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LIC - 1 Janashree Bima Yojana

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The objective of the scheme is to provide life insurance protection to the rural and urban poor persons below poverty line and marginally above the poverty line.

A person who is
*Aged between 18 and 59 years.
*Below or marginally above poverty line
*A member of any of the approved vocation/occupation groups

A State Government Department which is concerned with the welfare of any such vocation/occupation group, a Welfare Fund/ Society, Village Panchayat,NGO,Self-Help Group,etc.

Twenty five.


1. Claim form & discharge receipt under JBY ( Annexure A )

2. Application for scholarship under Shiksha Sahayog Yojana ( Proforma A )

3. List of students eligible for scholarship under Shiksha Sahayog Yojana ( Proforma B)

4. Certificate of utilisation ( Proforma C )



    The Prime Minister, Shri Atal Bihari Vajpayee is dedicating to the nation the "Janashree Bima Yojana" here tomorrow. This Bima Yojana was announced by the Finance Minister, Shri Yashwant Sinha while presenting the Budget for 2000-01. This insurance policy will provide life insurance cover to people belonging to the weaker sections of the society.

    This scheme is targeted at the urban and rural poor who live below or marginally above the poverty line. The Social Security Fund set up by the Government of India will bear 50% of the total annual premium of Rs.200/-, while the rest will be borne by the individual member/Nodal Agency. In the event of the unfortunate death of the policy holder due to natural causes a sum of Rs.30,000/- is payable to the beneficiary. In case of accidental death or permanent disability, the benefit is enhanced to Rs.75,000/- and in case of partial disability, the policy holder gets Rs.37,500/-. An important feature of the scheme is that the benefit in the above three eventualities is more than what is currently being offered under any existing social security scheme. It is expected that the identification and notification of the vocational groups that can benefit from this scheme will not be so rigid and all efforts will be made to bring more and more people under the insurance umbrella.

    Janashree Bima Yojana to be administered by Life Insurance Corporation of India will be yet another milestone in the efforts towards the betterment of the poor and the under-privileged and is expected to benefit six crore persons.


  • Persons between 18 years and 60 years of age.
  • In addition to persons below the poverty line, even persons marginally above the poverty line may be covered.
  • The groups will be identified and notified by LIC in consultation with the Nodal Agency.
  • Minimum Members of the group would be 25.


  • In the event of death of the member, the assured sum of Rs.30,000 will become payable to the nominee.
  • In the event of death by accident or partial/total permanent disability due to accident the following benefits will be payable.
  • On death due to accident: Rs.75,000
  • Permanent total disability due to accident: Rs.75,000
  • Loss of two eyes or two limbs or one eye and one limb in an accident: 75,000.
  • Loss of one eye or one limb in an accident: Rs.37,500


  • Initially Rs.200/- per member per annum.
  • 50% of the premium to be paid by members/Nodal Agency/State Govt.
  • The balance 50% of the premium will be borne by the Social Security Fund.
  • Experience Rating Adjustment will be allowed after 3 years on the basis of claim experience, if the group is of minimum 2000 members. If the claim experience is adverse, LIC may revise the premium rates.

    Nodal Agency

  • Nodal Agency will mean Panchayats, NGOs, Self-Help Groups or any other institutionalized arrangements.
  • The Nodal Agency will act for and on behalf of the insured members in all matters relating to the Scheme.

    Claim procedure

    Claim procedure is simple. The beneficiary of the deceased member will be required to furnish the original death certificate to the Nodal Agency which will forward the same alongwith the claim form, to LIC i.e., the Branch which is servicing the scheme. LIC will settle claims by sending account payee cheques directly to the beneficiaries. In case of death by accident, a police inquest report/post mortem report is also to be submitted. The existing schemes at the time of renewal will have the option to switch over to the new scheme on revised terms and revised benefits. The schemes will be administered through pension and Group Schemes Department of LIC of India.







