher. 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. 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. Claim settlement: On the exit of an employee due to retirement / death/ resignation. Funding can also be in a staggered pattern during the year. Actuarial recommendations: On annual basis. Claim amount will be made available to trustees. Another significant aspect is interest gets compounded annually. LIC provides this information to the trustees and recommends the level of contributions. 27 . hence no reinvestment issues and no time lags. No charges on withdrawals for resignation or retirement or death. No responsibility on trustees on Investment decisions: Trustees are free from all investment risks and hassles in cash accumulation system. but no charges at entry level for any number of payments.

pg.  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 scheme also provides for employee welfare measures with built in insurance cover. The premium is not treated as perks in the hands of the employees. 28 .  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 insurance cover can be flexible depending on the requirements of the Trust. Besides the above said advantages. The Group Insurance premium will be commensurate to the cover provided.GROUP INSURANCE   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.

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.GROUP INSURANCE 4. pg. GROUP SUPERANNUATION SCHEME An organization today. an employer has two alternatives under the provisions of Rule 89 of Income Tax Rules 1962. 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. 29 .

pg. We conduct free actuarial valuations of the funds administered by us from time to time. purchase annuity from LIC to provide pension for such retiring member. 30 .GROUP INSURANCE 1. The problem of liquidity gets automatically eliminated as soon as the fund is managed by LIC. at very nominal cost. Entrust the Management of the Pension Fund to an Insurer by purchasing its Group Superannuation Scheme. An attractive and competitive yield on the fund will be credited to Fund A/c. 4. ADVANTAGES OF THE LIC MANAGED PENSION FUND: The LIC managed Pension fund has the following added and distinct advantages:1. Group Insurance in conjunction with the Group Superannuation Scheme can be taken by an Organization to provide for an attractive lump sum payment on the unfortunate death of a member while in service. Create a privately managed trust fund and as and when a member retires. 3. 2. The Administration of the fund is carried out by us in a scientific manner and claims are promptly settled. 5. 2.

31 . the pension as per his pg. Such Contributions are accumulated by LIC and the accumulated amount is utilized to provide various benefits as mentioned below. A lump sum payable by way of death besides the pension. 3) On Withdrawal: He can get the equitable interest transferred to the Superannuation Scheme of the new employer or opt for immediate or deferred pension. BENEFITS: 1) On Retirement: On Retirement of a member. 2) On Death: The Pension is payable on the life of the beneficiary. if the employer has taken Group Insurance Scheme in conjunction with the Group Superannuation Scheme. the corpus (contributions plus interest) is utilized to provide choice.GROUP INSURANCE SUPERANNUATION SCHEME PROVIDED BY LIC: The employer contributes a certain fixed percentage of salary of each member. Corpus is utilized towards the payment of pension of the type the beneficiary may opt and the benefit so received is tax free.

32 . It is entirely upto him to decide to which class/ classes of employees he desires to extends the scheme. after the categories are specified. 5. 3. 1/3rd of the pension can be commuted at vesting. The eligibility conditions may be defined on the basis of designation or salary. ELIGIBILITY CONDITION: It is not obligatory or statutory on the part of the employer to provide for pension to all employees. Life Pension guaranteed for 5. Joint Life Pension payable to the last survivor of the employee and spouse with return of capital on the death of the last survivor. Life Pension with Return of Capital and Group Pension Terminal Bonus on death. CONTRIBUTION: pg. 4. employer cannot discriminate between the employees and thus extends the scheme uniformly).10. If desired .GROUP INSURANCE PENSION OPTIONS PROVIDED BY LIC: 1. Joint Life Pension payable on the last survivor of the employee and spouse. 2.15 or 20 years and life thereafter. (However. Life Pension ceasing at death.

in the case of the Contributions scheme qualifies for exemption under Section 80C of the Income-Tax Act. pg. both the employer and the employees may contribute. The employee's contribution .80% of the contribution (s) towards the past service liability are treated as deductible business expenses spread over in the subsequent years of payment. The income tax concession will be available only if the scheme is approved by the CIT. but is so desired.GROUP INSURANCE 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. Act. 3. 1. 33 . 1961 and Part XIII of the Income Tax Rules . WHO PAYS CONTRIBUTION? Mostly the employer contributes. In terms of a Notification issued by the Central Board of Direct Taxes . The annual contribution is treated as a deductible business expense in term of Section 36(1) (iv) of the I.A.) The annual contributions are treated as deductible business expenses. 1962. 2.T. in which case the scheme is called a Contributory Pension TAX BENEFITS: The provisions relating to the approved Superannuation Scheme are set out in Part 'B' of the Fourth Scheme of the Income-Tax Act. Fund Scheme.

