New directive aims to raise access of marginalised and low-income groups to both life and non-life insurance products
People can now purchase insurance policies by paying an annual premium fee of as little as Rs 150, as the insurance sector regulator has introduced the long-awaited Micro Insurance Directive.
Insurance Board came up with the directive to raise access of marginalised and low-income groups to both life and non-life insurance products.
Among non-life micro-insurance products that insurers can float, accident micro-insurance product with coverage of up to Rs 150,000 can be fetched for as little as Rs 150. This means those who have paid annual premium fee of Rs 150 will be entitled to compensation of up to Rs 150,000 per year in case they get into accidents.
Similarly, household micro-insurance products with coverage of up to Rs 200,000 can be bought upon paying annual premium of up to Rs 500. Likewise, family health micro-insurance products, which provide coverage of up to Rs 35,000 for households of up to five members, can be purchased upon depositing annual premium of up to Rs 1,400.
“We hope these relatively cheaper products will provide some social security cover to the poor. This is expected to reduce financial burden on low-income groups, as they do not have to fret a lot even if they meet with an accident or fall sick,” a senior official of the Insurance Board said.
The insurance sector regulator has also allowed non-life insurers to float micro-insurance policies to cover crop, livestock and poultry farming. Livestock and poultry micro-insurance products that provide coverage of up to Rs 150,000, for instance, can be fetched for up to Rs 7,500, while crop insurance with coverage of up to Rs 50,000 can be purchased for up to Rs 2,500.
However, it is not yet known whether these micro-insurance products on crop, livestock and poultry will be eligible for 75 per cent subsidy extended by the government.
The government had offered 50 per cent subsidy on crop, livestock and poultry insurance policies in the last fiscal year. The subsidy was raised to 75 per cent of the premium amount this fiscal.
“Since the government policy does not mention whether this scheme also applies to micro-insurance policies, we have not been able to take a decision on the issue. We will clarify this matter soon,” the official said.
Among others, life insurance firms can introduce term life and endowment policies with coverage of up to Rs 150,000 and Rs 100,000, respectively.
75pc subsidy to be granted
KATHMANDU: The government has agreed to provide 75 per cent subsidy on premium cost of crop, livestock and poultry insurance policies that provide coverage of over Rs 10 million. Earlier, single individual and firm that bought insurance policies with coverage of over Rs 10 million were barred from enjoying the facility on subsidy. “We received a letter from Ministry of Agricultural Development (MoAD) on Tuesday which said subsidy should be granted to all types of crop, livestock and poultry insurance policies regardless of the coverage amount,” a senior Insurance Board official said. Meanwhile, MoAD has said that insurance policies on crop, livestock and poultry should cover ostrich farming. Earlier, ostrich farmers were not eligible for the subsidy, although such grants were extended other poultry farmers.
source: the himalayan times,17 sept 2014
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