1. Social Security Group Insurance Schemes

3.1 The Social Security Fund (SSF) was set up in 1988-89 for providing social security through group insurance schemes to the weaker and vulnerable sections of the society. Subsequently, Social Security Group Insurance Schemes were launched by LIC. The purpose of these schemes was to provide life cover at subsidized rate to the socially and economically backward sections. These schemes provided a sum upto Rs.5000/- on death with accident benefit of Rs.25,000/-. Persons belonging to the following 24 approved occupational groups were covered under the scheme :-

Sr. No. Occupation

1. Beedi Workers

2. Brick Kiln workers

3. Carpenters

4. Cobblers

5. Fisherman

6. Hamals

7. Handicraft artisans

8. Handloom weavers

9. Handloom and Khadi weavers

10. Lady Tailors

11. Leather and Tannery workers

12. Papad workers attached to ‘SEWA’

13. Physically Handicapped Self Employed Persons

14. Primary Milk Producers

15. Rikshaw Pullers/Auto Drivers

16. Safai Karmacharis

17. Salt Growers


18. Tendu Leaf Collectors

19. Urban Poor

20. Forest workers

21. Seri Culture

22. Toddy Tapers

23. Powerloom workers

24. Hilly Area women

3.2 The Scheme was frozen and replaced by Janashree Bima Yojana from 10th August, 2000. Thereafter only renewal of groups covered earlier is allowed.

3.3 During the period since the instruction of JBY, LIC has identified and approved 19 more groups for their eligibility in addition to above mentioned 24 occupational groups approved under Social Security Schemes.

Sr. No. Occupation

1. Food stuffs as Khandsari/Sugar

2. Textiles

3. Wood products

4. Paper products

5. Leather products

6. Printing

7. Rubber and Coal products

8. Candle products

9. Toys manufacture

10. Agriculturist

11. Transport drivers association

12. Transport karmacharis

13. Rural Poor

14. Construction workers

15. Fire crackers workers

16. Coconut processors

17. Aanganwadi workers and helpers

18. Kotwal


19. Plantation workers

2. Janashree Bima Yojana

3.4 Janashree Bima Yojana provides for life insurance protection to the rural and urban people who are below or marginally above the poverty line and who are aged between 18 and 59 years. However, the person should be a member of any of the approved vocation or occupation group out of 43 occupational groups approved in this regard. A State Government department which is concerned with the welfare of the relevant section of the group or village panchayat or NGO or any other self help group would have to be a nodal agency. The scheme cannot be offered to individual members unless they form a group of atleast 25. The premium for this scheme is Rs.200 per member. 50% of which is borne by either the member or nodal agency or State Government and the remaining 50% is contributed from the social security fund managed by LIC. In regard to identification of target population for coverage under the scheme, the Secretary (Department of Economic Affairs) stated during the evidence "There are 43 occupational groups which are covered under Janashree Bima Yojana. So, there is no fresh definition of BPL families in case of life cover."

3.5 Schedules of benefits payable to the beneficiary under the Scheme are:-

Event Benefit Amount

Death (other than by accident) Rs.20000

Death or total permanent disability

due to accident Rs.50000

Permanent partial disability due to

accident Rs.25000


3.6 The coverage under Janashree Bima Yojana is stated to be as follows :-

Scheme 2000-01 2001-02 2002-03 2003-04 2004-05

215637 819012 1158239 2507024 3539654

3.7 Shiksha Sahayog Yojana (SSY) : In pursuant to the Government’s announcement in the Budget 2001-2002, LIC launched the Shiksha Sayhayog Yojana for the benefit of children of members of Janashree Bima Yojana. The scheme provides for the scholarship of Rs.300/- per quarter to students studying in 9th to 12th standards. The beneficiary has not to pay any premium for availing the supplementary benefit of scholarship.

3.8 The number of Scholarships disbursed during the last 3 years are as follows:

Year No. of Scholarships

2002-03 47,313

2003-04 1,60,473

2004-05 1,74,179


3.9 In regard to weaknesses of the above two schemes, LIC in a written reply stated as follows:-

1. No Scheme can be offered to individual members unless they form a group of atleast 25.


2. Only heads of families are covered.

3. Identifying beneficiaries who are below poverty line or marginally above poverty line is difficult. Hence benefits of the scheme may be drawn even by those who are not eligible for the same.