GROUP SAVINGS LINKED INSURANCE SCHEME The people working in the metropolitan cities. 5. occupied as they are in their day to-day activities where inflation is inevitable. find difficult to provide adequate security for their families. 34 . Individual insurance with high premium in fact does not provide pg.GROUP INSURANCE GROUP INSURANCE SCHEME IN CONJUNCTION WITH SUPERANNUATION SCHEME: The members of the Group Superannuation scheme can be covered under Group Insurance in conjunction with superannuation scheme so as to provide death risk cover while in service subject to certain conditions.

Central Government has a similar scheme with minor modifications. Semi-Government Organizations. 35 . Attractive returns on savings to meet post retirement needs. LIC has come out with an attractive insurance scheme viz. the membership of the pg. II) INTRODUCTION OF THE SCHEME: a) The Scheme can be introduced by employers provided certain percentage of employees is Scheme is compulsory. Keeping this in mind. Their need for insurance protection during service coupled with adequate savings for carefree retired life remains unfulfilled. willing to join the Scheme. b) For the new entrants to the Company. Public Sector Organizations and also Large private business houses and industrial enterprises have introduced this scheme. the salient features of which are as under: I) OBJECTIVES OF THE SCHEME:    Protection at low cost without individual evidence of health.GROUP INSURANCE adequate insurance protection. Group Savings Linked Insurance scheme at a very low cost. Simple procedures for granting life cover to large groups under one umbrella.

Risk Premium is utilized to offer life cover and the Savings Premium is accumulated in members IV) ACCIDENT BENEFIT: Premium. All employees who have not crossed the retirement age are eligible to join the scheme. The only insurability condition is that the employee should not be absent on medical ground on the date of commencement of the scheme. Risk Premium and Savings Premium.Premium has two components i. Double accident benefit can be allowed to the extent of the Sum Assured for an extra V) INTEREST ON The present rate of interest allowed on saving portion of premium is 8% compounding VI) ELIGIBILITY TO Any employee irrespective of his present state of health is eligible to join the scheme subject to certain conditions.e. 36 . JOIN THE SCHEME: account. SAVINGS: yearly. pg.GROUP INSURANCE III) PREMIA: It is decided on the basis of Group size and the occupation of the group. All future employees have to join the scheme compulsorily.

GROUP LEAVE SCHEME ENCASHMENT pg. 80C of the Income Tax Act. The premium paid by the employer towards insurance cover is treated as business expenses. The entire claim amount including interest earned payable on retirement or leaving service or on death is free from income-tax. savings as well as risk premium is entitled for income-tax rebate under Sec.GROUP INSURANCE VII) TAX BENEFITS: Employees' total contribution. 6. 37 .

if any. therefore. available to the employees and to provide for the same in their Annual Accounts. fund your leave encashment liability and let LIC take care of your worries. 1995. To meet this need of entrepreneurs and businesses. Just pay a yearly premium. So can be Medical Leave Encashment. necessary for the companies to ascertain liability in respect of Leave Encashment facilities. voluntary retirement FUNDING OF LEAVE etc. available to the employees and provide for the same in the books of accounts every year.GROUP INSURANCE 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. NATURE OF LIABILITY: The amount depends upon the leave to the credit of the employee and his/ her salary at the time of exit. LIC has introduced Group Leave Encashment Scheme. can be a huge liability to the company. disablement. if any. ENCASHMENT: End-of-the-year leave encashment facility available to employees. death. the employers have to account for the liability in respect of leave encashment facility. if provided for. It helps the employers in ascertaining the true cost of their products and services. 38 . pg. Liability is of increasing nature as it is linked with salary as well as leave position. It is. As per the amended section 209 (3) of the Company's Act 1956 and Accounting Standard (AS-15) dated January.

The company will contribute as per the advice of LIC. A small term insurance premium will be charged in addition to contributions for funding. The Company will submit the employees' data and rules for Leave Encashment. On the exit of an employee or encashment of leaves during the service the Leave Encashment amount will be paid from the Fund of the scheme maintained with LIC. 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. The salient features of the scheme are as follows:1. 39 . LIC will make actuarial valuation and find out the funding requirements which shall be quoted to the company. pg.GROUP INSURANCE THE FEATURES: Group Leave Encashment Schemes (GLES) of LIC helps the employers in funding of their lave encashment liability. 3. 2. A uniform life cover per employee or graded cover will be provided under One Year Renewable Group Term Assurance Plan of LIC. BENEFITS: 1. A Running Account will be maintained under the scheme and the 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.

