The government has increased the existing limit of the Employees Deposit Linked Insurance amount from Rs 60,000 to Rs 1,00,000. The amount will be paid to the next of kin of an employee in case of his death. 
In a notification issued on June 18, the government in the newly modifed Employees' Deposit Linked Insurance (Amendment) Scheme, 2010, said the benefits will be for employees of both the public and private sector.
The government said if an employee who is a member of the Employees Provident Fund Organisation or a provident fund exempted under Section 17 of the Act dies, the persons entitled to receive the PF amount will get an additional amount equal to the average balance in the employee's PF account in the last 12 months, if it is less than Rs 50,000.
However, if the amount exceeds Rs 50,000, the relative will be paid 40 per cent of the excess amount, not exceeding Rs 1,00,000. For example, if the balance was Rs 1,00,000, the amount paid will be Rs 50,000 (Rs 1,00,000 minus Rs 50,000) plus 40 per cent of Rs 50,000 (Rs 20,000). The total in this case would be Rs 70,000 over and above the account balance.
The insurance amount, however, would fall if the average balance is higher. For example, if the amount is Rs 2,00,000 the relative would get Rs 50,000 plus 40 per cent of Rs 1,50,000 (Rs 2,00,000 minus Rs 50,000). The total in this case would be Rs 1,10,000. But the relative of the deceased will get Rs 1,00,000.
Earlier, an EPFO subscriber or member of a provident fund approved under Section 17 would get an insurance cover up to Rs 60,000, in case he/she died.
Source - http://business.rediff.com/report/2010/jul/08/death-payout-in-employees-insurance-raised.htm
The new guidelines for unit linked insurance plans (ULIPs) have evoked a mixed reaction dividing the life insurance industry, with insurance giant Life Insurance Company of India (LIC) on one side and the private companies on the other. CNBC-TV18 learns that the industry is also likely to voice its concerns on some of the guidelines to the insurance regulator on two accounts. CNBC-TV18’s Avni Raja reports.
The insurance industry is a divided lot. The 4.5% minimum guarantee on pension products seems to be a sticky issue. While the largest players, LIC says that offering a 4.5% guarantee on pension products is not difficult.
But private players insist that it is just not possible.
Kamesh Goyal, Managing Director and Chief Executive Officer of Bajaj Allianz Life, says “If you look at interest rate scenarios which we had in our country about a year back, wherein you had to give 4.5% returns for 30 years, from our company’s perspective, I would never ever be able to justify the risk which the company will have to take for offering such a high guarantee.”
Experts say that this guaranteed return will mean that majority of the corpus will have to invested largely in debt, which will result in reduction in yield over the long term.
Sanjiv Bajaj, Joint Managing Director, Bajaj Capital, says, “What that will do is that a lot of pension money which could have also gone into equity and if a person is planning to have a pension after 30 years it makes more sense for him to be invested in equity, will now be invested more in debt. So that will result in reduction in his yield over a long period.”
CNBC-TV18 learns that the life insurance council is likely to take up this issue on behalf of the industry and will also seek an extension of the September-1 deadline that it currently has to adhere to, because two months is not enough time for a complete overhaul of the ULIP portfolio.Source - http://www.moneycontrol.com/news/cnbc-tv18-comments/ulips-get-makeover-leaves-insurance-industry-divided_467002.html
