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Group life insurance numbers hit due to cost pressures at India Inc

Insurers said that manufacturing firms and FMCG companies are now buying covers on a group platform only for employees above a certain pay-scale.

January 17, 2020 / 05:35 PM IST

Just two weeks before the renewal of a group life insurance cover, a mid-size infrastructure firm decided against buying a cover for the employees. The annual premium of Rs 7,500 per employee for the Rs 50 lakh crore was turning out to be an additional cost for the 500 member organisation.

The rising cost pressures amidst a slowdown-like situation in the economy has led to a drop in sales of group life insurance covers. Used as a retention tool among companies in India since the country does not have social security programmes, group life is now being seen as an excess expense.

Group life

"Business has been weak and we have not been able to meet sales target. At this juncture, having a group life insurance is not feasible," said the head of employee benefits at the firm quoted above.