3. Age (nearer Birthday) at entry of the member into the Scheme. The Life Insurance Corporation of India will do the Actuarial Valuation and will provide necessary certificate as per AS-15.life cover on the anniversary date preceding the date of death is payable . Term of loan. Schedule of repayment. 5. his/her family will be entitled to the amount of Insurance Cover. in addition to his / her leave encashment benefit. 40 .GROUP INSURANCE 2. The minimum term of assurance is 3 years. Rate of interest with which the loan was availed.The claim proceeds are used to square off the outstanding loan. UNDER THE SCHEME. Outstanding loan amount at entry date. Existing Borrowers can join the scheme with certain conditions within 6 months of the commencement of scheme. On the death of an employee. 4. which will be tax-free. Any borrower may become member of this scheme . The amount of Term Insurance Premium paid for Life Insurance Cover will be treated as business expenses. 2. THE PREMIUM DEPENDS UPON: 1. In case of death of the member during the coverage period . 4. 3. pg.

41 . pg. The relevant premium is to be paid by the Group Policyholder. Group Leave Encashment and Group insurance in conjunction with Superannuation. Schemes along with which the rider can be given shall include Group insurance. Group Gratuity (CA). GROUP CRITICAL ILLNESS RIDER 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. The Benefit will not be extended to spouses or dependants. OYRGTA ( One year renewal group term assurance ) type schemes.e.GROUP INSURANCE 7. Only full time permanent employees who are actively at work will be eligible for Critical Illness cover.

Stroke 2. Cancer 2. 3.GROUP INSURANCE FEATURES : 1. The diseases covered under the rider (subject to certain exclusions) are: 1. Coronary Artery (Bye pass) Surgery 3. 42 . The Group critical illness rider benefit to employees is given as an add on benefit to the Group policy which has an element of life cover. All members of the attached policy should participate at inception and all eligible new members should compulsorily participate. Heart attack (Myocardial infarction) 4. pg. 4. 2. Major Burns. Aorta (Surgery of Aorta) 7. The Group Critical Illness rider allowable for each member 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. Heart valve replacement 3. Kidney failure (End stage renal disease) 6.

the scheme on which the rider is opted for) benefits as under shall become payable : 1. The Group Critical illness (Accelerated) Benefit pays a lump 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. 2. pg.. 2. 4. under the base plan (i. A benefit equal to base sum assured if no critical illness benefit is or has been paid earlier. In case of death nothing is payable under this rider. However. No Critical Illness Benefit shall become payable to a member if the disease occurs within 90 days of the start of the coverage for that member of the scheme. The Critical Illness Accelerated benefit is payable upon the first incidence of any of the 8 specified diseases and evidenced as per the diagnostic criteria specified. This period of 90 days shall be called ―Waiting period‖.GROUP INSURANCE BENEFITS : 1. the benefit is payable reduced by the amount of critical illness benefit payable or already paid. 43 . If critical illness benefit is payable or already paid. the difference between the base sum assured and the critical illness benefit already paid is payable on death. The rider shall terminate on payment of the Critical Illness benefit. 3.e. In other words.

revolution. 4. civil war . act of foreign enemy. War. during the waiting period).e. (I. to any Critical Illness for which care. 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. rebellion.e. 44 . or for which claim has or could have been made under any earlier policy. regardless of whether the earlier incidence occurred before the individual was covered or whether the insured was covered by us or another insurer. or howsoever. 2.GROUP INSURANCE EXCLUSIONS: 1. Any disease occurring within 90 days of the start of the coverage for each member of the scheme. Diseases that have previously occurred in the life of the member of the scheme i. or which first manifested itself or was contracted before the start of the policy period. Any congenital condition. 3. treatment. 5. Failure to seek or follow medical advice. arising out of.mutiny. Diseases in the presence of an HIV infection. based on. invasion. riot or civil commotion. insurrection. the benefit is payable only if the disease is a first incidence . No payment will be made for any claim directly or indirectly caused by. 8. strikes.armed or unarmed truce. military or usurped power. pg. or advice was recommended by or received from a Physician. 6. hostilities(whether war be declared or not).

Participation by the member of the scheme in any flying activity. The premium payable are exempted under section 80D of Income Tax act. fare-paying passenger of a recognised airline on regular routes and on a scheduled timetable. 10. pg. military or air force operation during peace time. Taking part in any naval.GROUP INSURANCE 9. 45 . Additional exclusions may be disease-specific and would be incorporated into the definition of the disease. All benefits under the policy are also subject to the Tax Laws and other financial enactments as they exist from tome to time. TAX BENEFITS : 1. 2. except as a bona fide.

The insurance company is then able to reduce the rate it charges to provide insurance for each individual member of the group. Common varieties of group health insurance plans include: 1. A primary advantage is the purchasing power of the group that achieves reduced acquisition costs for the insurance company. Fully Insured Employer Group . 46 .The employer contracts directly with the insurance company to provide certificates to covered employees.GROUP HEALTH INSURANCE Group health insurance makes individual coverages available on a group basis.GROUP INSURANCE II. the major distinctions being the mechanism used for purchasing the insurance. Typical arrangement is either for major medical or health pg. There are a variety of types of group health insurance plans. The Group is in a better position to bargain with the insurance company for additional benefits for its members.

