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Population in excess of 1 Billion

35 States and Union Territories


24 Languages
7 Religions
3000 communities
INDIA
 Diversity in language, culture and religion
 Does this diversity extend to employee
benefits?
 Yes & No
Companies providing benefit (%)
Analysed items 2004
House Rent Allowance 97
Gratuity 95
Housing Loan 91
Medical reimbursement/ allowance 90
Insurance 89
Leave Travel allowance 87
Hospitalisation 86
Variable Bonus 85
Conveyance allowance 84
Superannuation 61
Car Loan 54
Social/ Sports club membership 51
Incentive/ Sales Commission 44
Hard Furnishing 39
Medical check-up 39
Fixed Bonus 33
Other allowances 26
Flexible benefit plan 16
Companies providing benefit (%)
Analysed items 2004
House Rent Allowance 97
Gratuity 95
Housing Loan 91
Medical reimbursement/ allowance 90
Insurance 89
Leave Travel allowance 87
Hospitalisation 86
Variable Bonus 85
Conveyance allowance 84
Superannuation 61
Car Loan 54
Social/ Sports club membership 51
Incentive/ Sales Commission 44
Hard Furnishing 39
Medical check-up 39
Fixed Bonus 33
Other allowances 26
Flexible benefit plan 16
Companies providing benefit (%)
Analysed items 2004
House Rent Allowance 97
Gratuity 95
Housing Loan 91
Medical reimbursement/ allowance 90
Insurance 89
Leave Travel allowance 87
Hospitalisation 86
Variable Bonus 85
Conveyance allowance 84
Superannuation 61
Car Loan 54
Social/ Sports club membership 51
Incentive/ Sales Commission 44
Hard Furnishing 39
Medical check-up 39
Fixed Bonus 33
Other allowances 26
Flexible benefit plan 16
Overview of Employee Benefit Scenario In India

Employee
Compensation

Salary Allowances Employee


& Bonus Benefits
Overview of Employee Benefit Scenario In India

Employee Benefits

Mandatory Voluntar
y
Life Leave
Providen Insuranc Encashm
Gratuity e ent
t Fund

Mediclaim Super-
Personal annuation
Accident
Employee Benefits – Insurance Co’s viewpoint

Employee Benefits

Insuranc Retireme
e nt
Accide Mediclai Leave Superannuat
Life
nt m Encashme ion
nt
Gratuity

Defined
Defined
Contributi
Benefit
on
Mediclaim Insurance
•Reimbursement of medical expenses following hospitalization
•Cash less hospitalization facility available under certain plans
•Tax deduction available for the business

Accident Insurance
•Can offer compensation for any/all of the following:
•Accidental death, disability
•Medical expenses for treatment post accident
• List of exclusions

BOTH BENEFITS ARE OFFERED BY NON-LIFE INSURANCE COMPANIES


Life Insurance
• Benefit payable on accidental/natural death (limited exclusions)
• Convenient eligibility conditions
• Additional Optional riders
PROVIDED BY LIFE INSURANCE COMPANIES

Life Insurance – Trends


• Monopoly of one single company so far
• Increasing popularity amongst employers/ employees
• General cover is about 3 to 5 times the gross annual salary
• Companies with huge staff strength opt for profit-sharing
Leave Encashment –Defined benefit

 For whom?
– If company offers encashment of leave, all employees
 What benefit?
– Will be based on the company policy.
– Normally x days salary for each accumulated day of
leave
 How Funded?
– Institute of Chartered Accountants of India require
that a provision be made for the liability.
– No special tax benefits for self-funding through a trust
– Insurance plans available to manage the funds
Gratuity – Defined Benefit
 For whom?
– Engaged in Factories, Mines, Plantations, Railways,
Shops and establishments notified by Government
– In service for 5 successive years
 What benefit?
– 15 days wages for each year of service
– Maximum limit Rs 3,50,000/
– 7 days wages per season for seasonal occupation
 How Funded?
– Can be funded our unfunded.
– Special tax concessions if funded through a trust or
insurance company
Superannuation – Defined Contribution/ benefit

 For whom?
– Non-mandatory, defined by company policy
 What benefit?
– Can be defined benefit(certain formula of last drawn
salary) /defined contribution(certain %age of salary
every month contributed to a fund)
– Can be different for different grades
 How Funded?
– Can be funded our unfunded.
– Special tax concessions if funded through a trust or
insurance company
Retirement Benefits - Trends
• Only one life insurance company in the market till 2000

• Offered a cash-accumulation conventional scheme

• More and more companies now funding through Insurance

• Unit-linked – a preferred platform

• Pensions benefits - from Defined Benefit to defined contribution


HDFC STANDARD LIFE INSURANCE

HDFC SL is Insurope’s network partner in India


Employee Benefits – Insurance Co’s viewpoint

Employee Benefits

Insuranc Retireme
e nt
Accide Mediclai Leave Superannuat
Life
nt m Encashme ion
nt
Gratuity

Defined
Defined
Contributi
Benefit
on
Employee Benefits – Insurance Co’s viewpoint

Employee Benefits

Insuranc Retireme
e nt
Accide Mediclai Leave Superannuat
Life
nt m Encashme ion
nt
Gratuity

Defined
Defined
Contributi
Benefit
on
Contact Details
Sanjeev Kapur
Head - Group Sales
• (+91) 98203 48755
• Sanjeevk@hdfcinsurance.com

Vijay Vaidyanathan
Manager – Group Sales
• (+91) 98206 11998
• vijayv@hdfcinsurance.com

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