Insurance for All: Expanding Coverage, Strengthening Social Security

📌 Summary:

• Insurance pools risk, enables financial continuity, and protects income, assets and long-term economic security — a key pillar of social protection

• IRDAI's vision: "Insurance for All by 2047" — every citizen to have appropriate life, health, and property insurance coverage

• India's insurance penetration: rose from 3.4% of GDP (FY 2018-19) to 3.9% (FY 2024-25); still well below global average of ~7%

• Life insurance dominates sector: 91% of total Assets Under Management (AUM); ~74% of total premium income

• Within non-life segment: health insurance leads at 41% of gross domestic premium, surpassing motor insurance

• Insurance Laws (Amendment) Act 2025 introduced key reforms: (1) Policyholders' Education and Protection Fund created (2) IRDAI empowered to order disgorgement of wrongful gains by insurers/intermediaries (3) Maximum penalty enhanced: ₹1 crore → ₹10 crore for non-compliance (4) Insurance intermediaries brought under penalty provisions

• Key challenge: low penetration in rural areas and among lower-income groups despite rising awareness

🎯 UPSC Relevance: GS2 – Governance & Social Justice: Social Security, financial inclusion; GS3 – Indian Economy: financial sector regulation, IRDAI

📝 Prelims Facts:

• IRDAI: Insurance Regulatory and Development Authority of India

• India insurance penetration (FY 2024-25): 3.9% of GDP

• "Insurance for All by 2047": IRDAI's vision goal

• Insurance Laws (Amendment) Act 2025: new Policyholder Education Fund; penalty raised to ₹10 crore

• Insurance penetration = gross premiums as % of GDP

🔑 Key Term: Insurance Penetration – ratio of gross insurance premiums to GDP; India at 3.9% (2024-25) vs global average ~7%, highlighting significant headroom for expansion as income and awareness grow