The group contracts with an insurance company or third-party administrator to handle the paperwork. Participants are either assigned or select from a group of general practitioners. 3. 4.a group program under which the organization provides a full range of medical services to participants.Insurance companies group certain industries together and then gather small employers together to form a larger group. Health Maintenance Organization (HMO) . The small employers can then get coverages otherwise not available unless charged a much higher rate. along with the added cost for administration. 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. the pg. These groupings enable the insurance company to better predict the cost of providing the insurance.GROUP INSURANCE maintenance organization (HMO) coverages. Large Employer Group . All the small employers get the same policy without deviation. Association Group .available to large groups. 2.same as a fully insured employer group with direct contract between the insurance company and the employer to provide individual certificates to covered employees. Self-Funded ERISA . Individual participants insured by an HMO are called ―enrollees‖. Small Employer Group . 6. The group pays for all costs associated with the operation of the insurance plan itself. who then refer their patients to specialists when the need arises. 47 . 5.similar to a fully insured employer group.

a long-term health insurance plan offered through the group or association. and other health care providers) that contracts with health insurance companies. Preferred Provider Organization – another kind of health care network (doctors. hospitals. it is a different type of group. TYPES OF GROUP HEALTH INSURANCE: Health insurance coverage for an individual can be quite expensive. Group Managed Care . Many employers offer health insurance coverage to full-time pg. 8. 7. such as a credit card company offering insurance as a benefit to its cardholders or a church group offering insurance to its parishioners.GROUP INSURANCE distinction being that instead of an employer. 48 .

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. LARGE EMPLOYER GROUPS: Large employers contract with a single national health insurance company to provide coverage for employees. This enables insurance companies to get a better feel for the liability issues within certain industries. 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. SMALL EMPLOYER HEALTH GROUPS: A small employer's group is an insurance plan to cover groups of employees from multiple employers within the same industry. Unlike large group health plans.GROUP INSURANCE employees as a benefit of employment knowing that individual coverage would be far too expensive otherwise. It also allows small businesses the opportunity to provide insurance for employees that would otherwise only be available at higher monthly premiums. 49 . the coverage choice for employees in small employer pg. according to insurance information website Free Advice. There are several group plans used for this goal. Employers and other organizations are able to achieve lower monthly premiums through contracts with insurance companies because they provide large groups of customers.

you must be a member of the organization offering the plan.GROUP INSURANCE health plans is uniform throughout with everyone getting the same coverage. In order to participate in these group plans. A referral from an HMO-approved doctor is generally required in order to see a specialist when the need arises. They may choose from a roster of approved doctors/physicians. HEALTH MAINTENANCE ORGANIZATIONS: 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. 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. pg. HEALTH ASSOCIATION GROUPS: A health association group is not insurance through an employer or directly through a health insurance provider. 50 . but rather through a third party such as a credit card company or special interest group.

GROUP INSURANCE III.  Farmers Group. However. Inc.[5] Farmers Group Inc. STRUCTURE: Farmers Insurance Group of Companies is composed of a holding company and the various underwriters. the Farmers Group. It acts under the dba Farmers Underwriters Association. is headquartered in Los Angeles. Truck Insurance Exchange. and Fire Insurance Exchange. auto insurance. California but is 100% owned by Zurich Financial Services based in Zurich. It is the third largest insurance group in the US servicing over 10 million households in 41 states. life insurance.FARMERS INSURANCE GROUP The Farmers Insurance Group of Companies is a personal lines property and casualty insurance group providing homeowners insurance. Truck Underwriters Association and Fire Underwriters Association. reciprocal inter-insurance exchanges. and smaller companies associated with it.[5] The exchanges own several other insurance pg. 51 . Inc. they act as the attorneys-in-fact for three reciprocal inter-insurance exchanges — Farmers Insurance Exchange. management company is not an owner of these reciprocal inter-insurance exchanges. and financial services in the United States. is the holding company and provides insurance management services. Together with its wholly owned subsidiaries. Switzerland.

