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The insurance regulatory and development authority (IRDA) defines rural sector as consisting of

  • a population of less than five thousand,
  • a density of population of less than four hundred per square kilometer, and
  • more than twenty five per cent of the male working population is engaged in agricultural pursuits.

The categories of workers falling under agricultural pursuits are: cultivators, agricultural labourers, and workers in livestock, forestry, fishing, hunting and plantations, orchards and allied activities.

The social sector as defined by the insurance regulator consists of

  • unorganized sector
  • informal sector
  • economically vulnerable or backward classes, and
  • other categories of persons, both in rural and urban areas.

Insurance has thus far been mostly city-oriented. But things are happening in the rural areas where human life and income generating rural assets need protection, and there is tremendous scope for developing insurance business. This shows up the gross neglect of the rural areas vis-à-vis insurance cover, though since the late-1960s, a silent economic revolution has been on in the villages. Now that the insurance sector is open to the private sector and foreign companies, the Government should pay serious attention to covering the rural areas. While it is true that access to insurance cover depends on the literacy/awareness levels and assured income, well-planned and organized efforts by committed private sector companies can yield rich dividends from the rural areas. This is because:

(1) A large number of rural districts have witnessed significant growth and prosperity:

(2) Access to reliable and authentic data and information has improved considerably, which can enable quick and correct decision-making:

(3) There are specific functionaries and agencies in the rural areas which can help explore and exploit insurance business in the untapped rural market.

LIC in the last decade has evolved a number of products which, however, do not suit the needs of the rural areas. Similarly, the four GlC subsidiaries have also been providing insurance cover tor specific kinds of assets owned by rural households through bank credit. But more has really put in the required marketing effort in the villages. The claim lodgment and settlement procedure is time-consuming and cumbersome. Cattle insurance under the government sponsored Integrated Rural Development Programme and crop insurance (till now covering banks loanees) have not met with the expected results.

The IRDA has issued the (obligations of Insurers for Rural or Social sectors) Regulations 2000., which lays down that every insurer transacting general insurance business, shall underwrite business in the rural sector, to the extent of at least 2% of total gross premium in the first financial year, at least 3% of the gross premium in the second financial year and 5% of the gross premium in the third and further financial years. The obligation includes insurance for crops.

Rural polices comprises the insurances of

  1. Various livestock e.g., cattle, sheep, goat etc.
  2. Sub animals e.g., silkworm and honey bee
  3. Plantation and horticultural crops.
  4. Property e.g., agricultural pump sets
  5. Person e.g., gramin accident

Rural insurance products of New India Insurance Company limited

The new India insurance company ltd provides the following types of insurance in rural areas.

1. Cattle Insurance:

This scheme covers the following whether indigenous, exotic or cross-bred.

  • Milch Cows and Buffaloes
  • Calves/ Heifers
  • Stud Bulls
  • Bullocks (Castrated Bulls) and Castrated Male Buffaloes,
  • Animals within a specified age group are accepted under the Standard Insurance Scheme.
  • Sum Insured under the policy will be the Market Value of the animal.
  • Indemnity under the policy will be the sum insured or market value prior to illness whichever less is. The indemnity is limited to 75%% of Sum Insured in case of a PTD claim.
  • The basic premium rate per annum is 4% of the Sum insured. Long term policies are also issued with long term discounts.
  • The premium rates under the policy are concessional for covering animals under government subsidized schemes.
  • Group Discounts are also available.
2. Sheep & Goat Insurance:

All indigenous, crossbred and exotic Sheep and Goat will be covered under this Scheme. The policy shall provide indemnity against death of sheep and goats due to accident Including Fire, Lightning. Flood, Cyclone, Famine, Earthquake landslide, Strike, Riot or diseases contracted or occurring during the period of insurance.

