Business Insurance

Protect the People Who Drive
Your Business Forward

Two powerful plans every Indian business owner needs to know — Keyman Insurance to safeguard your company's most critical asset, and Group Health to attract and retain your best talent.

✓ 100% Tax Deductible Premiums
✓ IRDAI Regulated Plans
✓ Corporate Group Discounts
✓ Cashless Nationwide Network
🔑

Keyman Insurance

A life insurance policy taken by a business on the life of its most valuable employee or owner — because losing a key person can derail even the most successful company.

What is Keyman Insurance?

A Keyman (or Key Person) Insurance policy is a life insurance plan where the company is the policyholder and premium payer, the key employee is the life insured, and the company is the beneficiary. If the key person dies or becomes permanently disabled during the policy term, the company receives the sum assured — providing the financial runway to recover, recruit, and rebuild.

The "key person" is typically a founder, co-founder, CXO, top salesperson, lead developer, or any individual whose loss would materially impact the business's revenue, operations, or goodwill.

💰 Tax Benefits — A Complete Breakdown

1
Premium is 100% deductible as a Business Expense
Under Section 37(1) of the Income Tax Act, premiums paid by the company for Keyman Insurance are treated as an ordinary business expenditure — fully deductible from the company's taxable income. There is no upper limit on this deduction.
2
Sum Assured received is Taxable to the Company
The death/disability claim received by the company is treated as a business receipt under Section 28 and is taxable. However, the net tax cost is greatly reduced by the deduction of premiums paid over the years — making the effective tax position favourable.
3
No Tax Benefit for the Key Employee
Since the company pays the premium (not the individual), the employee cannot claim Section 80C deduction. However, the premium is not treated as a perquisite in the employee's hands — confirmed by CBDT circulars.
4
Assigned Keyman Policy — Individual Tax Treatment
If the company assigns (transfers) the policy to the key person on retirement or resignation, the maturity proceeds may be tax-free in the individual's hands under Section 10(10D), subject to conditions — a powerful exit benefit planning tool.

Key Features & Benefits

  • ✓Compensates the company for loss of revenue, profits, and goodwill caused by the key person's absence
  • ✓Funds the cost of hiring, training, and onboarding a replacement — which can run into ₹20–50 Lakh for senior roles
  • ✓Provides working capital buffer during the transition period (typically 12–24 months)
  • ✓Reassures lenders, investors, and board members — often required by PE/VC investors and banks as loan covenant
  • ✓Available as Term Life, Endowment, or ULIP underlying policy — company chooses based on objectives
  • ✓Coverage available for multiple key persons under separate policies
  • ✓Sum assured can be linked to the key person's salary multiple, profit contribution, or loan liability
  • ✓Premium-paying flexibility: single pay, limited pay, or regular pay
How Much Cover?

Industry thumb-rule: 5–10× the key person's CTC. For a founder/CEO, some businesses insure up to 20× given the irreplaceable nature of the role.

Who Qualifies as "Key"?

Founders, co-founders, CXOs, revenue-driving sales heads, technical leads, key client relationship managers — anyone whose loss materially impacts business continuity.

Loan Collateral

Banks and NBFCs increasingly mandate Keyman cover as a condition for business loans above ₹50 Lakh. The policy is assigned to the lender as collateral security.

PE/VC Requirement

Most private equity and venture capital term sheets include a condition requiring Keyman Insurance for founders as a pre-disbursement closing condition.

Which Businesses Need Keyman Insurance?