3.10 In regard to the efforts being made to popularize the scheme, representative of the Ministry of Finance stated during the evidence:-

"October, every year is celebrated as social security month where a number of activities do take place. Most of these things are sponsored by NGOs. Groups are organized from some group or Panchayats or some body; they come as our members as master policyholders. We try to target the NGOs of the state. We have a list of NGOs every month and people’s representatives in this area. In this month we made extensive contacts with the people and people’s groups also in the Panchayats. Moreover, even though it is not really our full-profitable business, every year we set a target of number of lives that are to be covered which is given to each of our operating units. This yearly target is renewable every year. Once a group joins we take every effort to see those people are renewing every year without fail so that the cover comes continuously. These are the efforts that we are taking for popularizing the scheme."

3.11 A representative of NGOs involved in implementation of insurance schemes for weaker sections while explaining the reasons for dismal coverage under the scheme, stated during evidence that:-

"… contention here is that the LIC, which is a very large organisation has floated this scheme, but people outside of Delhi, or even in Delhi are not aware of this. It is primarily because BPL people mostly stays in the slums or in marginalized areas. They are not aware of the scheme. I go to such people to speak to them that such and such scheme exists. People are not aware. My contention here is that the LIC if it has to reach to a larger audience, then has to pay a


little more to publicity. They have to advertise more use publicity material, or may be use the services of the Doordarshan for reaching out to people living in villages or in the slums and marginalized areas.

My second contention here is that the Panchayati Raj institutions which have its reaches far and wide in the remote areas, if they could take up this issue as one of the important aspects of their work, then perhaps they will be able to reach out to those people who are categorized as BPL families."

3. Universal Health Insurance Scheme

3.12 Universal Health Insurance Scheme (UHIS), first launched in July, 2003 and redesigned in 2004 covers mainly hospitalization benefit upto a limit of Rs.30000 for a BPL family including compensation for death of the earning head of the family for Rs.25000. Compensation to the earning head of the family towards loss of earnings at the rate of Rs.50 per day for the period of hospitalization to a maximum of 15 days is also payable. The premium payable is Rs.365 for an individual, Rs.548 for a family of 5 and Rs.730 for a family of 7 with a central Government subsidy of Rs.200 for an individual, Rs.300 for a family of 5 and Rs.400 for a family of 7 as per Budget 2004-05. In regard to identification of target population for coverage under the scheme, representative of the Ministry of Finance informed the Committee during the evidence as under:-

"In case of non-life cover, under Universal Health Insurance Scheme of BPL, we take the definition of the Planning Commission. But all the State Governments have issued separate coloured ration cards to BPL families. So, we cover only those families which are given the BPL ration cards by different State Governments."


3.13 The coverage under UHIS is as given below :-

Years No. of Policies No. of families No. of Persons

2003-04 327562 416688 1161604

204-05 52772 65718 182641

3.14 To a query regarding the reasons for unsatisfactory coverage under UHIS, the Ministry of Health and Family Welfare stated in their note that the Universal Health Insurance Scheme has not taken off for a number of reasons including the unsatisfactory efforts on increasing enrolment, unsatisfactory thrust of public sector insurance companies in linking service provision and to ensure quality health care etc.

3.15 When asked about the failure to cover more people under health insurance scheme, the Chief executive, General Insurers (Public Sector) Association of India (GIPSA) stated as follows during evidence before the Committee :-

"…Knowing the experience that we have, the health insurance cover has not been successful because of the laws that we have. It means that the premium, the consideration which we get has been far low than the amount that we have been paying. Another reason is that we have not been able to enlarge the base. Unless the base is enlarged, certainly premium will go down because volume will go up. What is happening unfortunately is that in urban areas only those people who are vulnerable to diseases are coming forward to take the policies and in rural areas also, it started happening. So, only a select few take it. The population has been identified and they are coming forward to take it. It is not a question of Government subsidizing the schemes. It should be remunerative to the insurance companies. We do not want to make money out of it. But it should be on the basis of ‘no profit,


no loss’. But unfortunately at the end of the day, it turns out to be a loss-making proposition. The subsidy has to be stopped and then, it must be remunerative. That means, the premium must commensurate with the risk that we take. That is the basic problem. I am sure, in another 2-3-4 years, if the base is enlarged, this will be taken care of, once the premium goes down."

