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21 June 2026

Insurance scheme for informal workers against heatwaves

This topic introduces a specific, innovative policy mechanism (parametric insurance) for climate-vulnerable informal workers, which is highly relevant for questions on social security, disaster management, and inclusive growth.

1 min read Day 1 of 2 2 questions 1 prelims

Notes

  • Parametric insurance for informal workers: A model where payouts are triggered by pre-set weather thresholds (temperature, humidity, rainfall, AQI) rather than individual claims.
  • Mechanism: No premium payment or claim filing required by workers; payouts are automated based on historical weather datasets.
  • Current status: Jan Sahas initiative covers 3,925 informal workers in Delhi-NCR; SEWA programme covers 2.25 lakh women across seven states.
  • Funding: Premiums are primarily paid by philanthropic organisations and CSR initiatives; no state government currently operates a heat-insurance scheme for workers.
  • Economic impact: Studies indicate that direct cash transfers during heatwaves allow workers to shift schedules to cooler hours, reducing health risks and income loss.
  • Challenges: The model lacks financial sustainability without external funding (government or philanthropic), as it does not have independent viability.
  • Climate context: WMO and IMD forecasts indicate rising heatwave frequency and intensity, exacerbated by phenomena like El Niño.

Part of a longer story

This is day 1 of 2 in Delhi government welfare schemes for informal and construction workers, which has been running since 21 June 2026. Reading it whole is usually worth more than reading today alone — the exam asks how something developed.

Questions

  1. Discuss the significance of parametric insurance as a tool for social security in the context of climate-induced vulnerabilities faced by informal workers in India. 150 words
    Attempt this — 150 words in 8 min
    0 / 150 words 8:00
  2. Extreme weather events pose a significant threat to the livelihoods and health of the informal workforce. In this context, evaluate the potential and limitations of parametric insurance models in providing a safety net for vulnerable populations. 250 words
    Attempt this — 250 words in 11 min
    0 / 250 words 11:00

Prelims

  1. Which of the following best describes the 'parametric insurance' model?

Syllabus

Topics

Sources

250words.in · https://250words.in/daily/2026-06-21/insurance-scheme-for-informal-workers-against-heatwaves