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 & Bonus

Employee Benefits

Employee Benefits Insurance Cos viewpoint

Employee Benefits
Insurance Accident Mediclaim Life Retirement

Leave Encashment

Superannuation

Gratuity

Defined Benefit

Defined Contribution

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 Insuropes network partner in India

Employee Benefits Insurance Cos viewpoint

Employee Benefits
Insurance Accident Mediclaim Life Retirement

Leave Encashment

Superannuation

Gratuity

Defined Benefit

Defined Contribution

Employee Benefits Insurance Cos viewpoint

Employee Benefits
Insurance Accident Mediclaim Life Retirement

Leave Encashment

Superannuation

Gratuity

Defined Benefit

Defined Contribution

Contact Details
Sanjeev Kapur Head - Group Sales
(+91) 98203 48755 Sanjeevk@hdfcinsurance.com

Vijay Vaidyanathan Manager Group Sales

(+91) 98206 11998 vijayv@hdfcinsurance.com