3. Horse/ Pony / Mule/ Donkey Insurance:
4. Pig Insurance Scheme
5. Camel Insurance
6. Poultry Insurance Scheme:

This is a comprehensive insurance scheme applicable to poultry farms consisting layer birds, broiler birds and parent stock (Hatchery) which are exotic and cross-bred. All birds in a farm should be covered. After issuing policy, if additional birds are introduced in the farm, immediate notice to be given to insurer otherwise claim will be repudiated. The scheme is applicable to poultry farms consisting of minimum number of birds as specified

The scheme is available for insuring birds in the following age groups


  • 1 day to 8 weeks
  • 1 day to 6 weeks


  • 1 day to 20 weeks
  • 21 weeks to 72 weeks
  • 1 day to 72 weeks

Hatchery Birds

(Parent Stock)

  • 1 day to 72 weeks

The premium rates are applicable on per cent basis which are applicable to the peak value of birds in the applicable categories. The sum insured is the peak value and for broilers is Rs.45 and for layers is Rs.75. There is a week wise valuation table in-built in the policy which is applied for calculating indemnity. In case of parent stock the same is negotiable.

The policy is characterized by excess and final indemnity is restricted to 80% (60% in case of Gambaro). The scheme is characterized by No claim discounts as well as good feature discount.

7. Duck Insurance Scheme
8. Rabbit Insurance Scheme
9. Elephant Insurance Scheme
10. Dog Insurance Scheme:

Dogs in the age group of 8 weeks to 8 years are insured. Dogs of indigenous origin, cross-bred and exotic breeds are covered under the scheme. Valuation to be done by qualified Veterinary Doctor at the time of proposing the insurance. Insured dogs must be suitably identified by one of the following methods

  • Tattooing
  • Nose Print
  • Photograph

Normal identification marks and breed, sex, age etc., should be clearly described in the Veterinary Certificate. Cost of identifications is to be borne by Insured only. Detailed pedigree record, kennel club record should be submitted along with Vet. Certificate. The basic premium rate is 5 % of sum insured.

11. Zoo and Circus Animal Insurance Scheme
12. Inland Fish Insurance Scheme
13. Silk Worm Insurance Scheme:

This insurance scheme is applicable to Univoltine, Bivoltine and multivoltine breed of Silkworm of mulberry leaves only

14. Honey Bee Insurance:

This insurance scheme is applicable to hives and or Bee Colony belonging to Co- operative Societies or individuals.

15. Agricultural Pump sets Insurance Scheme:

Centrifugal pump sets (Electrical and Diesel / Oil) and Submersible pump sets used for agricultural purposes only are covered under this policy. It includes Pump, Driving Unit and Starter. The pump sets are identified by Make, Year of Manufacture, Serial Number, HP. The premium rating is on the basis of HP. The policy has a deductible franchise which is on the basis of HP. The maximum rewinding charges have been fixed. The sum insured is 100% of Market Value at the time of issuance of cover or present replacement value for Submersible Pump set as per scheme. Policy is characterized by group discounts, long term discounts and no claim discounts.

16. Animal Driven Cart Insurance:
17. Hut Insurance:

It covers dwelling huts in rural areas constructed with financial aid from Banks/co-0p/Govt. Institutions. It covers loss or damage to huts due to Fire including fire resulting from explosion and short- circuiting, Lighting Earthquake Flood, Inundation Storm, Tempest, cyclone or other atmospheric disturbance, Impact damage, Riot, Malicious Damage etc.

18. Gobar Gas Insurance Scheme
19. Lift Irrigation Insurance:

This Insurance scheme provides indemnity against damages caused to Lift Irrigation System which includes Intake Well, Delivery Chambers, Jack Well, Pump House, Water Storage Tank, Pipelines, Cables, Switches, Gears, Starters, Electric Motors of various capacities from 3 H.P. to 200 H.P., Return and Non-return valves.

20. Janata Personal Accident Policy:

Any person irrespective of sex, occupation and profession in the age group of 10 to 7O years may be covered under Janata personal accident policy. The policy is available for minimum sum insured of 25.000/- per person per annum and the maximum sum insured is to be limited to 1,00,000/- per person per annum. The rate of premium is 15 1or a sum insured of z 25,000/-. The sum insured shall be increased in multiples of z.25.000 and premium is charged accordingly. The policy is also available for pre-identified groups as listed by the scheme. In case of a group policy group discounts are available as per size of the group. The policy is also available for a long term period up to 5 years.

21. Gramin Personal Accident Policy
22 Composite Package for Tribal
23 Farmers Package Insurance Scheme
24. Horticulture / Plantation Insurance
25. Comprehensive Floriculture Insurance

Rural Postal Life Insurance

On 24th March, 1995, the benefits of Postal Life Insurance were extended to rural populace of the country under the banner of Rural Postal Life Insurance.

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