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 Micro Credit and Self Help Group (SHGs)  

SBI Life ‘Shakti’

Life Insurance Cover with Saving Facility for Self Help Groups

SBI Life Insurance Company (SBI Life) introduced in March, 2002, for the first time in the country, a group life insurance scheme (Super Suraksha) under which all account holders of banks are offered life insurance under a pure term insurance cover with no refund of premium on survival. SBI Life has now introduced another innovative product for the most vulnerable section of the population, a unique insurance scheme especially designed for the Self Help Groups.

  • Every SHG has a maximum of 20 members, usually 10-15 members each. The proportion of women SHGs is predominant with about 85% of the total membership. The composition of an SHG may change from time to time due to any member exiting to pursue individual vocations, no new members being inducted. The maximum number of members is, however, limited to 20. Considering the basic purpose of Self Help groups (SHGs) as promoting the habit of thrift and saving among the members, the new group insurance scheme exclusively for SHGs, called ‘SHAKTI’, extends life insurance cover facility to SHG members with a special feature, i.e., refund of the entire life insurance premium amount paid if the SHG member survives at the end of a 10 year period.

  • The product features of ‘Shakti’, are as under:

  1. This is a group insurance scheme. Hence, the paper work and administrative hassles are kept to the minimum.

  2. Any SHG that has been in existence for more than one year, maintains a savings account with a bank and has preferably been linked to the bank with a credit facility which is conducted satisfactorily will be eligible to join the group insurance scheme on a voluntary basis.When an SHG opts to join the group insurance scheme, every member of the SHG between the age of 18 years and 50 years will be offered life insurance of Rs. 25,000 to cover death due to any reason.

  3. The life cover will be available on the basis of a good health declaration, without any medical examination. It will be mandatory for all members, present and future, of the SHGs that opt to join ‘Shakti’ to be covered under the insurance arrangement.

  4. The premium is payable annually in advance by the SHG in a lump sum @ Rs. 400 for each eligible member, irrespective of his/her age.

  5. The insurance cover will be available to the SHG members as long as they remain in the SHG and premiums are paid, subject to a maximum period of 10 years.

  6. After 10 years, the entire premium paid by a member (Rs. 4000) will be refunded by SBI life.

  7. The SHG will advise the bank branch the names of the members covered under insurance as at each annual premium payment date. The branch covered will maintain simple record of names of members as advised by each SHG and advise SBI Life the number of members of the SHG along with every annual remittance of premium.

  8.  In the event of death of any SHG member, the bank will forward a simple claim form signed by the secretary of the SHG along with a certification. SBI Life will settle the claim, and send the cheque in the name of the bank, with a request to pass on the amount to the SHG as appropriate.

  9. The scheme provides an exit facility if an SHG member enjoying life cover leaves the SHG before completing the total 10 year duration. New members joining the SHG after the SHG has joined ‘Shakti’ will be offered the benefit of life cover.

  10.  At the end of ten years from the date the SHG joined the group insurance scheme, SBI Life will refund the premiums paid by the members continuing in the SHG at that time, with 100% refund of premium to those who have paid 10 annual premiums and at graded scales to those who have paid premiums for shorter periods.

SBI Life-Shakti

1. Nature of product

Group insurance cover for members of SHG with facility of refund of entire/part of premiums paid at end of the term, to the survivor.

2. Main age of joining

18 years of age (as on last birthday)

3. Max age of joining

50 years of age (as on last birthday)

4. Sum assured

Rs. 25,000/-

5. Survival benefits

Refund of premiums paid

6. Death benefits

Rs. 25,000/- will be paid to the nominee via Bank & SHG.

7. Period of cover

10 years from the date of SHG joining the scheme.

8. Mode of premium


9. Premium amount

Rs. 400 per annum, irrespective of the age.

10. Procedure for joining

Authority letter of the SHG to the bank debiting their account with premium amount along with Consent-cum-Authority-cum Good health declaration by the members.

11. Medical criteria

A simple declaration of good health letter from the joining members.

12. Claim procedure

i)        The claim raised by SHG will be routed through the Branch Manager/NGO

ii)       The claim will be settled by SBI Life in the name of the SHG through the Branch Manager/NGO.

iii)     SHG will pay the amount to the nominee after deducting individual dues on account of Loans/Advances/Dues.

Reserve Bank of India Circular on Micro Credit  | SGHs under PMRY| Rural Housing Loans to Self Help Groups