Plan Your Insurance Prudently

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Why Private Insurer's Cannot Be Trusted!

Why Do You Think The Premium Of Other Insurers Are So Less:-

I went through the entire process of LIC, how they calculate their premiums. They take the mortality rates from government data. Their statistical data is all derived with view to provide the maximum coverage possible at the minutest premium. But still how private players are giving policy at lower premium. This is why :-

You can see clearly that LIC has best claim settlement ratio in comparison to other private players. This is because while LIC is a corporation other are privately held companies. For LIC the goal is welfare for others it is profit. But then why private insurers can give low premium rates for their risk. It is because they litigate more and settle less. 

The same has been observed by many consumer courts throughout the country, that private players are more indulged in litigation to delay payment and thus adjust risk in between.

For further details see http://insuranceconsumerprotect.blogspot.in/

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Key-Man Insurance Policy Under Life Insurance Corporation (LIC)

Key Man Insurance Policy Under Life Insurance Corporation Of India (Introduction)

“Key Man” is an employee of a business whose contribution is so substantial that if anything happens to him the business will struggle to find a replacement and will incur losses during his absence. “KEY MAN INSURANCE” policy is taken to indemnify the business against the loss that it incurs due to non availability of the services of key man due to his death.

The following factors are to be considered before taking a key man insurance policy:-

1. Time it will take to find a suitable person to replace the key man.(If Possible)
2. Loss that will be incurred during that time. This is loss of profit.
3. Cost that will be incurred in finding suitable replacement.
4. Increase in cost(such as salary) due to such replacement.
5. Loss during the period the new replacement is acclimatizing to his roles & responsibility.

Key Man Insurance Policy Under Life Insurance Corporation Of India :-

Only TERM INSURANCE is sold as KEY-MAN INSURANCE POLICY. Also maturity date cannot go beyond the date of retirement. Supplementary benefits such as Accidental Benefits are not allowed. In Key Man Insurance Policy Under Life Insurance Corporation Of India where Key Man is a Foreign National then, the case is referred to U & R Department, Central Office.

Key Man Insurance Policy For Companies :-

1. Maximum Allowed Key Man Insurances 3 Times (AVG of 3 years Gross Profit) or 5 Times (AVG of 3 years Net Profit) , whichever is beneficial.

2. Such Key-Man should not have 51% shares in his name. 70% shares in his name and of his family means (Spouse and Children)

3. Such Key Man if has share holding but is not drawing any salary then, maximum limit is 3 Times (AVG of 3 years Gross Profit) or 5 Times (AVG of 3 years Net Profit) , whichever is beneficial.

4. Where such Key-Man is drawing SALARY but has NO SHARE HOLDING then, 3 Times (AVG of 3 years Gross Profit) or 5 Times (AVG of 3 years Net Profit) or 10 times of key man compensation package  , whichever is lower.. 3 years proof of key man salary is to be given here.

Key Man Insurance Policy For Partnership :-

1. Maximum Allowed Key Man Insurances 3 Times (AVG of 3 years Gross Profit) or 5 Times (AVG of 3 years Net Profit) , whichever lower.
2. In case of Employee and not partner it is 10 times salary of latest financial year  as reflected in form 16.

Key Man Insurance Policy For Proprietor :-

1. In case of Employee and not partner it is 10 times salary of latest financial year  as reflected in form 16.

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