5 Reasons Why Rural Insurance Is So Important In India

Rural insurance is clearly very important in a country with nearly 70% rural population, the majority of which depends on agriculture for sustenance.

Yet, the on-ground reality is that awareness around agricultural or rural insurance is really low. Most farmers around the country hardly have any awareness around the very existence of rural insurance provisions.

Unfortunately, if and when tragedy strikes, these farmers and their families go through extreme hardships which can actually be avoided, only if there is widescale adoption of rural insurance.

Accordingly, this article aims to spread awareness about rural insurance as a whole as well as the wide-ranging benefits it offers so that a greater proportion of India’s rural populace can be prepared for unforeseen calamities (that can actually be dealt with, given rural insurance).

Diverse Coverage

An excellent aspect of rural insurance in the Indian context is that there is immense diversity as far as coverage options are concerned.

For instance, rural folks can obtain insurance cover for a number of different elements crucial to their day-to-day lives including:

  • Cattle Insurance
  • Poultry Insurance
  • Agricultural Equipment Insurance
  • Personal Accident Cover
  • Plantation Insurance

Together, these ensure that a number of different aspects related to day-to-day life in rural India – in the context of an agrarian lifestyle, are suitably covered.

Affordable Premium on Rural Insurance Programs

Clearly, costs are vital in the context of India’s rural population. Invariably living on the margins of society with very little to go on, high premium costs would be out of reach of most everyday farmers and their families.

Keeping this aspect in mind, rural insurance premium costs have been kept reasonably low. Whether it is rural insurance plans from companies like Tata AIG, IFFCO Tokio, or Aviva India, you will find that the premium on all these plans is truly within reach of most of India’s rural populace.

Easy and Prompt Claim Settlements

In the rural context, it is also important that things are kept simple and straightforward.

Accordingly, you will find that settlements on rural insurance claims are made fast and easy by companies operating in this space.

Talking specifically, we are looking at settlements being made within as little as 30 days or one month from the time a claim is filed, as long as all the necessary supporting documents are in place.

Even in situations where something is amiss and the insurance company needs to carry our due diligence on the claim filed, we find legitimate claims being settled within a maximum time frame of three months.

Rural Insurance
Rural Insurance is ensuring smiles on the faces of a lot of hard-working farmers and their families, all over India. Image Courtesy – New Delhi Times

Confidence and Peace of Mind to Farmers

One of the biggest stumbling blocks to an agrarian lifestyle is constant fear and insecurity regarding a wide range of calamities that could possibly strike, often when least expected.

These include both natural as well as man-made ones.

To give you an example, floods, as well as droughts, are a perennial problem in various parts of India. In spite of the regularity with which they strike, nothing concrete is done by the administrations in charge.

Agrarian workers remain constantly in fear of something untoward happening to their crops due to these vagaries of nature.

Alongside this, there are man-made situations which they have to deal with as well. For example, the prices on numerous agricultural commodities in India often tend to swing quite widely. Onion is one such commodity that often sees wild swings in its price.

All such situations cause immense hardships to farmers.

It is in situations like these that agricultural insurance helps bring about much-needed confidence to the rural population.

Tax Savings

For most agricultural workers working on smaller farms, this would hardly be an incentive but in case of those farmers with large farm holdings and yields, this does prove to be quite an important incentive since the premium amount paid against rural insurance can, in fact, be adjusted towards tax deductions.


Rural, agrarian insurance brings with it a wide range of advantages and benefits.

Awareness around it is definitely increasing tremendously as we see more and more farmers across India taking up rural insurance plans to ensure they remain protected from a variety of uncertainties that they are subject to.