3.16 During the evidence, the Chief Executive, GIPSA further stated as follows:-

"…We had mentioned earlier also that BPL population finds it difficult to pay even the subsidized premium. Although subsidy is available from the Government, there is a lack of awareness and affordability among these people. So, we felt that if the Government allows 100 per cent subsidy for BPL families for the initial period of two to three years, to increase awareness and save them from rural indebtedness arising out of health hazards, gradually shifting to a self-supportive scheme, these scheme will be successful. If the State Governments are encouraged to take master policies for the entire State, it will reduce the cost of implementation and will bring in awareness quickly and uniformly all over the country for better evaluation. Lack of reach of insurance companies in true sense to the actual rural areas needs to be looked into by creating a separate entity, if possible, for socially-oriented schemes. Then there is the fact that the claim ratio in health insurance is much higher and the business is loss-prone all over. This requires a different approach other than what is followed at present by the public sector insurance companies’.

3.17 When asked about the plan of Ministry of Finance to cover all the BPL families under Universal Health Insurance Scheme (UHIS), Special Secretary, Ministry of Finance deposed before the Committee


as under:-

"I am not in a position to give a target as to by which time we will be able to cover all the BPL families. But the restriction of the scheme was that it was to be implemented only through the public sector insurance companies. That is the Budgetary announcement. We have had about one year’s discussion within the Government which involves the Health Ministry, Finance Ministry and the insurance companies. Now, the private sector insurance companies have also come forward. ……Health provisioning, whether for BPL families or for general, is done by the Health Ministry. By virtue of the fact that only public sector insurance companies are under the administrative control of the Ministry of Finance, we are before you today. Now, there is in fact a direction right from the Prime Minister himself. He had taken a meeting in which a presentation was done by the Health Ministry in which they have been asked to design a scheme which will be applicable to all the BPL families irrespective of whether the scheme is to be implemented by the public sector insurance companies or by the private sector insurance companies. The coverage will be all over India. The coverage will be for all the BPL families. That scheme is now being designed by the Health Ministry."






4.1 Landless Agricultural Labourers Group Insurance Scheme (LALGI) was launched on 15th August, 1987 and termed as the world’s largest group insurance scheme which would about 1.2 cores landless agricultural labourers throughout the country. Under this scheme, heads of families who were landless agricultural labourers were insured and the scheme provided for the following:


18 to 60 years


Rs. 2000/- (prior to 10.1.92 it was Rs. 1000/-


No premium charged. Entire premium was drawn from Social Security Fund.

The scheme was run on "no profit no loss" basis by LIC. The scheme was withdrawn w.e.f. 14.8.2000 as it was envisaged that the insurance cover of Re. 2000/- was too low.


4.2 Rural Group Life Insurance Schemes came into effect from 15.8.1995. These schemes were to provide life insurance protection to the rural masses. Personas aged 20 years or more but less than 50 years were eligible to enter the schemes. A person belonging to a household below the poverty line was eligible for a subsidy of 50% in the premium, which was shared by the Central and State


Governments in equal proportion. The annual premium was Rs. 60/- p.a. for a person aged 20-40 years, on the date of joining and Rs. 70/- for aged 40 to 50 years. In the event of death of a member before age 60 years, a flat sum assured of Rs. 5000/- was paid to the appointed beneficiary. The scheme was administered through elected panchayats. The scheme was discontinued w.e.f. 01.4.2000 as there was a proposal to have an all-encompassing single, simple land comprehensive scheme of insurance which will be easy to operate.


4.3 Krishi Shramik Samajik Suraksha Yojana was launched on 1st July, 2001. The object of the scheme was to provide life insurance protection, periodical lump sum survival benefit and pension to the agricultural workers. Persons between age 18 and 50 years could enter into the scheme. Persons engaged in one or more of the following agricultural occupations in the capacity of a labourer on hire, whether paid in cash or kind or partly in cash and partly in kind were eligible under this scheme:-

a) farming

b) dairy farming

c) production

d) raising of livestock, bee-keeping or poultry farming and

e) any practice performed on a farm as incidental to or in conjunction with the farm operation.

