The Indian law states that insurance companies should be accommodative of persons in the rural sector or social sector, persons in the economically vulnerable or backward classes of the society, workers in the unorganised or informal sector etc. (as specified by the IRDA). In the Insurance Act, 1938, sections 32-B and 32-C is where this particular law can be found. It defines the percentage of business that insurance companies are expected to put aside for the persons in the categories mentioned above. Further, the IRDA has tried to accommodate the two sections of the Insurance Act by making it compulsory for insurers who offer general insurance to support business in the rural sector as well. The IRDA has specified a minimum of 2% of total gross premium during the first financial year, a minimum of 3% of gross premium in the second financial year and a minimum of 5% of the gross premium in the third and additional financial years. The plan must include insurance for crops.
Various programmes have been launched by the Government of India for the benefit of marginal farmers, small farmers, agricultural labourers, etc. Integrated Rural Development Programme (IRDP) have integrated these programmes since 1980 with the help of funding from the Central and State governments.
The main objective of the programme is to make sure that the rural families involved are provided with working capital and assistance in the form of income generating assets, etc. Institutional credit, subsidy etc. will be offered for the same purpose. The beneficiaries of IRDP projects will be protected with the special insurance schemes. The policies come with reduced rates of premium and simplified procedures for claims.
Rural Policies:
The following can be insured under Rural policies:
Eligibility:
According to the IRDA, Rural sector can only be defined as such only if it fills the following categories (according to the last census):
Sum Insured:
The market value of cattle may differ according to the breed, time and area. A qualified veterinarian recommends the sum insured based on the particular animal's market value. Security of the animal is based on market value or sum insured, whichever is less. For scheme animals, the policy is issued as agreed value policy and claims are settled for 100% of sum insured.
Premium:
The premium rates are higher for non-scheme animals than for scheme animals. This mainly includes crossbred/ indigenous animals. Exotic animals will be charged higher rates. Long-term discounts and group discounts are available. In case of adverse claims experience, there is a possibility of increasing the renewal premium.
Coverage for the Cattle policy includes the following:
Death due to:
Disability (PTD) may be covered if the policy holder opts to pay an extra premium:
The following will not be covered in the insurance:
If it is found that the cattle have been through any of the following, then the insurer will not cover the cost:
Special conditions:
If the insured animal dies, the policy holder must immediately intimate the news to the insurer. He/ she must also provide the insurer with the duly-filled claim form, Death Certificate from a qualified veterinarian, Post-mortem examination report (if the company requires it), Ear Tag of the animal and also must make sure that the value of the animal has been established as required.
Following is a list of bodies that offer Rural Insurance in India. This is not a complete list, but merely an indication of the options that one has when it comes to Rural Insurance:
HDFC Life
ICICI Lombard
Cholamandalam Investment & Finance Company Limited
IndusInd Bank Limited
Dharmapuri District Central Co-operative Bank
Central Bank of India
Ministry of Labour, Govt of India
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