LIC's biggest individual deal

Shishir Arya / TNN / Apr 11, 2008, 03:46 IST

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A Nagpur-based businessman has entered into a deal with Life Insurance Corporation (LIC) for an insurance cover of around Rs 77 crore.

NAGPUR: This is yet another big bucks and small town story. In what is being billed as the mother of all insurance covers, a Nagpur-based businessman has entered into a deal with Life Insurance Corporation (LIC), for an insurance cover of around Rs 77 crore. This includes a keyman insurance policy of Rs 72 crore, while the remaining is personal insurance cover. This is being termed as the highest ever keyman policy ever given by the public sector insurance behemoth, and perhaps the entire industry.
Under keyman insurance, a person who is of vital importance to a business concern is insured. In case of the person's death the firm gets the insured amount.
Filmmaker Subhash Ghai had shot into the news after procuring a keyman insurance cover of Rs 18 crore some time back. The highest keyman insurance until now was Rs 51 crore, in a deal by a Rajasthan-based individual, whose name has not been disclosed.
LIC has remained tight-lipped in this case too. It was maintained that the name cannot be disclosed owing to business secrecy. However, at the same time, LIC's senior divisional manager Partha Samal confirmed the insurance deal.

Being a high-value deal, the LIC has entered into a re-insurance agreement with Zurich-based re-insurer, Swiss Re. With this arrangement, in case LIC has to pay out the claim in the event of the person's death, Swiss Re will bear some of the payout.
Man to pay Rs 27 lakh as premium
The Orange City has got some recognition as a businessman from the city has taken a keyman insurance policy of Rs 72 crore. But the going was not all that easy. It was after hectic parleys between the person getting the insurance, the LIC and Swiss Re that the deal was finalised, said sources. Sources informed that the businessman is around 50 years of age, has business interests in Nagpur and abroad, and his company is part of key infrastructure projects in India.

The premium for this keyman insurance policy of Rs 72 crore is around Rs 27 lakh per year for fifteen years. Keyman insurance is provided through term assurance policy, under which premium is not paid back, unless death occurs.
The firm owned by this businessman is also in parleys with LIC for another keyman cover worth Rs 57 crore for another official, said a source.

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