Page 51 - Insurance Times April 2017 Special Issue on Newindia

Don't rely on

your group life

cover alone

A recent survey by Marsh may not be adequate as it depends on already have a life cover, you have to
India Insurance Brokers
multiple parameters, including its
disclose it while buying another one.
found the percentage of
"But in this case, while buying
financial budget every year," says
companies offering life
insurance coverage as Chopra. an additional individual cover, the
existing group cover is usually not
part of employee benefits had The second shortcoming of an group considered,
increased from 60 per cent in 2010 to life cover is that it ceases to exist once
74 per cent in 2016-17. But, the you leave the organisation. When an Today, employees are demanding to
average sum assured has remained individual switches to a new employer, have employer-facilitated voluntary
constant at two times the annual gross he/she would be covered by the group programmes, including top-up for term
salary of the employee. term insurance, if any, being offered by life plans says Sanjay Kedia, country
the new employer. The previous policy head and chief executive officer, Marsh
So, if your annual salary is Rs. 10 lakh, can't be transferred. India Insurance Brokers. "Employees
you can expect coverage for Rs. 20 are willing to pay the premium for an
lakh. Given the inadequacies of group The older group policy cannot ICICI insurance programme that is facilitated
life covers, every employee needs to Prudential iProtect Smart Life HDFC Life by their employer, as such plans offer
supplement it with an individual life Click2Protect Plus Max Life Online Term better cost efficiency and claim
cover at an early stage in their Plan Plus PNB Metlife Mera Term Plan recovery,'' he says.
careers. even be converted into an individual
policy. The cover ceases as soon as the A third shortcoming of a group plan is
Companies can offer either fixed employee and the employer part ways. that a person has to fulfil the condition
grade-wise coverage, or coverage that of being active at work to be eligible
is a multiple of the employee's salary. Suppose that at age 45 you decide to for the claim. This means that if the
"In the latter case, the cover increases turn into an entrepreneur and your policyholder falls ill and is on leave, he
as the employee's salary increases," employer-provided life cover ceases to should have reported to work for seven
says Mahavir Chopra, director-health, exist. You then decide to buy an days to be eligible for the claim. If
life and strategic initiatives, individual policy. Buying a life cover at something were to happen to the
Coverfox.com. that age will cost you more. Also, if you employee while he is on leave, his
have a medical condition such as family may not get the claim.
As a thumb rule, the sum assured for diabetes or blood pressure, it is possible
a term life plan should be seven to 10 you may be denied a cover. "Insurance companies include this
times your annual salary, plus any loan condition to ensure that the illness is
that you may have. The first Hence, even if you have an employer not a critical illness,'' says Arvind
shortcoming of the group life cover is provided term life insurance, you must Laddha, deputy CEO, JLT Independent
that it is usually too small. "The buy an individual term cover of your Insurance Brokers. (Source: Business
coverage provided by the employer own at an early age. Usually, if you Standard)

The Insurance Times, April 2017 51

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