LIC for high premium | Aam Aadmi scheme

Faced with a high claim ratio for Aam Aadmi Bima Yojana in Andhra Pradesh, the Life Insurance Corporation of India (LIC) has sought an increase in premium to Rs320 from Rs 200.
The group insurance plan was introduced by the Centre for the landless agricultural labourers.
About 5.2 million are covered under the Aam Aadmi scheme in 2010-11 in Andhra Pradesh. For the 2 year period 2008-10, the state paid Rs76 crore premium for while the LIC disbursed claims, including scholarships, worth Rs281.25 crore for the scheme.
According to officials, the LIC has moved the plan for increasing the premium. However, this might not be possible. “This is a nationwide scheme. If they have to increase the premium, they should do across the country or not do it at all (in Andhra Pradesh),” said a senior government official.
Rural Development minister Vatti Vasantha Kumar said a call on increasing the premium would be decided soon. He, however, clarified that the matter was between state and central governments and would not impact the implementation of the scheme at the grassroot level.
Under the Aam Aadmi scheme LIC provides an insurance cover of Rs30,000 for natural death, Rs75,000 for accidental death, Rs37,500 for permanent partial disability and Rs75,000 for permanent total disability due to accident.
When contracted, LIC regional manager Thyagarajan declined to comment on the issue.
In another central-sponsored scheme Janashree Bima Yojana, where the premium of Rs150 per member is shared by the Government of India and the member on a 50-50 basis, LIC has developed claims worth Rs122.94 crore for the premium of Rs44.34 crore collected in the state in the last 2 years.
However, there is no request for increasing the premium in this case. LIC has 3.9 million under Janashree Bima in the state for 2010-11.
A free add-on scholarship benefit for the children of the members of Aam Aasmi Bima and Janashree Bima is also comprehensive. Scholarships of Rs100 a month is also extended to two children studying between 9 and 12 standard. It is paid on a half yearly basis - in January and July each year.
According to Society for Elimination of Rural Poverty (Serp) chief executive officer B Raj Sehker, the claim ratio for these two schemes is high due to community participation.
The data of all the enrolled members is on the Internet. Call centres at the district level have been established with trained personnel to register the claims. An immediate assistance of Rs 5,000 to the bereaved families through 1,000 Bima Mitras (community members) in 22 districts is given. This amount is taken from the social capital raised from active self-help groups, he said.
Serp plans to bring all SHG members and their spouses under insurance cover. It targets to cover 18 million lives by 2014, he said.
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