JEEViKA spearheading Insurance in Rural Bihar

More than 40 lakhs of JEEViKA[1] didi were insured with two flagship schemes of the Government of India- Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)[2], and Pradhan Mantri Suraksha Bima Yojana (PMSBY)[3] in November 2021 across Bihar. PMJJBY and PMSBY were launched on 9th May 2015 by Honourable Prime Minister Shri Narendra Modi to create a social security system for the poor and less-privileged by providing life insurance and accidental insurance respectively.

Benefits of Insurance

It is widely seen that poor people with limited opportunities, meager assets, and certain pre-existing conditions are more vulnerable than others.[4] They encounter risk from several factors such as diseases, violence, accident, etc. Untimely death / accidental disability of an income-generating person can put the entire family in economic jeopardy and push it further into poverty. This happens because any such event interrupts income forcing a family to liquidate productive assets and sell household consumables to recover from the loss. The frequency of such events is higher on poor as they have less life expectancy[5], illness and disability rate is higher as compared to the average individual. It is under this context that insurances come as the most effective way of reducing the vulnerability from disease, disability, harsh weather conditions, etc. by pooling the resources of many to compensate for the loss of few. The need for social safety in the form of insurance becomes of paramount importance in Bihar, which has one of the lowest per capita incomes in-country and often lags behind in several socio-economic indicators such as income level, the standard of living, health consciousness, personal hygiene, etc.[6] which makes the population vulnerable to disease. This, in turn, makes family of income-generating member vulnerable to economic shock. JEEViKA is addressing this issue by spreading awareness and easing the enrollment process of the Government of India’s flagship insurance scheme PMJJBY & PMSBY.

Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)

PMJJBY is a life insurance scheme of one year offering coverage for death due. It can be availed by people in the age group 18-50 years with a bank account. PMJJBY cost INR 330, which is less than a rupee per day and it provides life cover of INR 200,000 for a year, for the period from 01st June to 31st May to the insured individual. To claim the benefits, nominees of the insured person need to contact the bank with a death certificate and a simple claim form.

Pradhan Mantri Suraksha Bima Yojana (PMSBY)

PMSBY is an accidental insurance cover at an exceptionally affordable premium of INR 12 per year. It can be availed by people in the age group 18-70 years with a bank account. The period of PMSBY is the same as that of PMJJBY. The risk coverage in PMSBY is INR 200,000 for accidental death/full disability and INR 100,000 for partial disability.

Intervention of JEEViKA

The low penetration of insurance in the rural area can be primarily attributed to – a) product design b) distribution channel c) after-sales service. To large extent, the first challenge of product design was aptly tackled by the Government of India by launching affordable and value-based insurance products in the form of PMJJBY & PMSBY. It was the second and third challenge that JEEViKA addressed in the month-long drive of insurance. To begin with, in the month of October JEEViKA started an awareness campaign on insurance. The community-based organizations promoted by JEEViKA[7] viz. cluster level federation (CLF), village organization (VO), and self-help groups (SHG) made insurance an agenda at each level and started a discussion around it as many of the JEEViKA members were earlier unfamiliar and indifferent towards the concept of insurance as a social safety net.

For addressing the second challenge related to the distribution channel, JEEViKA worked in collaboration with all the banks, where its members had a bank account. A meeting with bank officials and customer service point (CSP) was organized in all District Project Coordination Units (DPCU) of JEEViKA across the state. The target was to insure maximum members and so as per the requirement of members, CSP was brought to a pre-decided place convenient to members, and insurance was done in a camp mode targeting each village. In case any JEEViKA didi does not have the required amount for insurance, then the respective village organisation provided an immediate loan in such cases. Along with the camp mode, the community mobiliser deployed at village organisation level went door to door and distributed insurance form did handholding in completing the insurance form and finally submitted it in bank on behalf of members. Malti devi, associated with Om VO from Jehanabad district says, “I am differently-abled and run a vegetable shop for livelihood, going to a bank branch and filling insurance form after standing in the long queue would have been difficult and could have costed me almost a day of income as the bank is 4 km from my home but since the insurance camp was organised in my village, I could easily go and got myself insured with both schemes PMJJBY & PMSBY as they are inexpensive as well.”

The third challenge in the rural insurance market is the after-sales service. A major part of it is about generating confidence and trust among members that once the policy has been bought in case of any mishappenings they will be able to avail mentioned benefits. JEEViKA is best positioned to instill this confidence among members. The community mobilizer (CM) of JEEViKA is trained on the process of claiming insurance benefits. It is the duty of the CM to assist the member/nominee of the member in availing of insurance cover. A certain incentive is kept for Community Mobiliser when a claim has been successfully settled. In several districts such as Jehanabad cases of successful claim settlement were spread in the case study format, which further generated faith among members.

JEEViKA through years of efforts have inculcated the need of financial planning and has developed saving habit[8] among its members. This habit of saving enabled members to regularly deposit money in banks and which laid the foundation of striving for other financial services such as insurance products.

[1] Bihar Rural Livelihoods Promotion Society popularly called as JEEViKA is a Government of Bihar initiative for poverty alleviation. Women associated with the initiative is called JEEViKA didi Click here to know more

[2] PMJJBY

[3] PMSBY

[4] Chapter 8 of World Development Report 2000/2001

[5] The Association Between Income and Life Expectancy in the United States, 2001–2014. Click here to know more

[6] An article on The Hindu - How Bihar fares in various socio-economic indicators compared to other States. Click here to read

[7] To know more about Community based institutions- SHG, VO, and CLF, click here

[8] National rural livelihoods mission in Bihar: results from a survey of self-help groups formed under Jeevika. Click here to read more