✓ Startups & funded companies ✓ Family-owned businesses ✓ Professional services firms ✓ SMEs with bank loans ✓ Manufacturing companies ✓ IT and tech companies ✓ Partnership firms ✓ LLPs and Pvt Ltd companies

Exclusions

  • ✕Death by suicide within the first year of the policy
  • ✕Pre-existing conditions not disclosed at policy inception
  • ✕Death due to participation in war, invasion, or nuclear events
  • ✕Fraudulent misrepresentation in the proposal form

Frequently Asked Questions

Can a sole proprietor take Keyman Insurance on themselves? +
Yes. A sole proprietor can insure their own life under a Keyman policy with the business as beneficiary. The business entity pays the premium and claims the tax deduction. However, IRDAI guidelines require the policy to demonstrate an "insurable interest" — i.e., the business's financial viability must depend on the insured person.
What happens when the key employee leaves the company? +
The company can (a) surrender the policy and receive the surrender value, (b) continue the policy if another key person is identified (with insurer approval), or (c) assign the policy to the departing employee as a retirement/resignation benefit — in which case the individual takes over premium payment and may receive maturity benefits tax-free under 10(10D).
Is there a medical examination required? +
For sum assured above ₹50 Lakh, most insurers require the key person to undergo a medical examination. For lower amounts, a medical questionnaire and financial underwriting (audited financials) is typically sufficient.
How does financial underwriting work for Keyman policies? +
The insurer assesses the key person's contribution to the company's profits using audited financial statements. Typically, the sum assured is capped at 10× the key person's contribution to EBITDA or 5× their CTC — whichever is higher. Larger covers need CA-certified financials.
Can a partnership firm take Keyman Insurance on a partner? +
Yes. Partnership firms regularly insure the lives of key partners. In such cases, the firm pays the premium, deducts it as a business expense, and uses the claim proceeds to fund a buyout of the deceased partner's share — a practice called a "buy-sell agreement" funded by insurance.

Keyman Cover Calculator

Estimate the right sum assured for your key person

₹
₹50,00,000 per year
₹
₹1,00,00,000 per year
5 yrs30 yrs
Recommended Keyman Cover
—

* Based on CTC multiple and profit contribution method. Subject to insurer's financial underwriting.

🏥

Employee Group Health Insurance

A single policy covering all your employees — and their families — for hospitalisation, day-care, and critical illness. The single most valued employee benefit in India today.

Why Group Health Insurance Matters

In a Deloitte survey, health insurance ranked as the #1 most valued employee benefit across all age groups in India — ahead of bonuses, flexible hours, and even salary increments. A well-structured Group Mediclaim policy signals that your company genuinely cares about its people.

Unlike individual retail policies, group health insurance has no waiting period for pre-existing diseases, covers maternity from Day 1 (optional), and can extend to parents, parents-in-law, and dependents — making it one of the most comprehensive employee benefits available.

💰 Tax Benefits — Employer & Employee

1
Employer: 100% Premium Deductible as Business Expense
Premiums paid by the employer for Group Health Insurance are fully deductible under Section 37(1) as a business expense — no upper limit. A ₹50 Lakh annual premium saves a company in the 25% tax bracket approximately ₹12.5 Lakh in tax.
2
Employee: Premium Not Treated as Perquisite (if employer pays)
Group health premiums paid entirely by the employer are not a taxable perquisite for the employee under Rule 3(7)(ix) of the Income Tax Act. The employee receives the full benefit at zero personal tax cost.
3
Employee: Section 80D Deduction on Top-Up Premium
If the employee pays for additional top-up coverage or dependent parents' coverage, they can claim Section 80D deduction of up to ₹25,000 (₹50,000 for senior citizen parents). This is over and above the employer-funded base cover.
4
Voluntary Benefits: Salary Sacrifice Structure
Employees who opt for higher coverage tiers (e.g., covering parents) can fund the incremental premium through a salary sacrifice arrangement — which may reduce their taxable salary and deliver a tax-efficient benefit.

