Page 81 - Life Insurance Today July - December 2020

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Life insurance premium Vouchers/ bills for availing the benefit initiative where 17 start-ups collec-
under the scheme has to be submitted tively raised $45.35 million. The initia-
eligible for reimbursement on or before March 31, 2021. tive provides seed capital allowing
under LTC cash voucher On the submission of bills by employ- start-ups to scale up their operations.
scheme ees who would superannuate before Small businesses find the process of
March, the expenditure department purchasing insurance tedious and costly
The premium paid for insurance poli-
cies purchased between October 12, said, "vouchers/ bills should be submit- as they are unable to negotiate group
ted and settled before the date of su- policy pricing with a small employee
2020 and March 31, 2021 by central
perannuation". base. But health insurance has gained
government employees will be eligible
for reimbursement under the LTC cash Insurance start-up Plum awareness following the pandemic.
voucher scheme. "The group health insurance market in
raises $4 million India is projected to grow to $13.4 bil-
On October 12, the government an- lion by 2025 and we will see the rise of
nounced the LTC cash voucher scheme Sequoia Capital India backed insurance
startup Plum has raised $4.1 million in innovative insurance products. Plum
under which employees can purchase
a bid to provide group health insur- hopes to provide 700 million people with
any goods or services with a GST rate employer-sponsored insurance," said
of 12 per cent or above to avail them- ance to small and medium enterprises. Abhishek Poddar, co-founder of Plum.
selves. The payments for such pur- The recent round of funding for the
chases have to be made via digital start-up, which was launched in March No Income Tax on life in-
mode or cheque or demand draft or this year, is led by Sequoia Capital In-
NEFT/RTGS. dia and Tanglin Venture Partners. Ex- surance policies of 10 or
isting investors, including Incubate
So far, employees had only leave travel Fund, also participated in the funding more years, ICAI recom-
concession (LTC) benefits on travels round. mends Central govt
made, or else they had to forgo the In its Pre-Budget Memoranda - 2021,
amount. The expenditure department The insurer said that the amount the Institute of Chartered Accountants
said payment of premium for existing raised would be used to expand in new of India (ICAI) has recommended the
insurance policies would not be cov- markets, build distribution channels, Union government to make all life in-
ered under the LTC cash voucher hire talent and develop products. surance policies with a policy term of
scheme. Since launch, the company has seen 10 years or more exempt from tax.
"However, the payment of premium rapid growth, securing $1 million The Institute has suggested that the
worth of insurance premium. The plat-
for insurance policies purchased during tax exemption on life insurance poli-
the period between October 12, 2020, form has more than 200 companies on cies should now be provided based on
and March 31, 2021, is eligible for re- board. the policy term and not the premium
imbursement under the scheme," it The funding round is part of the fourth to sum assured ratio, which is being
said. cohort of Sequoia Capital India's Surge currently done.

"He loves her for all of the reasons you were afraid to."

Life Insurance Today July - December 2020 81