alexa

Search in Indianmoney's WealthPedia

Home Articles Practices of key man Insurance Companies in India

Practices of key man Insurance Companies in India

IndianMoney.com Research Team | Posted On Saturday, April 04,2009, 06:02 PM

Practices of key man Insurance Companies in India

 

 

In India, under the LIC Jeevan Pramukh scheme the minimum sum that can be assured is specified as Rs. 10 lakh which sum can be increased in multiples of Rs. 1,00,000/-. Thus, no ceiling has been placed and there is a guaranteed rebate of Rs. 0.50 per thousand sum guaranteed when the amount guaranteed exceeds 50 lakhs.

 
Under the key man insurance plan offered by SBI Life Insurance there is a ceiling on the maximum sum that can be guaranteed and a floor on the minimum amount depending on the insurance plan opted for. The maximum amount guaranteed should be lower of: 5 times the usual net profit of the company for the past three years; 3 times the usual gross profit of the company for the past three years.
 
When more than one key man from the same organization is to be covered, the total cover cannot go beyond the overall limit prescribed. The ICICI Prudential Life Insurance offers the Key man insurance scheme with a greatest permissible cover: 10 times of the total annual damages package for the key man which includes salary, bonuses and all other perks; or, 2 times the average gross profits for the company for the last three years (gross profits means profits before taxation), increasing to 3 times for growing companies; or, 5 times the usual net profit of the company for the last three years, increasing to 8 times for expanding companies, whichever is lower. When there are many key men in an organization to be covered under this scheme, then the total face amount arrived at should be pro-rated for each key man in the ratio that his damages package bears to the total compensation package of all the key men.
 

What is your Credit Score? Get FREE Credit Score in 1 Minute!

Get Start Now!
CIBIL Meter
Get It now!
Attention!

This is to inform that Suvision Holdings Pvt Ltd ("IndianMoney.com") do not charge any fees/security deposit/advances towards outsourcing any of its activities. All stake holders are cautioned against any such fraud.