What's Covered — Standard & Optional

  • ✓
    In-patient Hospitalisation — Room, ICU, surgery, doctor fees, nursing, anaesthesia — all covered from Day 1, with no waiting period for pre-existing diseases
  • ✓
    Pre & Post-Hospitalisation — 30 days pre and 60–90 days post-hospitalisation expenses covered
  • ✓
    Day-Care Procedures — 500+ listed day-care procedures that don't require 24-hour hospitalisation
  • ✓
    Maternity Cover (Optional) — Normal and caesarean delivery with newborn cover from Day 1. No waiting period in group policies
  • ✓
    OPD & Preventive Care (Optional) — Doctor consultations, diagnostics, and annual health check-ups
  • ✓
    Mental Health Cover — Inpatient psychiatric treatment covered as per Mental Healthcare Act 2017
  • ✓
    AYUSH Treatment — Ayurveda, Yoga, Unani, Siddha, Homeopathy — covered in most group plans
  • ✓
    Family Coverage — Extend to spouse, children, parents, and parents-in-law under a single group floater
  • ✓
    Cashless at 10,000+ Hospitals — Nationwide cashless network, no out-of-pocket expense at network hospitals
  • ✓
    Employee Assistance Programme (EAP) — Mental wellness, counselling, and wellness sessions increasingly bundled
0
Waiting Period for PEDs

Group health policies have no waiting period for pre-existing diseases — Day 1 cover for conditions like diabetes, hypertension, and thyroid.

7
Minimum Employees

Most insurers require a minimum of 7 employees for a group policy. Some insurers offer micro-group plans for 5+ employees.

40%
Premium Savings vs Retail

Group health premiums are typically 35–45% lower than equivalent individual retail policies due to risk pooling across the employee base.

80D
Tax Deduction Available

Employees paying for parent coverage get ₹25K–₹50K additional 80D deduction, over and above employer-funded base cover.

Which Companies Should Have Group Health Cover?

✓ Any company with 7+ employees ✓ IT & tech companies (talent war) ✓ Startups building culture ✓ Manufacturing with blue-collar workforce ✓ Professional services firms ✓ Retail chains with distributed workforce ✓ NGOs and non-profits ✓ Educational institutions

Exclusions (Standard Group Policy)

  • ✕Cosmetic, aesthetic, or obesity-related treatments (unless medically necessary)
  • ✕Dental treatment (unless accident-related) — available as separate add-on
  • ✕Vision correction (spectacles, contact lenses) — available as add-on
  • ✕Self-inflicted injury, substance abuse-related hospitalisation
  • ✕Experimental or unproven treatments not listed by IRDAI
  • ✕War, nuclear risks, or civil commotion-related injuries

Frequently Asked Questions

Can employees continue coverage after leaving the company? +
IRDAI's portability guidelines allow employees to port their group coverage to an individual retail policy within 30 days of leaving employment — retaining credit for waiting periods already served. However, the retail premium will be higher than the group rate. Many companies now offer COBRA-style continuation as an employee benefit.
How are new employees added mid-year? +
New employees (and eligible dependents) are added to the group policy on their date of joining with a pro-rated premium for the remaining policy year. The process is typically managed through the insurer's HR portal or through your insurance broker — same-day addition is standard with most insurers.
What is the difference between a floater and individual sum insured? +
An Individual Sum Insured (ISI) gives each covered person their own separate cover amount — a ₹5L ISI means each person has ₹5L independently. A Family Floater gives the family a shared pool (e.g., ₹5L shared across 4 people). ISI is more expensive but significantly better for families with elderly parents or members with chronic conditions.
What is a Top-Up / Super Top-Up in a group policy? +
A Top-Up plan kicks in once the base sum insured is exhausted. If your group policy provides ₹5L and an employee needs ₹8L for a hospitalisation, a ₹10L top-up (with ₹5L deductible) would pay the remaining ₹3L. Top-ups are extremely cost-effective and recommended for companies that want comprehensive coverage without a large base premium increase.
Is maternity cover mandatory in a group policy? +
No, it's optional — but highly recommended, especially for companies with a significant percentage of employees in the 25–35 age bracket. Maternity cover in a group plan has no waiting period (unlike individual retail plans which require 2–4 years) and typically covers ₹50,000–₹1,50,000 for normal and C-section deliveries, plus newborn cover from Day 1.

Group Health Premium Estimator

Estimate annual premium for your employee group

Estimated Annual Group Premium
—

* Indicative estimate based on market rates. Actual premium depends on claims history, insurer, and underwriting. Group discounts apply for 50+ employees.

Ready to protect your business and your people?

Our IRDAI-certified advisors work with 20+ insurers to get you the best coverage at the most competitive premium. No obligation, no pressure.