Parametric Heat Insurance for Informal Workers
Social Justice & Development
- PYQs6
- Articles1
Background
This concept addresses the socio-economic vulnerability of informal workers to climate change impacts, explores innovative financial instruments for social protection, highlights gaps in existing welfare schemes, and discusses climate adaptation strategies for vulnerable populations. It is relevant for understanding social justice, environmental governance, and economic resilience.
Parametric insurance is an innovative financial instrument that provides payouts based on the occurrence of a pre-defined event or index (e.g., temperature, rainfall) rather than actual loss assessment. For vulnerable populations like informal workers, it offers a rapid, transparent mechanism to mitigate economic shocks and health risks arising from climate change impacts such as extreme heatwaves, thereby supplementing traditional social security measures.
Facts & tables
- Trigger-based payout
- Payments are automatically disbursed when a pre-set weather index (e.g., temperature, humidity) crosses a defined threshold, eliminating the need for individual claims.
- Protection for informal sector
- Aims to safeguard informal workers from income loss and health risks during extreme heat events, allowing them to take time off without financial penalty.
- Funding mechanism
- Premiums are often paid by philanthropic organizations, CSR initiatives, or government subsidies, as informal workers typically cannot afford them.
- Behavioral impact
- Studies suggest that such payouts enable workers to shift schedules to cooler parts of the day and rest, improving health outcomes.
| Type | Reference |
|---|---|
| Conceptual area | Environment & Ecology |
| Conceptual area | Social Justice & Development |
| Body | Role |
|---|---|
| Jan Sahas | Implements |
| Go Digit General Insurance | Provides insurance |
| Self-Employed Women’s Association (SEWA) | Implements |
| Indian Meteorological Department (IMD) | Provides data |
Prelims angle
Prelims angle: Multi-statement analysis
Prelims angle: Factual recall
- Trigger-based payouts, no claims process for quick relief.
- Protects informal workers from income loss and health risks due to heatwaves.
- Often relies on third-party funding (CSR, philanthropy) for sustainability.
- Examples include Jan Sahas and SEWA initiatives in India.
- Addresses climate change adaptation and gaps in social security for vulnerable populations.
| Year | Framing tags |
|---|---|
| 2026 | Multi-statement analysis, Factual recall |
| 2024 | Factual recall, Conceptual understanding |
| 2021 | Multi-statement analysis, Factual recall |
| 2017 | Terminology-based question, Policy measures |
| 2016 | Multi-statement analysis, Factual recall |
| 2016 | Multi-statement analysis, Factual recall |
Timeline
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Environment & Ecology
Conceptual area
-
Social Justice & Development
Conceptual area
-
Prelims 2016
Multi-statement analysis, Factual recall
-
Prelims 2016
Multi-statement analysis, Factual recall
-
Prelims 2017
Terminology-based question, Policy measures
-
Prelims 2021
Multi-statement analysis, Factual recall
-
Prelims 2024
Factual recall, Conceptual understanding
-
Prelims 2026
Multi-statement analysis, Factual recall
-
Insuring the informal worker against the heat
Parametric heat insurance provides automatic, trigger-based payouts to informal workers to mitigate income loss and health risks from extreme heat, often funded by third parties, serving as a crucial climate adaptation and social security tool.
See also
No related topics linked yet.
Past papers
2016–2026 · 5 questions
In the news
Insuring the informal worker against the heat
Parametric heat insurance provides automatic, trigger-based payouts to informal workers to mitigate income loss and health risks from extreme heat, often funded by third parties, serving as a crucial climate adaptation and social security tool.
Try these PYQs
Regarding ‘Atal Pension Yojana’, which of the following statements is/are correct?
1. It is a minimum guaranteed pension scheme mainly targeted at unorganized sector workers
2. Only one member of a family can join the scheme
3. Some amount of pension is guaranteed for the spouse for life after the subscriber’s death.
Select the correct answer using the code given below:
Statement 1 is Correct: Atal Pension Yojana is a minimum guaranteed pension scheme primarily targeted at unorganized sector workers in India. It encourages saving for retirement through regular contributions during their working years. Statement 2 is Incorrect: There is no restriction on the number of family members who can join the Atal Pension Yojana scheme. As long as they meet the eligibility criteria (age 18-40 and savings bank account), multiple members within a family can enroll. Statement 3 is Correct: Atal Pension Yojana provides a pension benefit for the spouse after the subscriber's death. The spouse becomes the nominee and receives a pension, though the specific amount might differ depending on the chosen pension plan by the subscriber. Hence, option C is the correct answer.
With reference to the casual workers employed in India, consider the following statements:
1. All casual workers are entitled for Employees Provident Fund coverage.
2. All casual workers are entitled for regular working hours and overtime payment.
3. The government can by a notification specify that an establishment or industry shall pay wages only through its bank account.
Which of the above statements are correct?
