How Modi can introduce life insurance for the poor

In his dream, Indian Prime Minister Narendra Modi chose to be invisible, as empowered by Lord Vishnu in order to understand the need of the people and assess their level of satisfaction with his administration.
Thereafter the invisible PM was in a congested lane of a slum in Delhi. He heard women and children weeping uncontrollably. He went closer and saw they were weeping on the corpses of three young men lying before them.
He heard two persons talking.
“This is very unfortunate that all three male members of the three young families died in a traffic accident. They had just come a year ago from their village to Delhi with their family to earn their livelihood.”
“What will happen to these young widows and children? Who will look after them?”
“I am not sure, whether these young men could save some money in the bank. If they do they may be able to start some small businesses such as selling tea, fruits, vegetables, etc. to sustain their family life.”
“But they need to do last rites to dispose off the dead bodies, which would also incur cost.”
“Right… savings would dry up in last rites… they are destined to do menial jobs of ‘Chulha-chauka’ and their kids would resort to begging or stealing.”
“I have heard that in foreign countries, a worker’s life is insured against death due to diseases, accidents or other reasons and their family gets the money from life insurance to sustain their lives in a dignified manner even after death of breadwinner. But the lives of poor are very cheap in our country.”
“Forget about foreign land. Indian employer would never provide life insurance to their workers because these daily wages workers do not work in organised sectors. They have to find a new employer immediately after completion of work at hand. The poor in our country have to toil even for medical facilities. One of these young men was rushed to a nearby private hospital, which refused to extend medical help in absence of medical insurance or advance money deposit.”
“Hospitals are so inhuman! How can the poor afford medical insurance?”
“Several slum dwellers, who are aware about its benefits, have voluntarily opted and purchased the cashless medical insurance to avoid hefty medical bills for medical treatment of their families… But unfortunately nobody is inclined to pay for life insurance as they consider it as an added burden as no one believes that he or she can accidentally die. In fact, no one believes that such an eventuality would ever occur to his or her family. Since an insured person does not live to see the benefits of life insurance, slum dwellers, mostly illiterate, are not inclined to have life insurance. ”
“Had these workers got life insurance, these widows would have financial sustainability. They could start some small vending starts ups to maintain their family.”
“Untimely death is extremely unfortunate for these families…”
An aggrieved Modi returned to his office-room. He looked deep in his thoughts trying to find ways to help the poor.
“O God! What should I do?” Modi murmured. Immediately Lord Vishnu appeared and asked, “Narendra! Is something bothering you? “
“Yes, I would like to provide life assurance to poor family for financial sustainability even after the unfortunate death of breadwinner of the family.” Modi said.
“You need to extend an existing government scheme to all your citizens in a manner that should appear to them as an added benefit and not as an added burden. Thereafter, every citizen would opt for the scheme and you won’t need to worry about their financial sustainability after the death of the breadwinner…..” Lord Vishnu said.
“Lord! Kindly educate me,” Modi pleaded.
“General insurance companies in India have committed themselves to provide ‘Pravasi Bhartiya Bima Yojana’ for initial period of two years on one-time payment of insurance premium of about Rs 375, which covers life, health, maternity, legal expenses, etc, to the tune of Rs 12 lakh to unskilled or semi-skilled workers proceeding abroad on work visa.” Lord paused and continued, “Keeping in view the welfare commitments of the general insurance companies of India for the expatriate Indian unskilled or semi-skilled workers, you can ask the banks to make an insurance linked fixed deposit product in cooperation with the general insurance companies to provide similar life insurance to the applicant of the fixed deposit for a sum ranging from the amount of fixed deposit of over Rs 50,000 to a sum of Rs 10 Lakh.”
Lord Vishnu watched Modi’s face to check his reaction. He found him to be listening intently. Lord Vishnu further said “Since every citizen whether rich or poor is in the habit of banking and saving money for rainy days, an insurance linked bank fixed deposit would do the magic of providing them life insurance as an added benefit to them. The requisite insurance premium, instead of taking it directly from them, can be generated by Indian banks by paying 0.5% less interest on their preferential fixed deposit of over Rs 50,000. Since banks would have all the personal details of the applicant, it can provide similar life insurance cover by paying the insurance premium of appox Rs 375 earned due to payment of 0.5% less interest. The bank’s fixed deposit can have clause of no-mid-term break, which would allow creation of wealth available to your government for infrastructure or other projects. Since banks have now flexibility to make their product and offer preferential interest rate, your government can encourage banks to tailor such insurance linked bank fixed deposit. This would provide a feeling of security due to the life insurance. Thus, you can provide life assurance to every Indian opting to insurance linked bank fixed deposit product.”
“Lord! Your blessing is my strength!” Modi said. He profusely thanked Lord Vishnu.


By Yogiita Chawdhary