Insurance, Pension and Financial Inclusion in India: LIC, IRDAI, NPS, EPFO, Jan Dhan, Payments Banks and DICGC for SSC
Rahul Kumar
SSC Exam Expert & Content Editor
In this note
- 1.Insurance: Basics
- 2.Types of Insurance
- 3.Insurance Institutions in India
- 4.Pension System
- 5.Financial Inclusion
- 6.New Types of Banks
- 7.Deposit Insurance
- 8.Tricks to Remember
- 9.Quick Tips
- 10.Quick Revision Points
- 11.Practice Questions With Answers
- 12.How to Practise This Chapter
- 13.Frequently Asked Questions
PDF Notes: Insurance, Pension and Financial Inclusion in India: LIC, IRDAI, NPS, EPFO, Jan Dhan, Payments Banks and DICGC for SSC
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Insurance, pension and financial inclusion are growing topics in SSC economy and general awareness. This guide on insurance, pension and financial inclusion in India for SSC covers the regulators, the types of insurance, the pension schemes, the financial inclusion initiatives and the new types of banks, with tables, practice questions and FAQs.
Insurance: Basics
| Term | Meaning |
|---|---|
| Insurance | A contract in which the insurer promises to pay for a specified loss in return for a premium |
| Premium | The amount paid regularly to the insurer |
| Sum assured | The amount payable on the occurrence of the insured event |
| Nominee | The person who gets the money on the death of the policyholder |
| Reinsurance | Insurance of the insurer with another company; GIC Re is India’s national reinsurer |
| Principle of utmost good faith | Both parties must disclose all facts |
Types of Insurance
| Type | Examples |
|---|---|
| Life insurance | Term plans, endowment, whole life, ULIPs |
| General (non-life) insurance | Health, motor, fire, marine, travel, crop insurance |
Insurance Institutions in India
| Institution | Details |
|---|---|
| LIC (Life Insurance Corporation of India) | Life insurance was nationalised on 1 September 1956; LIC was set up with the LIC Act, 1956; HQ Mumbai; it was listed on the stock exchanges in May 2022 |
| GIC (General Insurance Corporation) | General insurance was nationalised in 1972; GIC Re is the national reinsurer |
| IRDAI (Insurance Regulatory and Development Authority of India) | Regulator of insurance; set up by the IRDA Act, 1999; HQ Hyderabad |
| ECGC | Export Credit Guarantee Corporation, insures export credit risk |
| ESIC | Employees’ State Insurance Corporation, health and cash benefits for workers |
- The FDI limit in insurance was raised from 26% to 49% in 2015 and to 74% in 2021.
- Government schemes: PM Jeevan Jyoti Bima Yojana (life cover of 2 lakh rupees), PM Suraksha Bima Yojana (accident cover of 2 lakh rupees) and Ayushman Bharat PM-JAY (health cover of 5 lakh rupees), all of 2015–2018.
Pension System
| Scheme | Details |
|---|---|
| National Pension System (NPS) | Launched in 2004 for the central government employees (except the armed forces) who joined from 1 January 2004; opened to all citizens in 2009; regulated by PFRDA (Pension Fund Regulatory and Development Authority, statutory since 2013) |
| Atal Pension Yojana (APY) | Launched in 2015 for the unorganised sector; guaranteed pension of 1,000 to 5,000 rupees per month after the age of 60 |
| EPFO (Employees’ Provident Fund Organisation) | Established under the EPF Act, 1952; the Employees’ Pension Scheme was started in 1995 |
| Public Provident Fund (PPF) | A savings scheme with a lock-in of 15 years and tax benefits |
| Old Pension Scheme | Defined benefit pension for those who joined before 2004 |
| Unified Pension Scheme | Announced in 2024 for central government employees |
Financial Inclusion
| Initiative | Details |
|---|---|
| Pradhan Mantri Jan Dhan Yojana (2014) | Launched on 28 August 2014; zero-balance accounts; RuPay debit card with accident insurance; overdraft facility |
| JAM Trinity | Jan Dhan, Aadhaar and Mobile numbers linked for the direct transfer of subsidies |
| Direct Benefit Transfer (DBT) | Started in 2013; subsidies go directly to bank accounts |
| Self-Help Groups (SHG)–Bank Linkage | Started by NABARD in 1992; the model for microfinance in India |
| Microfinance Institutions | NBFC-MFIs and others provide small loans to the poor |
| Business Correspondents | Bank agents who serve remote areas |
| Pradhan Mantri Mudra Yojana (2015) | Collateral-free loans up to 10 lakh rupees to small businesses (Shishu, Kishor and Tarun) |
| Stand-Up India (2016) | Loans to SC, ST and women entrepreneurs |
New Types of Banks
| Type | Details |
|---|---|
| Payments banks (2015) | Accept deposits up to a limit and give payment services but cannot lend; the first was Airtel Payments Bank; India Post Payments Bank was launched in 2018 |
| Small finance banks | Provide basic banking to small borrowers; e.g., AU Small Finance Bank, Equitas |
| Regional Rural Banks (1975) | Set up under the RRB Act, 1976, on the recommendation of the Narasimham Committee; owned by the Centre, the state and a sponsor bank |
| Cooperative banks | Urban and rural cooperative banks |
| Local area banks | Serve a small area |
Deposit Insurance
The Deposit Insurance and Credit Guarantee Corporation (DICGC), a subsidiary of the RBI, insures bank deposits up to 5 lakh rupees per depositor per bank (the limit was raised from 1 lakh in February 2020).