Statement 1 is not correct: The Government had launched a scheme viz Casual Labourers (Grant of Temporary Status and Regularization) Scheme of Government of India, 1993. As per the scheme, Temporary status would be conferred on all casual labourers who were in employment and who have rendered a continuous service of at least one year, which means that they must have been engaged for at least 240 days (206 days in case of offices observing 5 days week). Statement 2 is correct: The Supreme Court has decreed that casual workers are also entitled to social security benefits as stipulated in the Employees Provident Funds and Miscellaneous Provisions Act. The Court's ruling stemmed from its interpretation of Section 2(f) of the EPF Act, wherein the definition of an "employee" encompasses a broad scope, including any individual engaged directly or indirectly in connection with an establishment's work and receiving wages. A bench of the Supreme Court affirmed this viewpoint. Statement 3 is correct: The government has the authority to specify through a notification that an establishment or industry is obligated to disburse wages exclusively via its bank account.
What is the purpose of ‘Vidyanjali Yojana’?
1. To enable the famous foreign educational institutions to open their campuses in India.
2. To increase the quality of education provided in government schools by taking help from the private sector and the community.
3. To encourage voluntary monetary contributions from private individuals and organizations so as to improve the infrastructure facilities for primary and secondary schools.
Select the correct answer using the code given below :
Statement 1 is incorrect. Vidyanjali Yojana is not focused on attracting foreign universities to set up campuses in India. Statement 2 is correct. Vidyanjali Yojana aims to improve government schools by leveraging resources and expertise from the private sector (retired professionals, NGOs) and the community (volunteers). Statement 3 is incorrect. While the initiative might indirectly lead to improved infrastructure due to volunteer efforts, its primary focus is not on monetary contributions for infrastructure development.
With reference to the 'Pradhan Mantri Surakshit Matritva Abhiyan', consider the following statements:
1. This scheme guarantees a minimum package of antenatal care services to women in their second and third trimesters of pregnancy and six months post-delivery health care service in any government health facility.
2. Under this scheme, private sector health care providers of certain specialities can volunteer to provide services at nearby government health facilities.
Which of the statements given above is/are correct?
* Statement 1: Incorrect. The Pradhan Mantri Surakshit Matritva Abhiyan (PMSMA) provides a minimum package of antenatal care (ANC) services only during the second and third trimesters of pregnancy. It does not cover post-delivery health care services for six months. The focus is on ensuring safe pregnancies through early detection and management of high-risk cases. * Statement 2: Correct. Under PMSMA, private sector health care providers (such as gynecologists, radiologists, and physicians) can volunteer to provide free services at nearby government health facilities on the 9th of every month. This public-private partnership enhances access to specialized care for pregnant women.
Which of the following statements with regard to the persons with disabilities in India is/are correct ?
1. The Rights of Persons with Disabilities Act, an Act passed by the Parliament of India in 2018, mandates reservation in education and employment, places a legal duty on Governments to ensure accessibility and non-discrimination.
2. The Sugamya Bharat Abhiyan focuses on achieving universal accessibility for Persons with Disabilities across three key domains — built infrastructure, transport systems and information and communication technology.
3. The National Divyangjan Finance and Development Corporation (NDFDC) is a public sector organisation set up by the Ministry of Corporate Affairs as a not-for-profit company to promote entrepreneurship among Persons with Disabilities (PwDs).
Select the answer using the code given below :
Statement 1 is Incorrect: The Rights of Persons with Disabilities (RPwD) Act was passed by the Parliament of India in 2016, not 2018. It aligns with the UN Convention on the Rights of Persons with Disabilities and places a legal obligation on governments to ensure non-discrimination and accessibility. It also mandates reservations for PwDs, such as increasing the quota to 4% in government employment and 5% in higher education. Statement 2 is Correct: The Sugamya Bharat Abhiyan (Accessible India Campaign) was launched in 2015 by the Department of Empowerment of Persons with Disabilities (DEPwD). It focuses on achieving universal accessibility for Persons with Disabilities across three key domains: built infrastructure (barrier-free public buildings), transport systems (accessible railways, airports, and roads), and information and communication technology (accessible government websites and digital ecosystems). Statement 3 is Incorrect: The National Divyangjan Finance and Development Corporation (NDFDC) is a Central Public Sector Undertaking registered as a not-for-profit company to provide concessional financial assistance to promote entrepreneurship, self-employment, and higher education among PwDs. However, it was set up under the aegis of the Ministry of Social Justice and Empowerment, not the Ministry of Corporate Affairs. Therefore, the correct option is B.
Show 1 more PYQs
With reference to ‘Pradhan Mantri Fasal Bima Yojana’, consider the following statements:
1. Under this scheme, farmers will have to pay a uniform premium of two per cent for any crop they cultivate in any season of the year.
2. This scheme covers post-harvest losses arising out of cyclones and unseasonal rains.
Which of the statements given about is/are correct?
The Pradhan Mantri Fasal Bima Yojana (PMFBY) is a government-sponsored crop insurance scheme. Statement 1 is Incorrect: Under this scheme, farmers have to pay a uniform premium of 2% for all Kharif crops, 1.5% for all Rabi crops, and 5% for commercial/horticultural crops. The premium rate is not uniform for all crops in all seasons. Statement 2 is Correct: The scheme does cover post-harvest losses arising out of cyclones and unseasonal rains. Hence, option B is the correct answer.