LIC hikes premium: CM K Chandrashekar Rao

Hyderabad: Telangana state government will have to cough up nearly Rs 500 crore additionally for the Rythu Bheema scheme this year as the official implementing agency Life Insurance Corporation of India has enhanced the premium per person from Rs 2,271 to Rs 3,555 to be paid by the government.

Chief Minister K Chandrashekar Rao launched the farmer insurance scheme in August last year under which farmers in the age group of 18 to 59 years will get an insurance cover of Rs 5 lakh each.

A top official told The Hans India that the LIC authorities informed the state government that the insurance provider has faced huge financial implications after the number of claims surpassed the total premium paid by the government in the last 12 months.

The government earmarked Rs 980 crore for the scheme last year but the corporation had to pay more than the total premium paid by the government to the beneficiaries who got Rs 5 lakh as insurance money after their death.

Officials said that LIC had declined to continue the scheme unless the government revised the premium. With no other option, the government agreed to the proposal of LIC and increased the premium on Wednesday.

"The corporation communicated the government that with the actual experience of mortality rate and other related expenses, the LIC felt the need to revise premium rate upwards to ensure the viability of scheme on the basis of actual experience on mortality and expenses," said Agriculture Secretary C Parthasarathi.

The state will now pay an amount of Rs 3,013 as premium and Rs 542 as GST. The total will be Rs 3,555.94. In addition to the above, LIC also requested for payment of Rs 30.94 crore as an additionality towards stamp duty to be paid by them. The scheme will cover 31.10 lakh farmers in the state.

The authorities said that the age limit to avail the scheme has not been increased as the guidelines set by the LIC will not allow. Farmer associations were demanding to enhance age limit above 60 so that a greater number of poor farmers can be covered under the insurance scheme.