Types of Schemes

Micro-finance Scheme Models for the states

There are ten different models for the affordable schemes to the people:

Franchise Model – This implies that the Centre acts as the main head with the states as the Franchise in lines with the Centre and State List. The Centre disburses the main Umbrella Policy while the state buys the required portfolios under the Umbrella Policy.

Partial Payment – The Centre does a partial payment of the premium for the policy/ policies. The rest of the sum comes from the state and the desired segment of the population- BPL, APL or High APL.

Residual Payment – The Centre does the remaining balance after certain amounts of premium payments are made.

Helping Hand – The Centre does the saviour act by introducing a sudden helping hand, in case of any accident or natural calamity.

Profit-Cut – The Profits are distributed in a ratio among the Centre and the States, where the Centre takes a cut in the profit.

Evolution – The Centre disburses according to the needs to the franchise alias states, where all or some of the policies might be needed.

Co-payer Model – The Centre acts as a co-payer of the state in providing affordable healthcare schemes to the BPL and Just APL persons, with low or negligible premium values.

Subsidy Model – The Centre subsidizes the premium for the poor to pay within limits. If the earnings are say USD 50 a week, then USD 5 can be the at most cap of the premium limit.

Relationship Model – The Relation based Model works in generation of volumes and revenues for a state, where some of the money assured in profits are actually kept in a contingency fund of the Centre for addressing specific and desired needs.

Buy-Sell Model – The Centre sells insurance to the states, which buys it from the Centre. This symbiotic relationship actually helps in co-existence where the Umbrella Policy bought and sold helps in distributing profits.

Adjustment Model – The Premiums from the poor, States and Centre are adjusted in conjugation with the rising volumes and turnover. The profits earned are distributed wisely among the states and the Centre.

Waiver Model – The Centre waives some part of the premium for the poor, in fact totally all the premium in case of some needs.

Interest Model – The rising or falling interest after selling insurance to the states are adjusted.

Flat Scheme Model – The Centre issues premiums at a flatter rate. The centre pays 65% of the premium while the state pays the rest 35%.

Low Value Model – The premiums are at a very low and affordable cost, not just to BPL but also to the other segments.

Needless to say, that Tripura and Maharashtra would require different models based on their BPL lines, APL Lines, per capita income, rising population percentage in each segment, small entrepreneurship index, health index and affordable dwelling & income ratio.

References Used:

  1. http://en.wikipedia.org/wiki/Microinsurance
  2. http://www.thehindubusinessline.com/opinion/micro-insurance-macro-problems/article5176253.ece
  3. http://timesofindia.indiatimes.com/business/india-business/Micro-insurance-is-now-macro-business/articleshow/6654860.cms

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