Can Livestock Insurance Protect Farmers From Sudden Losses? What Should They Check Before Buying a Policy?

A cow, buffalo, sheep or goat can represent a major investment for a livestock farmer. When an animal dies, the financial loss can affect household income and future production. The government-supported livestock insurance programme under the National Livestock Mission is designed to reduce this risk.

The programme has been changed to make insurance more accessible. The farmer’s share of the premium was reduced to 15%, while the remaining amount is shared by the Centre and states according to the applicable funding pattern. The number of animals eligible for subsidised coverage was also increased.

What does livestock insurance cover?

The insurance provides financial protection when an insured animal dies, subject to the terms and conditions of the policy. The National Livestock Mission includes livestock insurance as part of its sub-mission covering research, development, extension and innovation.

Farmers should read the individual policy carefully because coverage conditions, exclusions and claim requirements can apply. Insurance should not be treated as automatic compensation for every animal loss. The animal must be properly insured and the required procedures must be followed.

Under the current government-supported arrangement, the beneficiary’s share of the premium is 15% of the total premium value. The Centre and states bear the remaining share according to the funding category. For Union Territories, the government funding pattern provides 100% support for the remaining share.

This means the farmer does not necessarily have to pay the entire insurance premium. The exact amount payable will depend on the animal’s insured value and the premium charged under the applicable policy.

The animal is insured according to its current market value. Under the National Livestock Mission guidelines, the value is assessed jointly by the beneficiary and insurance company in the presence of a veterinary officer.

For cows and buffaloes, the guidelines provide a valuation method linked to milk yield and local market prices. The value of sheep, goats, pigs and other livestock is assessed through the prescribed process involving the owner, insurer and veterinary professional.

Why is ear tagging important?

Identification is a central part of livestock insurance. The guidelines require the insured animal to be properly tagged and uniquely identified. Existing identification from another government programme can also be used where applicable.

The guidelines specify a 12-digit unique animal identification number generated by NDDB. Photographs are also required, including an image showing the animal with its owner and another clearly showing the animal’s ear tag.

Farmers should protect the tag throughout the insurance period. Losing or damaging the identification can create problems when a claim is processed.

The current system allows coverage of up to 10 cattle units for a household under the subsidised arrangement. One cattle unit represents one large animal, while 10 sheep or goats count as one cattle unit and five pigs or rabbits count as one cattle unit.

A farmer can insure more animals beyond the subsidised limit by paying the full premium, according to the National Livestock Mission’s current information. Farmers should confirm the applicable limits when applying because eligibility can depend on the scheme and current guidelines.

The animal has to be identified, examined and valued before insurance cover is issued. The National Livestock Mission guidelines require examination by a registered veterinary practitioner and proper tagging before the insurance process is completed.

The owner also has to pay the applicable beneficiary share of the premium. The insurance company then issues the policy according to the prescribed process. Farmers should keep the policy document and animal identification details safely for future reference.

What happens when an insured animal dies?

The farmer should inform the insurer promptly and follow the claim procedure specified in the policy. Documentation may include the insurance policy, animal identification details, veterinary records and other documents required by the insurer.

The exact claim process can vary according to the insurance arrangement. Farmers should ask the insurer or implementing agency about the reporting deadline and required documents before a problem occurs.

Waiting until several days after an animal’s death can make the process more difficult. Farmers should therefore keep the insurer’s contact details available.

Yes. The government has approved Radio Frequency Identification technology as an additional identification method under the livestock insurance programme. It can be used alongside the existing identification system.

Digital identification can help connect an insured animal with its records. But farmers still need to understand the identification requirements applicable to their policy and ensure that the animal’s records remain accurate.

Technology can support the insurance process, but it does not remove the farmer’s responsibility to report changes and maintain the required records.

The government simplified the livestock insurance programme by reducing the beneficiary premium share from the earlier 20–50% range to 15%. It also increased the number of eligible animals from five cattle units to 10 cattle units per household for most categories.

The changes were made under the modified National Livestock Mission. The Department of Animal Husbandry and Dairying reported that 21.01 lakh livestock had been insured during the financial year covered in its March 2025 update.

What should farmers check before buying?

Farmers should first confirm that the insurer and policy are part of the applicable government-supported arrangement. They should then check the premium, insured value, coverage period, exclusions, identification requirements and claim procedure.

The farmer should also verify the animal’s valuation before signing the insurance documents. The policy should correctly identify the animal and contain the required tag and photographs.

If an agent is involved, farmers should ask for the policy document and payment receipt. They should not rely only on verbal promises about coverage or claim settlement.

Livestock insurance can reduce the financial impact of losing an insured animal, but it does not remove the need for good animal care. Farmers still need proper feeding, housing, vaccination, disease prevention and veterinary support.

The value of insurance depends on the animal’s economic importance, premium, insured value and policy conditions. A farmer should compare these factors before deciding which animals to insure.

For farmers with valuable dairy animals or several livestock units, understanding the insurance option can be part of managing the financial risk associated with animal ownership.