Florida. In 1973. In this structure. as well as Farmers Financial Solutions. based in Woodland Hills. whole life insurance.GROUP INSURANCE companies and insurance holding companies. including MidCentury Insurance Company.[7] Foremost Insurance Company was acquired in March 2000 and provides specialty insurance including mobile homes.[1][5] Bristol West Insurance Group.focusing exclusively on private passenger vehicles across the United States. Inc. Inc. and annuities. California. pg. and Bristol West Insurance Group. motor homes. a registered broker-dealer. it began providing private passenger auto insurance to residents in Florida and now provides liability and physical damage insurance . was acquired in July 2007. based in Davie. earns management fees by running the exchanges' affairs. LLC. 52     .[1][5] Farmers Financial Solutions. the exchanges hold the insurance risk.[1] 21st Century Insurance. It was acquired by Farmers in 1953 and provides insurance products including flexible universal life insurance.[1][5][6]  Farmers New World Life Insurance Company started as New World Life Insurance Company in 1910. traditional term life insurance. Foremost Insurance Company. The only exception is Farmers New World Life Insurance Company. while Farmers Group. travel trailers and specialty dwellings. was acquired on July 1. LLC. a life insurer owned directly by Farmers Group. 2009. was created by Farmers in 2000 to provide financial products to customers.

Farmers provides term. retail. and businesses in the manufacturing. and travel trailers. 53 . contractors. Motorcycle insurance . floods.Farmers provides business insurance coverage for landlords and commercial property owners. condominiums.GROUP INSURANCE PRODUCTS:  Auto insurance . Financial services . and mobile/manufactured homes. RVs. earthquakes.Farmers provides insurance for homes.Farmers provides motorcycle insurance coverage through their Foremost Insurance Group. wholesale. and universal life insurance. condominium homeowner associations.Farmers provides mutual funds.       pg.Farmers provides insurance coverage for boats. and auto service & repair industry. whole. Business insurance . LLC. and identity theft. service.Farmers provides auto insurance coverage for autos and collective automobiles. Home insurance . Recreational insurance . variable annuities. and variable universal life insurance through Farmers Financial Solutions. Farmers also provides special coverage for renters. ATVs. Life insurance . Life annuities are also issued by their Farmers New World Life Insurance Company. restaurant.

Ltd offers Group Term Insurance Scheme. simple and flexible scheme. which would provide you and your employees with a benefits. which is a far better pg. if he is satisfied that the employees of such establishment. Max New York Life's Group Term Insurance Scheme is a unique.EMPLOYEES INSURANCE GROUP Employees normally work with utmost commitment when they believe their organization sincerely cares for their future and wellbeing. 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. a unique. without making any separate contribution or payment of premium. enjoy life insurance benefits more favaorable than the benefits under the EDLI scheme. 54 . the Central Provident Fund Commissioner may. multitude of FEATURES: Under Section 17 (2-A) of the Provident Fund Act. Max New York Life offers a suite of Group Insurance plans. Max New York Life Insurance Co. if requested to do so by the employer. by notification in the Official Gazette. any establishment from the provisions of the EDLI scheme. exempt. simple and flexible scheme.GROUP INSURANCE IV. whether prospectively or retrospectively.

particularly when average age of the group is low and the employer is in a lowrisk industry.  Flexibility to opt for either a uniform flat cover for all employees or a graded cover as per notional PF balance. 55 . The Employees Provident Fund organization has approved this scheme as an alternative to EDLI scheme. BENEFITS: 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 New York Life Group Term Insurance Scheme will be usually less than the total contribution being paid by the employer to Regional Provident Fund Commissioner.  Administrative convenience for additions and deletions of members with no elaborate paperwork.  Well defined and simplified claim process will ensure quicker and hassle-free claim settlement. SWOT ANALYSIS pg.GROUP INSURANCE alternative to the Employee Deposit Linked Insurance Scheme (EDLI) because of the benefits it offers to both the employer and the employee.

d) Try to catch middle lower level pg. 56 . c)The employees are very selective chosen have excellent communication skills. business expenditure & innovative  Weakness: a) High market is literally untapped. image. c) Sustainabie to risk associated with invest in market.GROUP INSURANCE  Strength: a) Money power. d) Service quality. out of high target for financial advisors & for the sales department. which makes them ignorant about the gestation period.. b)Brand products. b) Many competitors in the market offer same products the title different in the premium & offer. e) Large network branch which is helped to curt for the payer. which is the crux of their mission.

c) Current government policies do not encourage domestic saving.  Threats: a) Players like BAJAJ & BIRLA Sun life with low-premium for the similar plan. c) Group insurance give insurance coverage both to the ppersons & child so. pg. that like would be conversation both cases. 57 . an estimated market potential of approximately $15 billion. b) health insurance & pension schemes. If tax liable.GROUP INSURANCE  Opportunity: a) Huge market is literally out of 320 millions insurable markets only 20 percent of the population insured. b) Entry of many other private company with equally strong expense & financial strength of employers making the competition different & saturating the urban market.

