Birla Sun Life to offer micro-insurance

Birla Sun Life has launched two life insurance policies for the rural Indians, named Bima Suraksha Super and Bima Dhan Sanchay.

Bima Suraksha Super is a pure risk policy. A sample calculation shows that for a 30 year old male, for a 10 year policy, for an insurance amount of Rs. 10,000 (US$ 250), annual premium will be Rs. 91.24. The premium can be paid monthly, quarterly, semi-annually or annually. If the premium is paid monthly, it will be roughly Rs. 8 (around 20 cents).

Micro-credit institutions can bundle this product along with their loans, and thereby also cover the defaults on their loan, in case the borrower dies before repayment of the loan.

There is no medical test required, and supposedly minimal paper work. Self attestation on the age is sufficient, and will not require any age proof.

For more details, go here.

The second policy is Bima Dhan Sanchay. Unlike the previous policy, this is an endowment like policy. Upon the maturity period, the policy will pay back the total premia paid (but nothing more). However, the premium is quite low, for a similar risk cover from, say, Life Insurance Corporation of India.

For a 30 year old male, for a 10 year policy, sum insured Rs. 10,000, the yearly premium is Rs. 228.63. Monthly premium would come to around Rs. 20 (50 cents). In the event that the insured person survives over the 10 year period, he will get back Rs. 2263 (the premium amount paid in total). Of course, one could get more returns by investing the money in a bank deposit! But then, this also provides risk cover.

For more details, go here.

On the surface, these two schemes offer a decent risk cover at the lowest possible premium. With more players entering the market, even better products may be offered.

Sex workers bank

The Hindustan Times reports that a co-operative bank has been set up in Kamathipura, the red-light area of Mumbai, by the sex-workers, called Sangini Mahila Seva Cooperative Society.

The co-operative is run by the sex-workers themselves, takes deposits from them, provides them loans, and also procures goods from the wholesale markets and sells them at lower prices.

This is an interesting idea, and I wish them all the success.