What is Key man Insurance:

Key man insurance is taken by a business firm on

the life of key employee(s) to protect the firm against financial losses, which may occur due to the premature demise of the Key man. Key man insurance is also referred to as key person insurance or key employee insurance.

 Anybody with specialized skills, whose loss can cause

a financial strain to the company are eligible for Key man Insurance. For example, they could be: Directors of a Company Key Sales Person Key Project Managers People with Specific Skills etc.

 The objective of key man Insurance is to protect the

company from the adverse financial effect by the Key Employee or Key Directors death by making funds available to the company in his absence. The companys progress and profit, usually depends upon the vital decision or technical expertise skill, knowledge, entrepreneurial vision of its Key Director or Key Employee, particularly in this competitive Globalised marketing Environment.

 Today companies expansion diversification, and

setting up policy depends upon its far sighted vision, decision, technical know-how of the Key Director and Key Employee and thats required to be secured by purchasing Key man Insurance for making funds available for promoting, recruiting in the absence of Key-man. This policy is specially purchased by the company (both Pvt. and Ltd. Companies.) for the life of its most important Key person.

 Insulate the risk of financial loss against loss of a Keyman. Premiums paid under key man insurance may be fully allowed

as Business Expenses under Section 37(1) of the Income Tax Act, 1961, subject to satisfaction of the assessing authority. Interest on loans taken against a key man insurance policy may also be allowed as business expenses. Premiums paid by the company on the life of a keyman would not be treated as perquisites in the hands of such a keyman when the companys request is accepted by the assessing authority. Key man Insurance policy is a positive measure to improve the retention of the key man in the company.

 The key man insurance (KMI) is allowed to the

employee, if he satisfies the following condition; The keyman should hold less then 51% shares of company. The total number of shares of the company held by the keyman and his family should be less then 70% The keyman should be literate.

 Key-mans qualification.
Experience in different fields. Previous record and service period in the

organization. Is he the only key-man in the specific field or otherwise?

 In case of S.B. is payable under the plans, will be

considered as the business income of the company & will be taxable under section 28 (vi) of the income tax ACT. Under section 31(1) of the income tax Act the premium paid under key man insurance can be claimed by corporate entities as bonafide business expenses. If the policy has been assigned to the key man, the policyproceeds including bonus will be taken as profit under section 17 (clause) of the income tax Act. If the director of the company is the assignee under the key man policy, it will be taken as income from other sources and will be taxable according to the section 56 (2ic) of the income tax Act.

 ANMOL JEEVAN-I
Anmol Jeevan-I is a pure term cover provides only life cover

unlike endowment and money back policies which have a built-in saving element too.

On Maturity no amount will be paid to the Policyholder.

On death of the Policyholder during policy term, S.A. will be paid to the nominee.
INCOME TAX REBATE The premium paid towards Anmol Jeevan-I is eligible for tax deduction under

section 80C of the Income Tax Act,1961.

 ELIGIBILITY CONDITIONS AND RESTRICTION:Minimum Age at entry: 18 years (completed) Maximum Age at entry: 55 years (nearest birthday) Maximum Age at maturity: 65 years (nearest birthday) Policy Term: 5 years to 25 years Minimum Sum Assured: Rs.5,00,000/Maximum Sum Assured: Less than 25,00,000 /-

EXAMPLE:Mr. LIC takes a policy for 20 years for Rs.20 lakh sum assured. (a) On survival till maturity, Mr. LIC will not receive any amount. (b) On death of Mr. LIC during policy term, his nominee will get Rs.20 lakh S.A.

 Amulya Jeevan 1(Plan No. 190) is a Term Assurance

plan with minimum Sum Assured of Rs.25 lakh. On Maturity no amount will be paid to the Policyholder. On death of the Policyholder during policy term, S.A. will be paid to the nominee, provided the policy is kept in force. The premium paid towards Amulya Jeevan 1 is eligible for tax deduction under section 80C of the Income Tax Act,1961.

 ELIGIBILITY CONDITIONS AND RESTRICTION:Minimum Age at entry: 18 years (completed) Maximum Age at entry: 60 years (nearest birthday) Maximum Age at maturity: 70 years (nearest birthday) Policy Term: 5 years to 35 years Minimum Sum Assured: Rs.25,00,000/Maximum Sum Assured: No Upper Limit Grace Period: 15 days Example: Mr. LIC takes a policy for 25 years for Rs.50 lakhs. (a) On survival till maturity, Mr. LIC will not receive any amount. (b) On death of Mr. LIC during policy term, his nominee will get Rs.50 lakh S.A.

PRODUCT FEATURES: Minimum / Maximum Age at Entry : 18 Years to 60 Years Term : 5 Years to 25 Years or Retirement age, whichever is earlier, choice

of Increasing Sum Assured @ 5% p.a. or Level Cover

Mode of Payment : Single Premium or Regular Premium (no monthly

mode available)

Minimum (Per Life Assured):

SBI Life - Shield Plan: Rs. 10, 00,000/-

Maximum Sum Assured (Per Corporate):

No Maximum Sum Assured limit, however the quantum of cover would be based on the following parameters, underwriting requirements and the maximum Sum Assured should be LOWER of :

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