‘Big response to govt’s low-cost insurance schemes’

The low-premium life and accident insurance schemes introduced by the government recently have elicited huge response, attracting 11 crore subscribers in just three months.

This is perhaps the biggest-ever response to any insurance scheme and also provides a clue to the road ahead in spreading insurance, TS Vijayan, Chairman, Insurance Regulatory and Development Authority of India, told BusinessLine here.

In May, the Centre had launched two low-cost insurance schemes, Jeevan Jyoti Bima Yojana and Jeevan Suraksha Bima Yojana, to provide life and accident cover of ₹2 lakh for a premium of ₹330 and ₹12 per annum, respectively.

IRDAI Executive Director Sriram Taranikanti said the success of the schemes, besides the low premium, was the result of effective publicity, and significant involvement of banks and other stakeholders.

“We are pushing for increased use of the electronic platform and a hassle-free marketing/sales procedure to attract people. Micro insurance policies, coupled with digital technology, will bring down costs,” he said.

The financial-inclusion drive through the Pradhan Mantri Jan Dhan Yojana (PMDJY) has also served as an effective platform to extend policies to customers. For example, while 17.45 crore basic bank accounts were opened under the programme, most customers also subscribed to the insurance cover.

R Athmaram, Executive Director, Bank of Maharashtra, said there is still scope for better performance. “If you compare with PMJDY, much can still be done. I believe the subscriber base will improve significantly for next year,” he added.

Insurance penetration in India, IRDAI data shows, is 3.9 per cent of GDP, much lower than the world average of 6.3 per cent.