Mandatory insurance for migrant workers: Policy promises vs reality in Bangladesh

Staff Correspondent: Bangladesh’s mandatory insurance scheme for migrant workers was introduced to provide financial protection. However, growing evidence suggests that many workers and their families are still not receiving the benefits they were promised.

The insurance programme became compulsory in 2019 for all outbound migrant workers. In December 2022, coverage was increased to up to Tk 10 lakh. Workers pay a one-time premium of Tk 1,000 before departure and the policy remains valid for five years. The Wage Earners’ Welfare Board collects the premium, while the state-owned Jiban Bima Corporation (JBC) handles claim settlements.

Under the policy, if a migrant worker dies abroad or within a specified period after returning home, their nominated beneficiary is entitled to receive up to Tk 10 lakh.

The same amount is payable in cases of permanent and total disability, such as the loss of both eyes, both hands, or both legs due to an accident. For partial disabilities, compensation ranges from Tk 1 lakh to Tk 5 lakh, depending on the severity of the injury.

Additionally, workers who lose their jobs for valid reasons within six months of migration are eligible for financial assistance of up to Tk 50,000.

Despite these provisions, many migrant workers face significant barriers in accessing benefits.

Claims are often rejected if the cause of death is listed as suicide. Workers who return home due to serious illness frequently find themselves excluded from coverage. Pre-existing medical conditions are also not covered, further limiting eligibility.

A major challenge is the lack of awareness. Many workers are unaware that they are enrolled in a mandatory insurance scheme or do not understand how to file a claim. As a result, their families often struggle to collect the required documentation, particularly when documents must be obtained from abroad.

The claims process can also be complex and time-consuming. This has created opportunities for intermediaries to exploit vulnerable families by demanding high commissions in exchange for facilitating payouts. In many cases, beneficiaries lose a significant portion of their compensation.

Experts say the insurance scheme remains a vital safety net for migrant workers. However, they stress that its effectiveness depends on improved awareness, simplified claim procedures and stricter oversight to prevent exploitation.