LIC in a written reply has stated that the sale of new policies was discontinued from December, 2003 as advised by Ministry of


Labour and that the amount of subsidy was too high and Ministry of Labour’s proposal was turned down by the Ministry of Finance.

4.4 Premium under the scheme was Rs. 365/- per annum and the Government contributed double the amount from Social Security Fund besides Rs. 100/- for life covers. Gram Panchayats were the nodal agency, which identified the agricultural workers and organized them into groups of minimum 20 and submitted details to LIC. The scheme was launched in 50 selected districts. The details of the lives covered and benefits accruing were as under:











Benefits: (while the membership is in force)

On death before age 60:

Payment of sum assured along with

return of accumulated Amount with interest : Rs, 20,000/-

Payment of an additional sum assured in

Case of death due to accident: Rs. 30,000/-

In case of total permanent disability: Rs. 50,000/-

In case of partial permanent disability: Rs. 25,000/-

4.5 Besides above, lump sum survival benefit of Rs. 3000/- were to be provided at the end of every 10th Year after entry into the scheme.


Minimum pension of Rs. 100/- p.m. were to be paid to the member on reaching age 60.

4.6 When asked for reasons for the closure of the scheme, Finance Secretary stated that:

"The Krishi Shramik Samajik Suraksha Yojana was started in 2001 but got frozen because Laboure Department could not provide budgetary devolutions fore new enrolments. So, the scheme got frozen in 2004. For new members, the Labour Ministry has not able to provide additional funds and that is why, the scheme stands frozen."


4.7 Rural Postal Life Insurance PLI (RPLI) came into being as a sequel to the recommendation of the Official Committee for Reforms in the Insurance Sector (Malhotra Committee). The Committee had stated that Rural Branch Postmasters who enjoy a position of turst in the community have the capacity to canvass life insurance business within their respective areas. The Government accepted this recommendation and permitted Postal Life Insurance to extend its coverage to the rural areas with effect from 24.3.1995, mainly because of the vast network of Post Offices in the rural areas and low cost of operations. The prime objective of the scheme is to provide insurance cover to the rural public in general and to benefit weaker sections and women workers of rural areas in particular and also to spread insurance awareness among the rural population. RPLI has now a total of about 56 lacs policies with a total Sum Assured of about Rs. 27,000 Crore and the fund balance of about Rs. 1297 Crore as on 31.3.2006.



4.8 Keeping in perspective the abysmal insurance coverage of the poor and the need for having insurance products that can be afforded by the rural and urban poor, IRDA floated the concept of Micro insurance and notified regulations for the same in November, 2005. Focus of the regulations was to provide a platform our rules to provide insurance to the targeted segment of the society.

4.9 The following are the terms of life Micro Insurance Products

Type of Cover

Minimum amount of Cover

Maximum amount of Cover

Term of Cover Min.

Term of cover Max

Minimum Age at entry

Maximum Age at entry

Term Insurance with or without return of premium Rs.



5 years

15 years



Endowment Insurance



5 years

15 years



Health Insurance Contract (Individual)



1 year

7 years

Insurer’s discretion

Insurer’s discretion

Health Insurance Contract (Family)



1 year

7 year

Insurer’s discretion

Insurer’s discretion

Accident Benefit as rider



5 year

15 years



Notes: 1. Group insurance products may be renewable on a yearly


2. The minimum number of members comprising a group shall

be at least twenty for group insurance.


4.10 The following are the terms of non-life micro insurance product


Type of Cover Min.

Amount of Cover

Max. Amount of Cover

Term of Cover Min.

Term of Cover Mix.

Min. Age at entry

Max. Age at entry


Dwelling and contents, or livestock or tools or implements or other named assets/or Crop insurance against all perils Rs.

5,000 Per asset cover

Rs.30,000 Per asset cover

1 year

1 year




Health Insurance Contract (Ind.)



1 year

1 year

Insurer’s discretion


Health Insurance Contract (family) (option to avail limit for individual/float on family) Rs.



1 year

1 year

Insurer’s discretion


Personal Accident (per life earning member of family) Rs.



