Insurance Cover to Disabled Persons

Insurance Cover to Disabled Persons

As per Insurance Regulatory and Development Authority of India (IRDAI) mentally challenged people get covered under medical insurance policies sold by Public Sector General Insurance Companies (PSGICs). Presently, the PSGICs provide mental illness cover to children if covered with or both parents simultaneously in the policy. Some PSGICs also provide mental illness cover to the persons under Employer-Employee Group Health Insurance Policies. While Life Insurance Risk coverage is offered to handicapped and mentally challenged persons by the life insurance companies (both public sector and private sector) based on their board approved underwriting policy, the disclosures made in the proposal form, every life insurance company will rate the persons to be insured from the point of view of risk assessment and underwriting as standard or sub-standard lives in order to determine acceptance of proposal and the premium to be charged. While there are no restrictions for providing insurance facilities to handicapped and mentally challenged persons, it is the professional decision of the insurance company based on their own risk bearing capacity and approach. There are no specific Regulations/Guidelines issued by the Authority in this regard.


The Government of India is implementing a scheme by name ‘NIRAMAYA’ through which the handicapped and mentally challenged persons are covered for medical treatment upto Rs. 1 lakh. Aam Admi Bima Yojana (AABY) is also a Government Social Security Scheme being administered through Life Insurance Corporation of India (LIC) that provides life/accident insurance protection to the rural and urban poor persons (including rural landless households) and people belonging to certain identified vocational groups. One such identified vocation is “Physically Handicapped Self-Employed Persons”.

IRDAI has also notified IRDA (Rural and Social Sector Obligations) 2002 mandating every insurer to cover the specified number of lives from the defined social sector market segment. Of the categories of lives that are defined as social sector lives, “other categories of persons” is one of the categories, which includes persons with disability as defined in the Persons with Disabilities (Equal Opportunities, Protection of Rights, and Full Participation) Act, 1995 and who may not be gainfully employed; and also includes guardians who need insurance to protect spastic persons or persons with disability.

This was stated by Shri Jayant Sinha, Minister of State in Ministry of Finance in written reply to a question in the Lok Sabha today.

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Use of Regional Languages in Banks



            The Reserve Bank of India (RBI) has advised the banks vide its Master Circular dated July 1, 2014 on Customer Service regarding use of regional languages in public/private sector banks as under:

·         Displaying indicator boards at all the counters in English, Hindi as well as in the concerned regional language. Business posters at semi-urban and rural branches of banks should also be in the concerned regional languages.
·         Providing customers with booklets consisting of all details of service and facilities available at the bank in Hind, English and the concerned regional languages.
·         Use of Hindi and regional languages in transacting business by banks with customers, including communications to consumers.
·         In order to ensure that banking facilities percolate to the vast sections of the population, banks should make available all printed material used by retail customers including account opening forms, pay-in-slips, passbooks etc, in trilingual form i.e., English, Hindi and the concerned Regional Language.
·         All cheque forms should be printed in Hindi and English. The customer may, however, write cheques in Hindi, English or in the concerned regional language.
·         Both the drop box facility and the facility for acknowledgement of the cheques at regular collection counters should be available to the customers and no branch should refuse to give an acknowledgement if the customer tenders the cheques at the counters. The above message is required to be displayed in English, Hindi and the concerned regional language of the State.

            This was stated by Shri Jayant Sinha, Minister of State in Ministry of Finance in written reply to a question in the Lok Sabha today.

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TDS on Recurring Deposits

The Government proposes to promote the recurring deposits scheme. It takes various measures on continuous basis to promote and popularize all small savings scheme including Post Office Recurring Deposit Scheme through electronic and print media as well as holding seminars, meetings and providing training to the various agencies involved in mobilizing deposits under these schemes. At present, no TDS is deducted on Post Office Recurring Deposit Scheme.

This was stated by Shri Jayant Sinha, Minister of State in Ministry of Finance in written reply to a question in the Lok Sabha today.

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Transparency in Government Procurement System

In order to improve transparency in Government Procurement system, Government of India has established Central Public Procurement Portal (CPPP). Instructions have been issued that it will be mandatory for all Ministries/Departments of the Central Government, their attached and subordinate offices, Central Public Sector Enterprises (CPSEs) and autonomous/statutory bodies to publish their tender enquiries, corrigenda thereon and details of bid awards on the CPP Portal. Further, all Ministries/Departments of the Central Government, their attached and subordinate offices have been asked to commence e-procurement in respect of all procurement with estimated value of Rs. 5 lakhs w.e.f. 01.04.2015 and Rs. 2 lakhs w.e.f. 01.04.2016. This improved transparency in the Government procurement system will make them more efficient and effective.

This was stated by Shri Jayant Sinha, Minister of State in Ministry of Finance in written reply to a question in the Lok Sabha today.

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Interest Rate on Fixed Deposit

The rate of interest on fixed deposits by senior citizens given by nationalized banks differs from bank to bank. The Reserve Bank of India (RBI) has deregulated the interest rates on term deposits with effect from October 22, 1997. Accordingly, banks are now free to fix the interest rates on term deposits subject to the approval of their respective Boards. Further, banks have been permitted to formulate, with the approval of their Boards of Directors, fixed deposit schemes specifically for resident Indian senior citizens, offering higher and fixed rates of interest as compared to normal deposits of any size. This additional interest rate is not applicable to any type of non-resident deposits.

Following the reduction in the policy rate by 50 bps in two equal steps on January 15 and March 4, 2015, out of a total of 27 Public Sector Banks (PSBs), 14 PSBs have reduced their median term deposit rates across maturities in the range of 0.07% to 0.75% so far (up to April 15, 2015).

