When it comes to life-cover, disability and medical insurance, Indian seafarers as a professional group can easily qualify as the most poorly insured lot. Pariahs as we are (on terra firma), absence of any credible forum where our needs in these rapidly-changing times are genuinely debated and addressed further compounds the problem.
Indian seafarers serving under foreign flags cease to enjoy death/disability cover as soon as their tours of service end and they proceed home on leave. To maintain commensurate levels of cover whilst ashore, term policies with large premium outlay have to be purchased.
Insurance compensation for loss of life at sea or partial/total incapacitation available to a seafarer (or his next-of-kin) extends upto US$ 100,000/- or so. For incapacitation, the percentage of disability determines the quantum of compensation. These figures themselves appear to have suffered a 'freeze' for over a decade now (somebody please correct me if I am wrong) and both MUI and NUSI will render yeoman's service to seafarers, whom they represent, if these scales could be revised and reconciled with the living index in one of the world's fastest-growing economies.
Contrary to the above, the aviation industry, which has in recent years been the precursor to several training modules within the shipping industry, provides life cover and incapacitation compensation to its pilots even when they are on vacation or not flying! This is possible because pilots are covered under a Group Insurance policy. Pertinently, airline pilotage is regarded by insurance underwriters as no greater than the risks of modern living!
Having spoken to a senior LIC agent, I was given to understand that if a proposal were to be presented to their Head-Office, say, for a group of 50 seafarers, to buy life-cover for each member of the group, then any such policy would be a term insurance plan under which the individual could be provided life-cover upto a maximum age of 60 years, and depending on the age-profile of individual group members, the premium, the agent guessed wildly, for a sum assured of 50 lacs could be as low as Rs 4/- per one thousand rupees sum assured! If a seafarer can buy additional life-cover from LIC (or any other underwriter) by opting for one of their pure-term plans, one would have a decent life-cover at low cost. This is very promising and needs to be pursued by our unions working aggressively in mission-mode. WILL THEY? I'm sure there will be several hurdles in the path of any such proposal, but I do not believe these will be insurmountable. In the end, the benefits that accrue to seafarers will be immense.
Let us look at what kind of Group Insurance cover MUI does offer its members.
An officer's CoC (licence) can be insured with United India Indemnity Insurance by paying an annual fee of just Rs 200/-. The cover provides following benefits in case of a mishap :
1. Suspension of CoC : maximum compensation of Rs 64,000/- payable over 8 months.
2. Cancellation of CoC : Rs 1,20,000/- payable over 18 months.
3. Replacement with lower certificate : Rs 4,500/- pm for 8 months.
4. Legal assistance : maximum Rs 5,00,000/-.
5. Inquiry outside India : Rs 50,000/-.
Above are the maximum sums payable. Ship-type and P&I clubs with which the ship is entered would determine actual limits. These limits, once again, need to be increased significantly to restore parity with the living index. Additionally, MUI makes available a medical cover for seafarers (and their families) under various heads to recover annual medical expenses.
As a role model, the French, who rate very high on the European social security ladder, have an enviable system in place for seafarers. The affairs of mariners, including fishermen, fall under the purview of a marine administration (Affaires Maritimes), somewhat akin to the DG Shipping in India, and control issues like insurance for sailors and their families, retirement benefits, licencing, etc. There are about 20 different categories under which all seafarers are clubbed, depending on rank/type of vessel/age,etc. Let us say the Owner/Operator pays a seafarer a wage of Euro 4500/- pm. At the same time he deposits Euro 3000/- with the administration into a fund for the seafarer. The seafarer pays Euro 800/- into this fund from his wage, so that his net wage pm is Euro 3700/- (prior taxes). This is paid to him every month until he retires at age 55. Also, the mariner and his family have a social security which covers nearly 75-80% of the expenses incurred for medical consultations, hospitalisation and pharmacy. Upon retirement, the seafarer mentioned in the above category can hope to get a wage of Euro 2600/- pm (prior taxes) for the rest of his life.
Indian seafarers serving under foreign flags cease to enjoy death/disability cover as soon as their tours of service end and they proceed home on leave. To maintain commensurate levels of cover whilst ashore, term policies with large premium outlay have to be purchased.
