Multinational companies, software entities, foreign banks and even large-sized public sector undertakings are offering employees life insurance cover as part of the HR benefit.
In the process, it has become a neck-to-neck competition among life insurance companies to offer the best quotes on term insurance products.
The market has expanded manifold with the entry of new players. HDFC Standard Life Co today stated that it has crossed a major milestone in its group insurance business, having exceeded Rs 1,000 crore in sum assured since it launched group initiative 14 months ago.
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Tata AIG Life Insurance Co is understood to be a close second, having completed Rs 650 crore in group business as of March 31. Current figures are, however, not available.
"Our performance in the group business has been led by the performance of our group term insurance plan. Thirty per cent of the total term business is accounted for by the group business," said HDFC Standard Life marketing head Pankaj Seith.
Both employers and employees see term assurance, a pure protection plan, as a highly attractive and a cost effective initiative, which is not a taxable benefit unlike other perks.
"Several multinational corporations, large domestic companies, foreign banks and software companies have already taken this plan from us. We expect this segment of our life insurance business to grow significantly over time," added Seith.
HDFC Standard Life covered 18,548 lives by offering its group plans to 35 companies and nine non-government organisations. SBI Life Insurance Co incidentally has been banking on group business from various banks and other organisations as the bancassurance model has yet to be initiated, pending regulatory framework.
Most of the new players are targeting group covers in a big way as it helps bring down accrual costs. SBI Life started offering the group product in the first quarter of the calendar year. ICICI Prudential Life Insurance is in the process of launching its group initiative.
There is close competition among the players to offer good rates to bag corporate business. The group term rates can vary depending upon the age profile and the working environment for the employees.