LIC & PNB launch insurance scheme for women

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Alwar, Aug 15 : Life Insurance Corporation, the country’s largest insurer and Punjab National Bank, the second largest public sector lender, have launched a life insurance scheme for credit-linked women self help groups to provide life and permanent disability cover.

This is the first such programme launched on a national level, as per the announcement by finance minister P Chidambaram in his budget speech this year. The scheme will initially cover 5,000 members of SHGs credit-linked to PNB and the annual premium is Rs 200, 50% of this is contributed by the insured and the rest comes from the Social Security Fund of the central government.

There are 30 lakh SHGs credit linked to banks. In the budget for this fiscal, Chidambaram had allocated Rs 500 crore to the corpus of Social Security Fund.

If the insured dies or gets permanently disabled in an accident, LIC would pay Rs 75,000, while in case of normal death, Rs 30,000 would be paid. In a permanent partial disability, the insured would get Rs 37,500.

“The claim would be settled only after adjusting the outstanding credit against the member in favour of PNB,” LIC chief (SBU – Pension and Group Schemes) P Satyanandam said.

The scheme also entitles the insured to a scholarship of Rs 1,200 per annum for her children studying in 9 th -12 th standard.

LIC offers life and permanent disability cover to people in 44 categories, and covers 35,000 SHGs at present.

LIC is targeting 2.5 lakh self help groups in 2008-09 under the scheme.

“I am confident that we would exceed (the target) by launching such programmes in collaboration with other public sector banks, which were advised by the finance minister to facilitate expansion of such services,” Satyanandam said.

“LIC is also in talks with Oriental Bank of Commerce and Punjab & Sind Bank for the scheme,” the insurer’s divisional manager (Pension and Group Schemes) Narendra Kumar said.

“PNB has announced 2008-09 as the financial inclusion year. The bank is opening no-frills account for the poor and is providing them an overdraft limit of Rs 2,000.”