The median term deposit rate for SBI was reduced from 7.50 per cent in August 2014 to 7.25 per cent in September, 2014. It remained unchanged at 7.25% thereafter.

This was stated by Shri Jayant Sinha, Minister of State in Ministry of Finance in written reply to a question in the Lok Sabha today.

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Launch of Pradhan Mantri Suraksha Bima Yojana and Pradhan Mantri Jeevan Jyoti Bima Yojana

The Finance Minister in his Budget Speech 2015-16, announced two Social Security Schemes in the Insurance Sector, namely the Pradhan Mantri Suraksha Bima Yojana (PMSBY) and Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY).

The Pradhan Mantri Suraksha Bima Yojana will be a one year accident insurance cover for Rs. two lakhs, renewable from year to year. Under the scheme, accidental death and disability cover of Rs. two lakhs is offered on account of an accident to all saving bank account holders in the age groups of 18 to 70 years for a premium of Rs. 12/- per annum per member. The scheme would be offered/administered through Public Sector General Insurance Companies (PSGICs) and other General Insurance Companies willing to offer the product on similar terms with necessary approvals and tie up with Banks for this purpose.

The Pradhan Mantri Jeevan Jyoti Bima Yojana will be one year life cover, renewable from year to year. Under this scheme, life insurance cover of Rs. two lakhs for death due to any reason is offered to all saving bank account holders in the age group of 18 to 50 years for a premium of Rs. 330/- per annum per member. The scheme would be offered/administered through LIC and other Life Insurance companies willing to offer the product on similar terms with necessary approvals and tie ups with Banks for this purpose.

The said schemes are being launched very soon. Premium under both these schemes will be paid by the subscribers and no subsidy has been sought on the premium by the Insurance Companies.

This was stated by Shri Jayant Sinha, Minister of State in Ministry of Finance in written reply to a question in the Lok Sabha today.

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Bifurcation of Top Posts in Public Sector Banks

The Government approved the proposal to separate the posts of Chairman and Managing Directors in Public Sector Banks (PSBs). While the Chairman would be non-executive, Managing Director and Chief Executive Officer (MD&CEO) would be the executive head. The splitting of the posts of Chairman and Managing Director is in accordance with the international best practices. While the Chairman would give an overall policy directions to the Bank, MD&CEO would be responsible for day-to-day management of the Bank. The separation would bring in inappropriate checks and balances and there would be accountability at the board level as the person executing will be answerable to a board that is headed by a different non-executive Chairman. The Government has appointed MD&CEOs in five PSBs and the process of selection of Non-Executive Chairman in Public Sector Banks in underway.

This was stated by Shri Jayant Sinha, Minister of State in Ministry of Finance in written reply to a question in the Lok Sabha today.

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Introduction of Long Term Bond of 40 Years Maturity

The Government has received proposal to launch long term bond of 40 years maturity. It is proposed to introduce a long tenor bond of 40 years maturity n H1 of 2015-16 in view of the elongation of maturity of the portfolio which is preferred to limit rollover risk and is internationally followed in the advanced countries.

Presently, Government of India securities yield curve spans 30 years and there is reasonable demand for bonds having maturities above 20 years from insurance companies and provident funds seeking to hedge long term liabilities. These investors have evinced interest in 40 year bond. In the backdrop of very flat yield curve as the cost may not be much higher than the 30 years security, it is proposed to launch a long term bond of 40 years in current financial year with a small issuance size. It would also help to gauge the quantum of demand of these bonds and the size can be increased/decreased based on experience.

This was stated by Shri Jayant Sinha, Minister of State in Ministry of Finance in written reply to a question in the Lok Sabha today.

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Tax Relief To Family Members of Differently Abled

Section 80DD of the Income Tax Act, 1961, inter alia, provides for a deduction to an individual or HUF, who is a resident in India, and

• Incurs expenditure for the medical treatment (including nursing), training and rehabilitation of a dependant, being a person with disability; or

• Pays any amount to LIC or any other insurer in respect of a scheme for the maintenance of a disabled dependant.

The section provides for a deduction of fifty thousand rupees if the dependant is suffering from disability and one hundred thousand rupees if the dependant is suffering from severe disability.

“Dependant” in the case of an individual, has been defined to mean the spouse, children, parents, brothers and sisters of the individual or any of them, and in the case of a Hindu undivided family, a member of the Hindu undivided family, if such person is dependant wholly or mainly on such individual or Hindu undivided family for his support and maintenance.

In view of the rising cost of medical care and special needs of a differently abled person, Finance Bill, 2015 proposes to amend section 80DD of the Income-tax Act so as to raise the limit of deduction in respect of a person with disability from fifty thousand rupees to seventy five thousand rupees and in respect of a person with severe disability, from one hundred thousand rupees to one hundred and twenty five thousand rupees.

This was stated by Shri Jayant Sinha, Minister of State in Ministry of Finance in written reply to a question in the Lok Sabha today.

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Increase in Basic Customs Duty on Imported Steel

The Government has received representations for imposition of 25% basic customs duty on imported steel to prevent dumping of steel.

As per World Trade organization’s (WTO) guidelines import duty can be imposed to the extent of 40%. The bound rate for basic customs duty on iron and steel failing under Chapter 72 is 25% or 40%. In Budget 2015-16, tariff rate of basic customs duty on iron and steel and articles of iron and steel was increased from 10% to 15%. However, no change was made in the existing effective rates of basic customs duty on these goods.

This was stated by Shri Jayant Sinha, Minister of State in Ministry of Finance in written reply to a question in the Lok Sabha today.