1 year

1 year



Note : The minimum number of members comprising a group shall

be at least twenty for group insurance.



Insurance Schemes run by State Governments

5.1 State Governments of Punjab, Uttanchal and the Government of U.T. of Pondichery are providing /had provided insurance cover to all the Heads of the families living below poverty line under Janshree Bima Yojana. Some States have covered entire occupational groups. Tamil Nadu has covered handloom weavers, Maharashtra has covered unorganized labour and Andhra Pradesh has covered rickshaw pullers, shopkeepers, agricultural labourers etc. LIC in a written reply, has stated that such steps taken by the state Governments are definitely advantageous for providing insurance coverage for weaker sections.

5.2 Government of Kerala assumed a Health Insurance Scheme namely Kudumshree this year for below poverty line people. As per this scheme a death compensation of Rs. 1 lakh and medical expenses (of a family consisting of 5 members) upto Rs. 30,000/- per annum is offered. The premium for the scheme is Rs.399/. Of which Rs.99/- shall be borne in the ratio of 1:1:1 by the State Government, Local Self Government and the beneficiary respectively. Rs.300/- will come as subsidy from the Central Government. The scheme is to be operated by a private insurance company named ICICI Lombard. As the subsidy of Rs. 300/- under UHIS can be availed only by the Public Sector Insurance Companies, the scheme remains a non-starter. In this regard, a representative of the Ministry of Health and family Welfare stated before the Committee during evidence as follows:-

"A lot of these explanations are existing in the universal health insurance scheme. Among other explanations, this also


perhaps is an explanation that the scheme has not been doing well, as it is evident. That is why in Kerala, when they worked out the Kudumbashree which was originally taken from UHI scheme. They made seven very critical departures form the UHI project. Pre-existing diseases was covered in the Kudumbashree which Kerala developed. First year exclusions were covered, maternity benefits were covered, cost of domiciliary hospitals were covered, mental illness, full disability compensation and partial disability compensation was also covered. Surprisingly, the premium worked out which was lower than what was the premium for UHIS. None of these is allowed under the existing UHIS. They had managed to negotiate through an open process and able to get this particular thing. The only problem, as you know, is the scheme has not started. Out of 25 lakh below the poverty line families in Kerala, about eight lakh have already deposited their share of Rs. 33, the State Government was to give Rs. 33, local Government, Rs. 33. They had expected Rs. 300 to come as subsidy from the Government of India, which is as I mentioned because of the specific budgetary statement that it would only be available for public sector insurance companies, the Finance Ministry has not been able to do that. …They wanted to develop with ICICI Lombard through open and transparent process and they were being provided under UHIH scheme a sum of Rs.580/- for a family of five but the actual amount available was Rs.399/- but the Ministry of Finance has not yet agreed to release the subsidy of Rs.300/-."

5.3 Government of Assam has also introduced Mukhya Mantrir Jibon Jyoti Bima Achoni which is a combined Health Insurance and Personal Accident Scheme for all the citizens of the State. The objective of the scheme is to provide medical expenses upto a maximum of Rs.25,000/-. In regard to implementation of this scheme, a representative of GIPSA stated during evidence, "whether people have got the benefits of the scheme or not is not known."


5.4 Government of Andhra Pradesh has also launched one Graha Raksha Yojana in which al the BPL families whose houses are destroyed by natural calamities are eligible to claim Rs.10,000. Another scheme of Andhra Pradesh is a personal accident cover. Anybody in that State who is a farmer or a poor man is covered upto an insurance of lakh. Premium for these schemes is paid by the Government of Andhra Pradesh. In regard to implementation, the Committee were informed that though it is loss making, it is successful.

5.5 In the state budget of 2006-07, the Government of Karnataka announced to implement a health insurance scheme for landless agricultural labourers under the name of "Swarana Suraksha". The scheme will be implemented by adapting the "Universal Health Insurance Scheme" of the Government of India.








Village Foundation Social Welfare Trust 
Mr : N.Venkatesan .M.A , D.ed.
Padavedu (A.K.Padavedu) , Polur (TK)
Thiruvannamalai (DT)
Tamilnadu, India. PIN - 606905