LIC & PNB launched insurance scheme for credit- linked women SHGs

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

This is the first time such program has been launched on a national level, after the announcement by finance minister P Chidambaram in his budget speech this year. Initially the scheme will be covering 5,000 members of SHGs credit-linked to PNB and the annual premium is Rs 200 from which 50% of this will be contributed by the insured and the rest will come from the Social Security Fund of the central government. You may also check out PNB home loan here to get the rates which would help you to compare the rates from all other lenders available in the market.

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

In case of death of insured person or gets permanently disabled in an accident, LIC will pay Rs 75,000, while in case of normal death, Rs 30,000 will be paid. In case of permanent partial disability, the insured will 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.

Under this scheme the insured is entitled for a scholarship of Rs 1,200 per annum for her children studying in 9 th -12 th standard.

At present LIC is offering life and permanent disability cover to people in 44 categories, and covers 35,000 SHGs.

LIC main aim is to cover 2.5 lakh self help groups in 2008-09 under the scheme.

“I am confident that we would exceed (the target) by launching such programs 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.”

“We have already opened 7 lakh such accounts. The bank would bring 1.5 crore homes and 7.5 crore people under the financial inclusion programme by 2010,” PNB’s executive director J M Garg said.