Infosys Technologies has bought the worlds largest group life insurance policy from Life lnsurance Corporation of India for a cover (or, sum assured) of around Rs 6,000 crore. LIC will be reinsuring this group cover with Swiss Re due to the sheer size of the policy.
Infosys has had a group policy with LIC for several years. However, this year, the software company decided to elevate the amount assured several-fold. The cover ranges from Rs 10 lakh to Rs 40 lakh, the sum insured increasing with seniority. At the same time, the employee head-count has risen considerably, to 38,000. As a result, the sum insured has risen more than four times, from Rs1, 300 crore a couple of years ago, to close to Rs 6,000 crore.
This could perhaps be the largest policy in the world because of the blend of high value and a large number of employees. While there are multinationals with large number of employees, the life cover is often split across various policies, depending on location.
Apart from the size, there are several other firsts in the policy. A significant feature is that covers up to Rs 40 lakh, is free cover, which, in insurance industry dialect, is cover provided without any medical examination. Secondly, the cost of the cover is the lowest for any corporate, with a premium of around Rs 3 crore. However, Infosys will have to pay Fringe Benefit Tax on the premium, since the benefit of this policy flows directly to employees.
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| Posted : 9/1/2005 |
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