Pradhan Mantri Suraksha Bima Yojana: A Comprehensive Guide to India’s Insurance Scheme
Introduction: The Pradhan Mantri Suraksha Bima Yojana (PMSBY) is a social security scheme introduced by the Government of India. It is designed to provide affordable insurance coverage to the underprivileged sections of the society. The scheme was launched in 2015, and since then, it has gained significant popularity due to its low premiums and comprehensive coverage. In this article, we will discuss the salient features of the PMSBY, its benefits, eligibility criteria, enrollment process, and claim settlement procedure.
- I. Overview of Pradhan Mantri Suraksha Bima Yojana
- A. Meaning and Purpose
- B. Implementation and Coverage
- C. Objectives and Goals
- II. Salient Features of PMSBY
- A. Insurance Coverage
- B. Premium and Payment
- C. Renewal and Termination
- D. Nomination and Cancellation
- III. Benefits of PMSBY
- A. Accidental Death Benefit
- B. Permanent Total Disability Benefit
- C. Permanent Partial Disability Benefit
- IV. Eligibility Criteria for PMSBY
- A. Age Limit
- B. Bank Account
- C. Citizenship and Residency
- V. Enrollment Process for PMSBY A. Enrollment Period B. Application Procedure C. Premium Payment and Receipt
- VI. Claim Settlement Procedure for PMSBY
- A. Documentation and Information
- B. Filing a Claim
- C. Claim Processing and Settlement
- VII. Comparison with Other Insurance Schemes
- A. Aam Aadmi Bima Yojana
- B. Pradhan Mantri Jeevan Jyoti Bima Yojana
- C. Jan Dhan Yojana
- VIII. Criticisms and Controversies A. Limited Coverage B. Lack of Awareness C. Inadequate Claim Settlement
- IX. Conclusion and Recommendations A. Importance of Social Security Schemes B. Need for Awareness and Outreach C. Suggestions for Improvement
I. Overview of Pradhan Mantri Suraksha Bima Yojana
A. Meaning and Purpose
- The Pradhan Mantri Suraksha Bima Yojana is a government-backed insurance scheme that provides coverage to individuals against accidental death and disability. The scheme is designed to provide financial assistance to the underprivileged sections of society, who are often unable to afford expensive insurance policies. It aims to ensure that all individuals, regardless of their socioeconomic status, have access to insurance coverage and financial protection.
B. Implementation and Coverage
- The scheme is implemented by the Ministry of Finance, Government of India, in collaboration with public and private sector insurance companies. The coverage is available to all individuals between the age of 18 and 70 years, who have a bank account and are citizens of India. The scheme provides coverage for accidental death, permanent total disability, and permanent partial disability.
C. Objectives and Goals
- The main objectives of the Pradhan Mantri Suraksha Bima Yojana are to provide affordable and comprehensive insurance coverage to the underprivileged sections of society, promote financial inclusion, and create a culture of savings among individuals. The scheme aims to reduce the financial burden on families in case of an unfortunate event, and ensure that they have access to financial resources to cope with the loss.
II. Salient Features of PMSBY
- A. Insurance Coverage The scheme provides coverage for accidental death, permanent total disability, and permanent partial disability. The coverage amount is fixed at Rs. 2 lakh for accidental death and
- Pradhan Mantri Suraksha Bima Yojana (PMSBY) is an accident insurance scheme launched by the Government of India in 2015. The scheme is available to all Indian citizens aged between 18 and 70 years and can be availed through banks. The salient features of PMSBY include a low premium of Rs. 12 per annum, accidental death coverage of Rs. 2 lakh, and permanent disability coverage of up to Rs. 1 lakh.
- The scheme covers death or disability caused by accidents and is renewable on a yearly basis. It also offers coverage for partial or temporary disabilities, with payouts based on the extent of disability. The scheme is beneficial for individuals who may not have access to insurance coverage due to financial constraints.
- The PMSBY scheme also has provisions for people who hold multiple bank accounts. In such cases, the individual is eligible for the insurance coverage from only one bank account. The scheme does not have any exclusion criteria based on occupation, income, or health status.
- In conclusion, the PMSBY scheme is a simple, affordable, and accessible insurance scheme that offers coverage for accidental death and disability. The salient features of PMSBY make it an attractive option for individuals looking for basic insurance coverage.
Pradhan Mantri Suraksha Bima Yojana: Providing Financial Security to India’s Poor
In India, many people still lack access to adequate financial security. Pradhan Mantri Suraksha Bima Yojana (PMSBY) is a government-run insurance scheme aimed at providing financial protection to the underprivileged sections of society. In this article, we will delve into the details of PMSBY and its significance in India’s socio-economic context.