Tricks to Remember
- LIC: 1956; GIC: 1972; IRDAI: 1999; PFRDA: NPS; EPFO: 1952.
- Jan Dhan: 28 August 2014; APY: 2015; Mudra: 2015.
- Payments banks cannot lend; small finance banks can.
- DICGC covers deposits up to 5 lakh rupees.
Quick Tips
- Match each regulator with its sector: IRDAI with insurance, PFRDA with pension.
- Learn the year of each scheme.
- Remember that payments banks cannot give loans.
- Remember the DICGC limit.
Quick Revision Points
- LIC was formed in 1956; general insurance was nationalised in 1972.
- IRDAI regulates insurance; PFRDA regulates pensions.
- NPS was launched in 2004; APY in 2015.
- Jan Dhan Yojana was launched on 28 August 2014.
- DICGC insures deposits up to 5 lakh rupees.
Practice Questions With Answers
- Which body regulates insurance in India?
Answer: IRDAI - Which body regulates the National Pension System?
Answer: PFRDA - In which year was LIC formed?
Answer: 1956 - Which scheme provides zero-balance accounts?
Answer: Jan Dhan Yojana - Which scheme guarantees a pension for the unorganised sector?
Answer: Atal Pension Yojana - What is the deposit insurance limit per depositor?
Answer: 5 lakh rupees - Which was the first payments bank in India?
Answer: Airtel Payments Bank - Which act established the EPFO?
Answer: EPF Act, 1952 - What is JAM?
Answer: Jan Dhan, Aadhaar and Mobile - Which bank was launched by the Department of Posts in 2018?
Answer: India Post Payments Bank
How to Practise This Chapter
Practise 10 questions every day and write the steps on paper. Then attempt timed sets from our practice papers and the previous year papers page. See all topics on the Indian Economy notes page, read the previous topic Poverty, Unemployment and Inequality and the next topic Food Security, PDS and Subsidies.
Frequently Asked Questions
What is insurance?
A contract that protects against financial loss in return for a premium.
When was LIC formed?
On 1 September 1956 through nationalisation of life insurance.
Who regulates insurance in India?
IRDAI.
Who regulates the pension sector?
PFRDA.
What is the National Pension System?
A pension scheme started in 2004 that is now open to all citizens.
What is the Atal Pension Yojana?
A government pension scheme for unorganised-sector workers started in 2015.
What is financial inclusion?
Making banking and financial services available to all sections of society.
What is the Jan Dhan Yojana?
A scheme launched in 2014 to provide a bank account to every household.
What is a payments bank?
A bank that accepts small deposits and gives payment services but cannot lend.
What is the DICGC?
The RBI subsidiary that insures bank deposits up to 5 lakh rupees.
Is this topic asked in SSC?
Yes. These schemes and institutions are regularly asked in economy and current affairs.
What is a self-help group?
A small group of poor people who save and borrow together with the support of a bank.
Previous chapter
Poverty, Unemployment and Inequality in India: Poverty Line Committees, Types of Unemployment, MPI and Schemes for SSC
Next chapter
Food Security, PDS and Subsidies in India: NFSA 2013, FCI, Buffer Stock, DBT and Welfare Schemes for SSC Economy
Rahul Kumar
SSC Exam Expert & Content Editor
Rahul is a senior SSC exam strategist with 8+ years of experience helping aspirants crack CGL, CHSL and MTS exams. He writes in-depth notification breakdowns, exam pattern guides and preparation strategies.