How about rail insurance of Rs10 lakh for a premium of Rs25?

Wednesday, 15 April 2015 - 6:05am IST | Agency: dna

Imagine paying Rs22 for a 24-hour train journey (apart from the ticket fare, of course) and getting Rs5 lakh as accident compensation, Rs5 lakh in case of hospitalisation arising out of a train accident and Rs50,000 for baggage loss?

Imagine paying Rs22 for a 24-hour train journey (apart from the ticket fare, of course) and getting Rs5 lakh as accident compensation, Rs5 lakh in case of hospitalisation arising out of a train accident and Rs50,000 for baggage loss?
In possibly the most ambitious plan to give insurance to railway travellers, the Indian Railway Catering and Tourism Corporation (IRCTC) has taken the first step towards what the railway firm calls 'travel insurance services'.
How will it work?
The time period of a journey itself has been divided into four parts — journeys of about eight hours, those up to 24 hours, up to 36 hours and the ones above 36 hours.
For example, for an insurance of Rs2.05 lakh, which consists of Rs1 lakh each for accident and hospitalisation and Rs5000 for baggage loss, the premium comes up to Re1 for an eight-hour journey, Rs1.25 for a 24-hour journey, Rs1.50 for a 36-hour journey and Rs1.75 for a journey above 36 hours.
Similarly, for an insurance of Rs4.25 lakh, where Rs2 lakh each is for accident and hospitalisation and Rs25,000 for baggage loss, the premium comes to Rs10 for an eight-hour journey, Rs11 for 24 hours, Rs12 for a 36-hour journey and Rs13 for travel above 36 hours.
When is it expected to be launched?
According to IRCTC managing director Dr AK Manocha, the tie-up with insurance major New India Assurance has been done and the final product should be launched in "a matter of weeks". "We will be offering a bouquet of services which those booking tickets on the IRTCTC website can opt for. The insurance will depend on the length, class, etc, of the journey but what we can assure the commuter is that it will be among the best travel insurance services," Manocha told dna over phone.
What's rlys doing to promote the plan?
IRCTC has started distributing forms to travellers in several trains nationwide to get feedback from commuters on what they think of the plan. The three questions that IRCTC has asked passengers is a) if there is need for travel insurance during a rail journey, b) if the sum assured is adequate, and c) if the premium amount is appropriate.
What is the aim of the scheme?
With over 21 million passengers everyday and penetration of IRCTC in rail ticket-booking now over 53%, officials believe that even if a million passengers opt for these services as time goes by, the corpus collected would be huge. The financial model, according to Manocha, is such that the money accumulated goes to New India Assurance, while the railways gets a fixed percentage as revenue-sharing.
Officialspeak
"For the railways, it may be a win-win situation. It anyway ends up paying out of its own pocket a considerable amount as compensation to train accident victims. The travel insurance will only mean that the railways will have a corpus, that too as commuter contribution, to pay insurance for such incidents," said a senior railway official.