Prospect of universal insurance policy

A move now underway, according to a report carried in the FE on Tuesday last, for introduction of a universal insurance policy in the country under the National Insurance Policy 2014 looks highly appealing. The Financial Institutions Division (FID) under the Ministry of Finance (MoF) has accordingly asked the Insurance Development and Regulatory Authority (IDRA) to work on the instruments necessary for bringing eight major areas of national importance under coverage of the indemnifying contract against losses of life and property. Indeed, the National Insurance Policy 2014 sought to introduce a universal life insurance policy. Now the sector-specific emphasis is aimed at covering some of the potentially more responsive areas. All types of transports, including metro rails and trains, shopping malls, cattle and poultry sector, factories including readymade garment (RMG), universities will be brought under different categories of policies such as group, insurance, fire insurance, farm insurance and health insurance.
In a country where insurance coverage is a negligible 0.4 per cent, the network of such policies certainly deserves expansion at a reasonable rate. But there is doubt if the time is propitious for such a move. People's confidence in the system of insurance is very low in this country. At a time when raging inflation is dealing literally mortal blows to the low-income and middle-class people, their primary concern is to survive somehow. They are unlikely to be much interested in paying insurance premiums. Even in case of group insurance for factory workers, the deduction of a puny amount for the purpose would be unaffordable for low-wage labourers. Similarly, students of universities who have to meet their own living expenses in cities will not find this extra premium burden lucrative. Much as the arrangement may have merit, it is the affordability of premiums that will stand in the way of making implementation of insurance policies a success.
Admittedly, if framed in a way providing payment of premiums in favour of workers by employers in case of factories and industries, insurance policies may take off in that particular area. The transport sector is likely to be a strong candidate in this regard, so may be poultry and cattle farms because of the high risk the former faces and the moderately healthy state of the latter. But how the students from not so well-off backgrounds can be brought under coverage of health insurance is not clear. One way of doing this may be the creation of a special assistance fund from which payment of premiums against loans for students will be made. The loans will be repaid when students complete their studies and are employed.
Last but not least. Eight major productive areas have been considered where cattle and poultry have been specifically mentioned. But missing from this is the main crop paddy or other crops. Why? Is the staple rice less important than the commodities produced by those sectors? Food safety of the country should be the number one issue. Growers of paddy, various other crops including vegetables and fruits have been working wonder for decades to provide for the nation. But these farmers are missing from insurance reckoning. This is unacceptable. Crop insurance deserves priority before many of the areas selected.