#4 Financial Products You Must Buy for your Domestic Workers
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Workers in the organized sectors enjoy insurance and pension benefits offered by their employers. Moreover, they are well-informed to save and invest for their future. But, what about those who work in unorganized sectors and are not always educated or informed enough to take financial decisions? This includes our domestic workers—drivers, cooks, cleaners, guards and babysitters— on whom we greatly depend for our daily tasks.
There are several social security schemes available for the welfare of low income groups but lack of awareness and availability of documents keeps these schemes out of their reach. As a result, they depend on high-charging money lenders and chit fund brokers for their needs.
As an employer, take responsibility of informing your domestic helpers about the importance of saving for retirement and buying insurance and help them enroll in these four schemes.
Jan Dhan Account
Foremost, help your domestic workers to open a bank account so that they can avail of other financial services. An account under Pradhan Mantri Jan Dhan Yojana (PMJDY) is ideal for low income groups as it allows easy access to various financial services, like savings account, insurance, loans etc, at minimal cost.
Accounts under PMJDY can be opened with a zero balance in any bank branch. Any one of these officially valid documents has to be furnished along with the application form – PAN, voter ID, passport, driving license, job card issued by NREGA, Aadhaar.
A major challenge for workers in unorganized sector is lack of valid documents. In such a case, you can help your help to open a Small Account. The person can open a small account by submitting two self attested photos. Take note that a small account is valid for one year within which the person has to apply for a valid document and submit it to the bank.
A Jan Dhan account comes with an additional benefit of an accident insurance cover of Rs 2 lakh.
Jeevan Jyoti Insurance Scheme
Jeevan Jyoti Bima Yojana (JJBY) is an insurance scheme that you must encourage your domestic workers to buy. Insurance is a financial cover for contingencies linked to death and disability, that can lead to complete or partial loss of income.
Most workers in the organised sector get life insurance cover from their employing companies, which is not the case with domestic workers. At a nominal annual premium of Rs 330, JJBY gives a life cover of Rs 2 lakh.
Pradhan Mantri Suraksha Bima Yojana is another insurance product that covers for death and disability due to an accident. The person has to pay an annual premium of Rs 12 for a cover of Rs 2 lakh for death and permanent disability or Rs 1 lakh cover in the case of partial permanent disability.
Atal Pension Yojana
This social security pension scheme ensures a guaranteed monthly pension of Rs 1,000, Rs 2,000, Rs 3,000, Rs 4,000 or Rs 5,000 and a defined corpus at the age of 60 years. People between 18 to 40 years of age are eligible to enroll in the scheme.
The defined pension depends on the contribution amount and its period (see table below). The earlier the person enrolls in the scheme, the lower will be his contribution. For instance, a 25 year old who wants a defined pension of Rs 3,000 will have to make a monthly contribution of Rs 226. Whereas, if a 35-year old enrolls in the scheme for the same pension, he will have to shell out Rs 543 per month.
A person can also opt for a quarterly or annual contribution. Delayed payments will attract a penalty whereas default in payment for 12 months will lead to the account getting deactivated.
Jan Arogya Health Insurance Scheme
Pradhan Mantri Jan Arogya Yojana, erstwhile known as National Health Protection Scheme, this health insurance scheme provides a health insurance cover of Rs 5 lakh per family per year for listed secondary and tertiary hospitals. There is no cap on the family size.
This scheme is free of cost.