The government has revised the existing rural life insurance scheme (RLIS) to Nu 30,000 from Nu 15,000 with effect from July 1.
This is as per the resolution made during the ninth session of the second parliament this year. The Royal Insurance Corporation Limited (RICBL) will also now operate, manage and disperse the scheme.
The revised scheme means an increase in the annual premium with subsidy from the government. The annual premium collection from members will now be Nu 195.
Of the Nu 195, finance minister, Namgay Dorji, said an individual should pay Nu 87, an increase from the last premium of Nu 45 while the government would pay the remaining Nu 108 as subsidy every year.
The scheme was revised because of rising costs where the existing payout amount was found insufficient to cover funeral rites according to the press release from the Ministry of Finance (MoF).
A tripartite Memorandum of Understanding was signed yesterday between MoF, Ministry of Home and Culture Affairs (MoHCA) and RICBL.
The MoU would provide life risk coverage to all citizens of Bhutan aged eight years and above under the “Revised Rural Life Insurance Scheme.”
The local government department used to manage the scheme with funding support from the MoF.
The objective of the revision according to the press release is to provide financial support to rural communities in times of death to ease financial burden through insurance coverage.
RLIS was introduced on January 1 1982 covering the entire population. The finance minister said the scheme was last revised in April 2009 by increasing the payout amount to Nu 15,000 from Nu 10,000 and an annual premium to Nu 45 from Nu 30.
RICBL being a premier insurance service provider with the expertise and rich experience in insurance and its wide reach had proposed to manage and administer the RLIS. The corporation has about 34 offices in the country.
RICBL’s board director, Karma Choden, said they would collect an annual premium of Nu 87 from individual citizens from September 1 until October 31 in collaboration with the local government for the year 2018.
“We would receive the annual premium subsidy of Nu 108 from the MoF by December 31,” she said. “Once we receive all the required documents, we will make sure the payout is paid within a week to the deceased’s family.”
The scheme will be reviewed every three years.
Yangchen C Rinzin