Bangalore. LIC has crossed many milestones and set standards for unmatched performance. Kolkata. At present. Life Insurance IN INDIA Corporation of India: Life Insurance Corporation (LIC) came into existence on 1st September 1956 through the amalgamation of 154 Indian insurance companies. online premium collection facility is being offered in selected cities as LIC has tied up with some banks and service providers. It has also come up with SATELLITE itself SAMPARK fostering offices providing easy access to policyholders.GROUP INSURANCE TOP 10 PLAYERS IN INSURANCE COMPANIES 1. IVRS. New Delhi. Pune and many more. The amalgamation was achieved with the help of Life Insurance Act passed by the Parliament in the same year. 33 divisional offices and 212 branch offices. Chennai. LIC had 5 zonal offices. 16 non-Indian companies and 75 provident. LIC now has 2048 fully computerized branch offices. 7 zonal offices and the corporate office. 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. ATM premium payment facility. pg. 100 divisional offices. which raised the pace of the organization. Info centers which are set up in various cities including Mumbai. For providing customer satisfaction the organization has introduced various schemes such as ECS. 58 . In the year 1956. With time there was a need for a branch office at every district headquarter and many branches were opened.

      3. Bringing in plans and policies favorable to the changing environment. Being trustworthy to the customers and develop the spirit of corporate social responsibility. Bajaj Allianz General Insurance came into existence on 2nd May 2001.GROUP INSURANCE Objectives:  Holding the money with obligation and using it in the best possible manner in the interests of the policyholder and the community. 59 . Bajaj Allianz General Insurance Company Limited: Bajaj Allianz General Insurance Company Limited is a joint venture between Bajaj Auto Limited and Allianz AG of Germany. Providing efficient service and involving people in the organization for their satisfaction. when it got certification of Registration from the Insurance pg. Bringing attractive savings plans and making them easily accessible to the policyholders. Spreading insurance in both rural and urban areas and covering all the insurable persons at a reasonable cost. Giving attractive returns to the people and keeping in mind national priorities.

whereas Allianz has the remaining 26%. 52 crores. and is allowed to serve both the General and Health insurance. It has achieved iAAA rating. 147 crores. whereas the profit after tax made was Rs. 1285 crores. In a 2006 survey. Business World has rated it among the Most Respected Companies. The premium income of the company as on 31st March 2006 was Rs.2 position in Insurance sector. and provide job satisfaction to the employees and create shareholder value. The organization strives to excel in its products and services. The vision of the organization is to be the first choice for customers. by ICRA Limited and has the highest claims. It has in-depth knowledge of the local market and extensive distribution network with expertise. Bajaj Auto has a share of 74%. providing total customer satisfaction. 60 . It has a capital base of Rs. In the very first year. the company made a strong position for itself in the industry and was reckoned amongst the top private insurers. pg. 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.paying ability and a stable position in the market. Bajaj Allianz serves customers in all areas of General and Health Insurance as well as Risk Management. putting it at No.GROUP INSURANCE and Regulatory Development Authority. stability and experience.

15 billion. total capital with the company is Rs. 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. Currently. As the organization grows and develops. 61 . over 1. ICICI and Prudential have respective shares of 74% and 26%. It has a network of 450 branches. 18. ICICI Prudential Life Insurance Company: ICICI Prudential is a joint venture between ICICI bank and Prudential plc. both having strong operations in their respective countries.50.) from Fitch ratings. The Company started operating in December 2000. It has been given the honour of being among the Most Trusted Brands in the industry by Economic Times for 3 consecutive years. ICICI Prudential was the first insurance company in India to receive a National Insurer Financial Strength rating of AAA (Ind.000 insurance advisors and 18 bancassurance partners.GROUP INSURANCE 4. it keeps introducing new range of products and services and enhancing the quality of plans and pg. The Company provides the following products under general insurance:     Travel Insurance Asset Insurance Health Insurance Corporate Insurance 3.

ICICI Lombard General Insurance Company commenced its operations in general insurance business in August 2001. Lord Krishna Bank. 4.GROUP INSURANCE solutions given to the customers. reinsurance. and is spreading across the length and breadth of the country. NGOs. serving clients with full commitment. 62 . it was able to reach financial breakeven and achieve underwriting breakeven in the second year. It has tied up with ICICI Bank. ICICI bank is India's second largest bank. engaged in general insurance. it is also the first general insurance company to be given certification of ISO 9001:2000. The distribution network is one of the best. it had made imprints in over 360 cities and towns in India. The company provides simple and fast documentation. Security is provided through encryption and it is the first company pg. insurance claims management and investment management.75. online policy issuance. It has over 1. MFIs and corporates for making inroads into the rural areas. fast claims settlement. It has also been given iAAA rating by ICRA for having highest claims paying ability. ICICI Lombard is India's number one private insurance company. ICICI Lombard General Insurance: ICICI Lombard General Insurance Company Limited is a joint venture between ICICI Bank Limited and Fairfax Financial Holdings Limited. 2006. some co-operative banks. In the very first year of operations. and comprehensive product line. Bank of India. Fairfax is Canada-based. As on December 31.000 advisors across the country. Federal Bank.