Introduction to Pradhan Mantri Suraksha Bima Yojana
Pradhan Mantri Suraksha Bima Yojana is an insurance scheme launched by the Indian government in 2015 to provide accident insurance coverage to people from economically weaker sections of society. The scheme aims to provide affordable insurance coverage to people who cannot afford it otherwise. Under PMSBY, subscribers can avail of an insurance cover of up to Rs. 2 lakh for accidental death and disability for a premium of just Rs. 12 per annum.
How Does Pradhan Mantri Suraksha Bima Yojana Work?
The scheme is open to all Indian citizens aged between 18 to 70 years with a bank account. Interested individuals can apply for the scheme through their respective banks. The premium amount of Rs. 12 is deducted from the bank account of the subscriber on an annual basis. The scheme covers accidental death, permanent total disability, and permanent partial disability resulting from accidents. In the event of the subscriber’s death due to an accident, the nominee is entitled to the sum assured of Rs. 2 lakh.
Significance of Pradhan Mantri Suraksha Bima Yojana
PMSBY is an essential initiative taken by the Indian government towards financial inclusion and social security. With its low premium amount, the scheme has made it possible for people from low-income backgrounds to access insurance coverage. In a country like India where a large section of the population is still struggling with poverty and lack of resources, PMSBY has played a vital role in providing financial security to the underprivileged sections of society.
Impact of Pradhan Mantri Suraksha Bima Yojana
Since its launch, PMSBY has had a significant impact on the lives of many people. According to reports, the scheme has already enrolled over 23 crore subscribers. The scheme has been particularly beneficial for people from rural areas who often lack access to financial services. By providing a safety net in case of accidents, the scheme has provided a sense of security and peace of mind to many vulnerable sections of society.
Conclusion
Pradhan Mantri Suraksha Bima Yojana is a step towards ensuring financial security and social protection for all. The scheme has already proved to be a game-changer for millions of people across the country. With its affordable premium and easy accessibility, the scheme has made it possible for the underprivileged sections of society to access insurance coverage. In conclusion, the PMSBY is a crucial initiative towards building a more inclusive and secure society in India.
eligibility
- The scheme will be available to persons in the age group of 18 to 70 years having their own savings bank account and who have auto-debited the account for annual renewal on or before 31st May for the coverage period from 1st June to 31st May has given consent to do so.
policy term
- 1 year period from 1st June to 31st May
premium
- Keeping in mind that a large section of the population does not have any accident insurance cover
- The Pradhan Mantri Suraksha Bima Yojana (PMSBY) aims to provide an insurance coverage of just Rs. 20 per annum to provide insurance cover at a very affordable premium.
Annual Premium through ‘auto debit’ facility from bank account.
- present your claim within 30 days of the accident & claim settlement with 60 days of intimation.
- customers already enrolled in these two schemes should maintain sufficient balance in their account as on 31st May, 2018 to avoid discontinuation of insurance coverage.
FAQ,s
FAQs on PRADHAN MANTRI SURAKSHA BIMA YOJANA (PMSBY)
Q1. What is the nature of the scheme?
The scheme is a one year cover Personal Accident Insurance Scheme, renewable from
year to year, offering protection against death or disability due to accident.
Q2. What would be the benefits under the scheme and premium payable?
The benefits payable under the scheme on death or disability due to accident are as
follows:
Table of Benefits Sum Insured
a Death Rs. 2 Lakh
b Total and irrecoverable loss of both eyes or loss of use
of both hands or feet or loss of sight of one eye and loss
of use of hand or foot
Rs. 2 Lakh
c Total and irrecoverable loss of sight of one eye or loss
of use of one hand or foot
Rs. 1 Lakh
Premium payable is Rs.20/- per annum per member.
Q3. What do you mean by “accident”?
Accident means a sudden, unforeseen and involuntary event caused by external,
violent and visible means.
Q4. How will the premium be paid?
The premium will be deducted from the account holder’s bank / Post office
account through ‘auto debit’ facility in one instalment, as per the consent given by
the subscriber at the time of enrolment.
Q5. Who will offer / administer the scheme?
The scheme is offered / administered through the Public Sector General Insurance
Companies (PSGICs) and other general insurance companies willing to offer the
product with necessary approvals on similar terms, in collaboration with participating
Banks. Participating banks are free to engage any such general insurance company for
implementing the scheme for their account holders/subscribers.
Q5. Who will be eligible to subscribe?
