HYDERABAD: Due to non-payment of premium by the state government under the Rythu Bima scheme, the Life Insurance Corporation (LIC) has stopped processing claims. This has resulted in a pile-up of claims, which in turn has led to kin of deceased farmers facing severe hardship.
According to sources, the government is yet to pay Rs 441.23 crore towards premium to the LIC.
It may be mentioned here that the state government launched the Rythu Bima scheme in 2018 to provide life insurance cover to farmers. Under this scheme, the state government pays the entire premium amount without burdening the farmers, and in the event of a farmer’s death due to any accident or natural causes, his or her nominee receives an insurance amount of Rs 5 lakh.
Sources said that of the total premium amount of Rs 1,359.56 crore to be paid in 2025–26, the government paid Rs 923.11 crore to the LIC. Of this, Rs 679.78 crore was paid on August 14, 2025 towards the first half-yearly instalment and Rs 243.33 crore towards the first tranche of the second half-yearly premium on February 14, 2026. But the government is yet to pay the balance premium of Rs 441.23 crore, they added.
Revealing that due to non-payment of Rs 441.23 crore pending premium, the LIC is not processing the claims, sources added that the corporation has categorically made it clear that it will not process further claims until the government pays the pending amount. Because of this, 7,606 claims worth Rs 380.03 crore are pending.
As a large number of claims are pending, kin of deceased farmers are being forced to make repeated visits to the offices concerned to know the status of their claims.
They are also visiting the Secretariat to meet the officials, urging them to expedite the claim process. But to their dismay, the officials are stating that “nothing is in their hands” with regard to the clearing of claims.
With pressure from kin of deceased farmers mounting, the officials recently brought this issue to the notice of Chief Minister A Revanth Reddy. The officials also proposed the release of Rs 441.23 crore towards the second half-yearly premium.
Officials explained that 3,919 claims worth Rs 195 crore are expected to be processed by August 14, if the government immediately pays the pending premium. They said that farmers are expected to receive about Rs 570 crore in the form of claims from LIC to the farmers if the government pays the entire pending premium amount.
Sources, meanwhile, revealed that the chief minister has responded positively to the proposal to release the pending amount.