63 . It has also been awarded Gold Shield for "Excellence in Financial Reporting". Birla Sun Life Insurance Company Limited introduced unit Linked Life Insurance Solutions in India.GROUP INSURANCE to provide digitally signed documents. 5. It has professional knowledge and global expertise of Aditya Birla Group. The company shows corporate governance and a high degree of transparency in all business practices. It has been honored as the most Customer Responsive Company by the Economic Times. pg. 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. It is among the top three companies to be awarded the "General Insurance Company of the Year" at the 10th Asia Insurance Industry Awards. Times of India has designated it as the Best Housing Insurance in the Smart Living Awards by 360 degrees. Birla Sun Life Insurance Company Limited: 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. Within a short span of time it was able to establish itself as a leading player in the Private Life Insurance Industry.

happy and fully satisfied. commitment. These innovative solutions are linked with global and technical expertise and are deployed by a multi channel distribution network and enhanced technology. Qualities like integrity. The company aims at keeping all people associated with it . The company has got the expertise.GROUP INSURANCE 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. It wants to provide value added products and services to the customers. is a joint venture between Tata Sons and American International Group.TATA AIG General Insurance: Tata AIG General Insurance Company Ltd. 64 .customers. Inc. and speed are the core values of the company. The Tata Group is holding 74 per cent stake and the rest 26 percent is held by AIG. clients. knowledge and pg. (AIG). passion. The products offered by the company are: 6. job satisfaction to employees and highest returns to the shareholders. stakeholders and employees.

such as automobile. It has an estimated turnover of around US $ 14. Westside and Tata Motors. Titan. power. marine. By combining the ethical values with business acumen and fulfilling its commitment to the nation. travel.third of the equity of Tata Sons is held by a host of national institutions in science and technology. Regarding telecommunications. Approximately two. it is the largest international long distance service provider. it has become one of the largest groups in India. Voltas. AIG is among the leading insurers and the largest underwriter of insurance. hotels. property and casualty and specialized financial solutions. energy.25 billion. medical services and performing arts. 65 . Aircraft leasing. Tanishq. Tata AIG General Insurance Company was founded on January 22. Inc. American International Group. Jamsetji Tata founded Tata Group in 1860s. (AIG) is the leading international player in insurance and financial services. Some of its major projects have been Tata Tea. AIG member companies serve all types of customers. Its network spreads across 130 nations. personal accident. home. It offers general insurance in various categories. It has spread its operations in various fields such as steel. financial products and trading are pg. Its imprints are made on the telecommunication and technology sector. 2001. software services. etc. communications. be it commercial or individual. Tata Chemicals. airlines.GROUP INSURANCE strength of both the organizations. Tata Steel.

K. which excel in both expertise and knowledge and are trained to pg. small businesses and corporates.000 employees. 7. Individual plans include motor. Paris.GROUP INSURANCE some of the services offered by AIG. home. travel. AIG has a global expertise of fulfilling the customer-centric needs. 393 divisional offices and 648 branches with more than 21. The organization caters to individuals.The company has a highly qualified staff. 66 .. Middle East.Asia and the first one to cross Rs. It has 1068 offices comprising of 26 regional offices. Fiji and Australia.Life insurers in Afro. property. Switzerland and Tokyo. U. marine and liability plans. fixed income. It has specialized investment management capabilities in equities. New India Assurance Company: Sir Dorab Tata founded New India Assurance Company on 23rd July 1919. energy. 5.000 crores of Gross Premium. accident & health and travel insurance. The company contributes 80% of total overseas premium in India. whereas corporate plans include accident & health.It is one of the largest Non. alternative investments and real estate. AIG's stock has been listed in the New York Stock Exchange as well as stock exchanges in London. Its international operations started in 1920 and have spread across 24 countries having a network of 19 branches. It has a global network expanding in countries like Japan. 12 agencies. 2 associate companies and 2 subsidiary companies.

Satellite insurance. It is the only company able to establish strong relationships overseas and has a record of successful trading outside India. Handling the complete insurance requirements of the Indian Shipping Fleet. Creating department in Engineering insurance. The performance has been outstanding and the company has been able to maintain a strong position in the market. Pioneering the concept of 'Model Office Training'. Introduced its own Training School. The company gives utmost importance to customer needs and there is transparency in its operations. and provides financial security at reasonable prices.GROUP INSURANCE provide satisfaction to the customers. 67 . It is concerned about the society and community. It has been the pioneer in various fields such as:   Setting up an Aviation Insurance Department in 1946. 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 pg.     The company wants to develop itself as the best general insurance company in the industry.

