Financial Daily from THE HINDU group of publications
Saturday, Nov 12, 2005
Money & Banking
Tata AIG proposes to introduce health-oriented keyman cover
Mr Bimal Balasingham, Director, Tata AIG Life Insurance, (left) with Mr Barry Stowe, President, Accident & Health Worldwide, AIG Life Companies, at a press conference in Mumbai on Friday. Shashi Ashiwal
Mumbai , Nov. 11
TATA AIG Life Insurance will be talking to the Insurance Regulatory and Development Authority (IRDA) about offering a health-oriented keyman life insurance cover, Mr Bimal Balasingham, Director, Tata AIG Life Insurance, told newspersons here today.
Mr Balasingham said that the health-oriented life insurance could also be for senior officials in organisations.
"There is always a threat that senior management in a company could fall ill or have a heart attack. Carrying forward the spirit of insuring the common man, we will also be looking at niche segments," he said.
A keyman is usually defined as an individual who has a direct impact on the profitability and the continuity of a business; and whose absence may have an adverse effect on the health of the business.
Keyman insurance is a life insurance policy taken by the company on the life of such a key person.
In April '05, the IRDA had prohibited insurance companies from selling keyman insurance with maturity benefits, permitting only term policies.
Globally, AIG Life, the foreign partner in the joint venture, offers health oriented keyman life insurance policies.
Mr Barry Stowe, President, Accident and Health Worldwide, AIG Life Companies, said that internationally the `Accident and Health segment' brought in $7 billion in terms of premium and India contributed 6 per cent of this business.
The company hopes to expand India's share of the pie, he said.
Tata AIG Life today launched "Health Protector", a flexible accident and health insurance policy. The company had launched "Health First", a health oriented life insurance cover more than two years ago.
Mr Balasingham said that "Health First" had sold a total of 32,800 policies.
The target for the new product was premium of around Rs 2 crore and the sale of 6,000 policies every month.
The feature of `Health Protector' is that in the case of a critical illness the policyholder can choose any hospital. With "Health First" the policyholder had to choose from a list of 900 hospitals.
Health Protector is a five-year renewable term policy with the premium amount remaining constant during the tenure.
The benefits include accidental cover, family accident death and dismemberment, total and permanent disability, accidental hospitalisation cash, critical illness, cancer care and term cover.
The policy provides for lumpsum payment for diagnosis of critical illness or in the case of an accident.
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