Aam Aadmi Bima Yojana : Good Intentions Not Enough

good-intentions-not-enoughThe Aam Aadmi Bima Yojana (AABY), launched on 2 October 2007, covers death and permanent disability for the benefit of rural landless households. The scheme provides for insurance of the head of the family or an earning member of the family of rural landless household between the age of 18 to 59 years against natural death as well as accidental death and partial or permanent disability. The annual premium payable per member is Rs. 200, of which 50 per cent is paid by the Central Government and the remaining 50 per cent by the State Government. This scheme extends the benefit of life insurance coverage as well as coverage of partial and permanent disability to the head of the family or an earning member of the family of rural landless households in the States. It also provides educational assistance to their children studying from 9th to 12th standard as an extended benefit. The scheme is operated by the Life Insurance Corporation of India.

Eligibility
The member should be aged between 18 and 59 years and should be either the head of the rural landless household or an earning member in the family.
Benefits
In the event of the death of a member prior to the terminal date, the assured sum of Rs. 30,000 will become payable to the nominee. In the event of death by accident or total or partial permanent disability due to accident, the following amounts shall become payable :

  1.  On death due to accident: ` 75,000.
  2.  Permanent total disability due to accident: ` 75,000.
  3.  Loss of two eyes or two limbs: ` 75,000.
  4.  Loss of one eye or one limb in accident: ` 37,500.

 

Scholarships

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A free add-on scholarship benefit for the children of the members of AABY is provided under the scheme. A scholarship at the rate of 100 rupees per month will be given to maximum two children studying between 9th to 12th standard. This scholarship is payable half yearly on 1 July and on 1 January each year.
Premium

  •  The premium under the scheme is Rs. 200 out of which 50 per cent is subsidised from the fund created for this purpose by the Central Government and the remaining 50 per cent is contributed by the State Government.
  •  The premium is payable in yearly mode and relaxation of mode of payment is not allowed.
  •  Experience rating adjustment is allowed after 3 years based on claim experience, if the group is of 2000 or more members.

If the Government is keen to provide benefits to the needy, it obviously needs to review the Aam Aadmi Bima Yojana, identify the weak areas and take speedy steps to rectify them.

Problems and Challenges
Conceptually, the Aam Aadmi Bima Yojana is a good scheme for the rural landless of the country. However, there are a number of problems and challenges that have cropped up which should be a cause of worry for the Government. For instance, the scheme does not include marginalised farmers in its ambit. In a country like India which is primarily agriculture based, it is important to take care of all farmers.
The marginalised farmers do not find a place in this scheme and therefore a large section of farmers are not covered which leaves them without any sort of social security. Then again, registrations have been done but the beneficiaries have not yet received their benefits in most of the cases. It has been seen that the process of registration has been completed but the benefits to be provided to the beneficiaries have not reached them in many cases.
Moreover, the Government has not launched any major awareness program for the scheme as a result of which many people need to avail of its benefits do not know of the scheme. Awareness programmes would ensure that intended beneficiaries come to know about the scheme and avail of the benefits. Also, the scheme stipulates that a child studying between 9th to 12th standard would be paid Rs. 100 — this is a small amount compared to the actual amount of money required by a student for his/her studies. School fees, cost of books, copies etc cannot be covered with the amount paid by the Government.
It is important for the Government to take necessary steps and increase the scholarship money for the students so that they are in a better position to meet the costs of studying. If the Government is keen to provide benefits to the needy, it obviously needs to review the scheme, identify the weak areas and take speedy steps to rectify them.

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