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Pondicherry jeweller seeks Rs 500 million risk cover

Sidhartha

The Life Insurance Corporation of India has received an application for a Rs 500-million Jeevan Shree cover, which, if approved by the reinsurer, will make it the largest life insurance cover sold by the state-owned insurer.

The proposal from a Pondicherry-based jeweller was put forward last month through a Mumbai-based LIC development officer and some agents.

The policy will involve a quarterly premium of Rs 1.25 crore, with a premium payment period of 10 years. On maturity after 15 years, the insured will receive Rs 1.08 billion.

Sources said LIC had approached Swiss Re to provide reinsurance cover to the policy and a final decision from the reinsurer was awaited.

According to norms, LIC provides a life insurance cover based on the insured's income. On an average, the sum assured is 10-15 times the annual income of the insured.

N C Sharma, managing director of LIC, refused to comment on the issue. "Till a policy is actually cleared, it has not been sold," he said.

Film-maker Subhash Ghai holds the distinction of having the largest insurance cover of Rs 180 million he purchased a couple of years ago. Sharma said some people had higher sum assured than Ghai but they had not bought the entire cover at one go and had purchased more than one policy.

If the Rs 500 million proposal is approved by the reinsurer, it will eclipse the Rs 150 million cover purchased by a Mumbai-based businessman under Jeevan Shree. The Mumbai-based businessman had proposed to buy an insurance cover of Rs 200 million, but following the reinsurer's decision, he had to buy a Rs 150-millon 'keyman' policy.

In 2001-02, this was the single largest policy sold by LIC.

Amitabh Bachchan holds the distinction of putting forward the proposal for the largest insurance cover. A few years ago, Bachchan had approached LIC through H P Singh, a Delhi-based development officer, to purchase a life insurance cover of Rs 150 million, with a premium payment of Rs 1.734 million a month.

The proposal was turned down because the controversy surrounding the Amitabh Bachchan Corporation had erupted around the time.

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