List and explain the various rural insurance policies

Rural insurance policies
The Insurance Regulatory and Development Authority (IRDA) have defined the rural and social insurance products with respect to the minimum and maximum sum assured. The regulator also intends to include micro insurance under its definition which will make sure that insurers will no longer be able to get away with selling low-value and low-premium covers to rural people to meet the rural and social criteria prescribed. IRDA has written to insurers saying that rural products will have to offer a minimum sum assured of Rs. 5,000 for general insurance and life insurance policies. The health insurance for family and personal accident per person will have to be a minimum of Rs10,000. There will be no upper limit on the amount assured.
 

The types of policies which are associated with rural insurance are:

 Aqua culture insurance: This policy is given to licensed farms, in accordance with the government norms for growing brackish water shrimp by adopting extensive systems. This policy grants cover against natural calamities and diseases. It is given for a period of four and half months.
 

The requirements of the farm are: 

1. It should be licensed to set up and conduct aqua culture operations. It should be established as per standards. 
2. The seed used should be of good quality and as per the prescribed norms. 
3. The seed should be availed from well-known sources. 
4. Cattle insurance: This is best suited for farmers, who own the cattle and the financial institutions that have financed the purchase. The term of the policy is usually for a period of 12 months or for 3 to 5 years. It covers loss due to death, illness or accident. It also covers the transit of cattle from the place of purchase to the stables located within 80 kms.

A veterinary officer is required to fix the value of the cattle, and for accepting the proposal. In case of death, the policy pays the market value of the animal prior to the death or accident or the sum insured, whichever is lesser among the two. Veterinary examination and tagging of the cattle is necessary for granting insurance cover. Natural identification marks and color should be clearly stated in the proposal form with the veterinarian's report.

Indian economy is based on agriculture; hence, a sound agricultural base can only lead to economic stability. Therefore, the GIC has introduced rural insurance schemes not just to offer financial protection, but also to fulfill their goal. Hence, this cover gains the maximum importance amongst rural insurance policies. 

1. Failed well insurance - Wells financed by banks and re-financed by NABARD are insured. Those wells that are financed by nationalised banks but not re-financed by NABARD require approval of the head office. It protects against the risk of low yield based. The selection of the site must be done using scientific principles and methods. Bore wells which yield up to 1000 gallons per hour are covered by this policy. If the yield is below 500 gallons, then the well is counted to be a failure. If the yield is between 500 to 1000 gallons per hour, the policy pays proportionally to the actual yield. The policy does not cover natural calamities, quality of water, structural failure of work, defective design material, bad workmanship and allied perils. Rate of premium is 17.5 percent of sum insured. The proposal should be attested with site selection report obtained from geohydrologist approved by insurers. 
2. Inland fish insurance - It is also called as pond insurance. This policy is made available for fresh water fish rearers. It covers total loss of fish due to accident or disease during the period of insurance. It also covers loss due to pollution and malicious act by third parties and strike. Flood and allied risks are covered on payment of extra premium. The value of fish increases due to growth and inputs and is affected as per the scheduled valuation fixed. The value depends on the cost of input and other incidental expenses. Premium is charged at 2.4 percent on the peak value. Flood perils are covered by charging one percent extra in non-flooded areas and 2 percent in case of flood prone areas. The documents to be submitted are - a copy of the techno-economic feasibility report deciding the sum insured for the items, specimen copies of fish culture records, a certificate of government fishery extension regarding viability of bunds. 
3. Plantation / horticulture / floriculture insurance - This policy provides cover for loss or damage to horticultural crops like trees of citrus fruits, apple, banana and plantation crops like rubber, eucalyptus, tea, and floricultural plants like roses, orchids etc. It also covers damages due to fire, lightning, storm, hail storm, riot, strike and terrorism. It excludes loss due to loss by theft, earthquake, climate variations, pollutions, non-bearing fruits, damages by birds or animals, damage by irrigation system or agricultural equipment. The duration of insurance is from planting to harvest or one year whichever is shorter. The amount of insurance is based on costs of cultivation, cost of manures, cost of pesticides, labor cost of planting, and cost of plant/seedlings. 
4. Farmer’s package insurance - Various insurance companies are making promotion of insurance schemes in rural places to bring development among them. They are trying to promote insurance for crop, health, agricultural tools and livestock. The farmer‟s package insurance is a complete policy package. It extends to give coverage for wider risks and dangers. The insured farmers get full assurance for any kind of risk. There are many sections included in the policy providing protection for farmers and to their goods. The farmer‟s policy package provides coverage for any kind of damage to their household products such as goods stock, television, bicycle, and other things insured. Damage caused by accident, damages to their livestock, pump, cart and even medical expenses incurred during any accident is covered by this policy. Kissan Package Insurance provided by Oriental Insurance is an example of this policy.

Various other insurances under rural insurance are poultry insurance, hut insurance, irrigation insurance, and bee insurance.