The organization has the deep knowledge of IFFCO and thus developed a business plan that has both stability and integrity. ITGI has been one of the few companies to show underwriting profits within four years of operations.: The Oriental Insurance Company Ltd. The Oriental Insurance Company Ltd. It caters to all sections and sectors ranging from MNCs to rural sector. It offers products and services that provide quality at reasonable cost. IFFCO Tokio General Insurance: IFFCO Tokio General Insurance is a customer-centric company aiming to be easily accessible and approachable to all sections of society.GROUP INSURANCE 8. (OICL) is one of the general insurance companies under the support of the General Insurance Corporation (GIC) of India. IFFCO Tokio General Insurance has 273 employees present in 68 cities.The company focuses on delivering creative solutions to its customers. The headquarters of the company are situated at Delhi and it has 21 pg. 68 . It came into existence in the year 1947 and is one of the oldest organizations in India. It has set global standards for itself and is the only private general insurance company in India to make 5 consecutive years of experience. 9. dedicated to give full satisfaction to the customers. It is the first company to underwrite mega policies for a fertilizer and automobile client.

make optimum utilization of the funds. Both Crisil and ICRA have honored it with AAA Ratings. It integrates the strong expertise and stability of Standard Life and HDFC.4% share in HDFC and the remaining 18.6% stake is with Standard Life. It believes in actively participating in economic growth by being a dynamic organization catering to the society with full commitment and efficiency. 311 Divisional Offices and 635 Branch offices. It provides special covers for large projects like power plants. having the talent to take the company to new heights. Similarly Moody's and Standard and Poors have also honoured it AAA ratings. it is easily accessible and pg. 10. The main objectives of the company are to serve the insurance needs of the entire community. Also the company shows concern for both the employees and customers. HDFC holds 81. HDFC Standard Life Insurance Company Limited: HDFC Standard Life Insurance Company Limited is one of the first companies to be licensed by IRDA to operate in the Insurance sector. 69 . provide services at reasonable cost. maintaining global standards. steel plants and chemical plants. The company came into existence on 14th August 2000. It has a team of hard working employees. It is one of the most trusted companies. minimization of losses and retention of business.GROUP INSURANCE Regional Offices.

offering value services to its customers. RECOMMENDATION pg. 70 . The company aims to provide:  Innovative products to cater to different needs of different customers 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.GROUP INSURANCE approachable.

Innovativeness: Identifying means of a delightful customer experience. 6. Hassle eliminated. 2. Product differentiation: Offering a product that I is distinctly different from other product available j in market. 3.GROUP INSURANCE 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. free services: All customer interaction should be CONCLUSION pg. 1. 5. Riders: These are additional the main product. 4. Flexibility: The company product flexible for the convenience of their customer. 71 . Proper policy documentation: Wrong interpretation nonawareness 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.

 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.  Another distinctive feature is that under group pg.GROUP INSURANCE This project was a great experience for me I really learnt a lot of things from this project. or professionals in a common group. This project gave us the knowledge and information about GROUP INSURANCE I have found. employees of a common employer.  Group insurance is an insurance that covers a group of people. 72 .  A feature which is sometimes common in group insurance is that the premium cost on an individual may not be risk-based. usually who are the members of societies.

 Provide more economical coverage because of mass purchase and group discounting. pg.  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. 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 provides health coverage for a group of people.  The Group Supperannuation scheme is designed to provide pension to employees on their retirement from service. 73 .GROUP INSURANCE coverage. etc. professionals. co-operatives. people to enrol! in a group plan to get health insurance coverage. Here instead of an individual poiicy. The main features of the schemes are low premium simple insurability condition and easy administration. Group insurance is arranged by the Association and only requires payment to enroll.  LIC offers life insurance protection under group policies to various groups such as employees.  Few employers have introduced voluntary retirement scheme (VRS) in their establishments for the benefit of their employees.  Group life insurance gives you very little control over the conditions of the coverage. weaker sections of society.

GROUP INSURANCE  Group Insurance refers to the policy taken on the lives usually of the employees of a business concern.com pg.com www.N. 74 .Sharma Text Book: Insurance Operation Author: Institute of Certified Risk & Insurance Managers (ICRIM) WEBLIOGRAPHY www.iicofindia. A' policy is taken for insuring a group of people generally employees. BIBLIOGRAPHY Text Book: LIC of India Author: Sumninder Kaur Bawa Text Book: Insurance Law & Practices Author: Madhu Tyagi & C.iciciprudentiai.L.Tyagi Text Book: Modern Concept of Insurance Author: M.

75 .newresuitsinqroupinsurance.com pg.GROUP INSURANCE www.