On 20 February 2004, the Union Cabinet cleared a subsidised insurance scheme for the 12.18 lakh Anganwadi workers and helpers in the country. Under the insurance scheme, each worker would be covered with an annual premium of Rs 280. This is done as a part of providing risk coverage for workers in the unorganised sector.

Each worker would have to pay Rs 80 as annual premium for the policy. Both the Union government and the Life Insurance Corporation of India (LIC) would contribute Rs 100 each towards the scheme. The expected per annum share of the government towards the premium contribution is Rs 14.61 crore.

An amount of Rs 50,000 will be given in a situation of accidental death or permanent total disability due to accident and an amount of Rs 20,000 for death other than by accident. Workers in the age group of 18-60 come under the purview of the scheme.

For the last many years, trade unions were demanding a group insurance scheme for the Anganwadi workers. At last the government has heeded to their plea. Though the cabinet has approved it, a government order on the implementation is yet to be issued to the Women and Child Development department of the Human Resources Development Ministry. According to the government, the scheme will come into effect from 1 April 2004. But, doubts have risen about its implementation because of the restrictions by the Election Commission in view of the Lok Sabha polls.