Insurance compensation for loss of life at sea or partial/total incapacitation available to a seafarer (or his next-of-kin) extends upto US$ 100,000/- or so. For incapacitation, the percentage of disability determines the quantum of compensation. These figures themselves appear to have suffered a 'freeze' for over a decade now (somebody please correct me if I am wrong) and both MUI and NUSI will render yeoman's service to seafarers, whom they represent, if these scales could be revised and reconciled with the living index in one of the world's fastest-growing economies.
Contrary to the above, the aviation industry, which has in recent years been the precursor to several training modules within the shipping industry, provides life cover and incapacitation compensation to its pilots even when they are on vacation or not flying! This is possible because pilots are covered under a Group Insurance policy. Pertinently, airline pilotage is regarded by insurance underwriters as no greater than the risks of modern living!
Having spoken to a senior LIC agent, I was given to understand that if a proposal were to be presented to their Head-Office, say, for a group of 50 seafarers, to buy life-cover for each member of the group, then any such policy would be a term insurance plan under which the individual could be provided life-cover upto a maximum age of 60 years, and depending on the age-profile of individual group members, the premium, the agent guessed wildly, for a sum assured of 50 lacs could be as low as Rs 4/- per one thousand rupees sum assured! If a seafarer can buy additional life-cover from LIC (or any other underwriter) by opting for one of their pure-term plans, one would have a decent life-cover at low cost. This is very promising and needs to be pursued by our unions working aggressively in mission-mode. WILL THEY? I'm sure there will be several hurdles in the path of any such proposal, but I do not believe these will be insurmountable. In the end, the benefits that accrue to seafarers will be immense.
Let us look at what kind of Group Insurance cover MUI does offer its members.
An officer's CoC (licence) can be insured with United India Indemnity Insurance by paying an annual fee of just Rs 200/-. The cover provides following benefits in case of a mishap :
1. Suspension of CoC : maximum compensation of Rs 64,000/- payable over 8 months.
2. Cancellation of CoC : Rs 1,20,000/- payable over 18 months.
3. Replacement with lower certificate : Rs 4,500/- pm for 8 months.
4. Legal assistance : maximum Rs 5,00,000/-.
5. Inquiry outside India : Rs 50,000/-.
Above are the maximum sums payable. Ship-type and P&I clubs with which the ship is entered would determine actual limits. These limits, once again, need to be increased significantly to restore parity with the living index. Additionally, MUI makes available a medical cover for seafarers (and their families) under various heads to recover annual medical expenses.
As a role model, the French, who rate very high on the European social security ladder, have an enviable system in place for seafarers. The affairs of mariners, including fishermen, fall under the purview of a marine administration (Affaires Maritimes), somewhat akin to the DG Shipping in India, and control issues like insurance for sailors and their families, retirement benefits, licencing, etc. There are about 20 different categories under which all seafarers are clubbed, depending on rank/type of vessel/age,etc. Let us say the Owner/Operator pays a seafarer a wage of Euro 4500/- pm. At the same time he deposits Euro 3000/- with the administration into a fund for the seafarer. The seafarer pays Euro 800/- into this fund from his wage, so that his net wage pm is Euro 3700/- (prior taxes). This is paid to him every month until he retires at age 55. Also, the mariner and his family have a social security which covers nearly 75-80% of the expenses incurred for medical consultations, hospitalisation and pharmacy. Upon retirement, the seafarer mentioned in the above category can hope to get a wage of Euro 2600/- pm (prior taxes) for the rest of his life.
It is often said that French seafarers priced themselves out of the market, like most other Western European nationals. That, perhaps, is the reason why we have fewer than 200 French vessels at sea with 3-8 French mariners onboard. And not too many French sailors can be found freelancing with other fleets before age 55!
Do Indian seafarers run similar risks of over-pricing themselves out of the market?
I'm convinced we do not.
I'm convinced we do not.
2 comments:
Indian merchant mariners are obviously exploited by lower pay and poorer benefits than sailors from Western nations. That's why they are hired in the first place.
Indian seafarers are employed not only for their cost-effectiveness, but also because they're a highly skilled work-force. The largest tanker in the world periodically has an Indian master in Command! Cheers!
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