All individual (single or joint) account holders of participating banks / Post office,
in the age group of 18 to 70 years are entitled to join. In case of multiple accounts
held by an individual in one or different banks/ Post offices, the person is eligible
to join the scheme through one bank / Post office account only.
Q6. What is the enrolment period and modality?
The cover shall be for one-year period stretching from 1st June to 31st May. At the
time of enrolment, subscriber has to submit his option on the prescribed form, to
join / pay by auto-debit from the designated individual bank / Post office account,
until further instructions, an amount of Rs.20/- (Rupees Twenty only) per annum,
or any amount as decided from time to time, which may be intimated immediately
if and when revised, towards renewal of coverage under the scheme.
Delayed enrolment / renewal subsequent to this date will be possible on payment
of annual premium.
Q7. Can eligible individuals who fail to join the scheme in the initial year join
in subsequent years?
Yes, new eligible entrants can also join in future years on payment of premium through
auto-debit. However, risk cover would start from the date of auto debit of premium
from the subscriber’s account.
Q8. Can individuals who leave the scheme re-join?
Individuals who exit the scheme at any point may re-join the scheme in future years by
paying the annual premium, subject to conditions that may be laid down. However,
risk cover would start from the date of auto debit of premium from the subscriber’s
account.
Q9. Who would be the Master policy holder for the scheme?
Participating Banks/ Post office are the Master policy holders for the scheme. A
simple and subscriber friendly administration & claim settlement process has been
finalized by PSGICs / other insurance companies in consultation with the
participating banks / Post office.
Q10. When can the accident cover assurance terminate?
The accident cover of the member shall terminate / be restricted accordingly on any
of the following events:
i. On attaining age 70 years (age nearer birth day).
ii. Closure of account with the Bank or insufficiency of balance to keep the
insurance in force.
iii. In case a member is covered through more than one account and premium is
received by the insurance company inadvertently, insurance cover will be
restricted to one account and the premium shall be liable to be forfeited.
Q11. What will be the role of the insurance company and the Bank?
i. The scheme will be administered by PSGICs or any other general insurance
company which is willing to offer such a product in partnership with banks /
Post offices.
ii. It will be the responsibility of the participating bank / Post office to recover
the appropriate annual premium in one instalment, as per the option, from the
account holders on or before the due date through ‘auto-debit’ process and
transfer the amount due to the insurance company.
iii. Enrolment form / Auto-debit authorization / Consent cum Declaration form
in the prescribed proforma shall be obtained, as required, and retained by the
participating bank / Post office. In case of claim, PSGIC / insurance company
may seek submission of the same. PSGIC / Insurance Company also reserve
the right to call for these documents at any point of time.
Q12. How would the premium be appropriated?
Appropriation of Premium:
1) Insurance Premium payable to Insurance Company: Rs. 20/- per annum per
member
2) Commission payable to Business Correspondents, agents, etc. by the insurer: Re.1/-
per member (for new enrolments only).
3) Administrative expenses payable to participating Bank by insurer: Re.1/- per annum
per member
Note: The amount of commission payable to Business Correspondents, agents, etc. as
specified in item 2) saved in case of voluntary enrolment by an accountholder through
electronic means shall be passed on as a benefit to the subscriber by correspondingly
reducing the amount of the Insurance Premium payable specified in item 1).
Q13. Will this cover be in addition to cover under any other insurance scheme
the subscriber may be covered under?
Yes.
Q14. Does the PMSBY cover death / disability resulting from natural calamities
such as earthquake, flood and other convulsions of nature? What about
coverage of suicide / murder?
Natural calamities being in the nature of accidents, any death / disability (as defined
under PMSBY) resulting from such natural calamities is also covered under PMSBY.
While death due to suicide is not covered, that from murder is covered.
Q15. Can all holders of a joint bank account join the scheme through the said
account?
In case of a joint account, all holders of the said account can join the scheme provided
they satisfy its eligibility criteria and pay the premium at the rate of Rs.20 per person
per annum through auto-debit.
Q16. Which Bank Accounts are eligible for subscribing to PMSBY?
All bank account holders other than institutional account holders are eligible for
subscribing to PMSBY scheme.
Q17. Are NRIs eligible for coverage under PMSBY?
Any NRI having an eligible bank account with a bank branch located in India is eligible
for purchase of PMSBY cover through this account subject to fulfilment of the terms
and conditions relating to the scheme. However, in case a claim arises, the claim benefit
will be paid to the beneficiary/ nominee only in Indian currency.
Q18. Is there any provision for reimbursement of hospitalisation expenses
following accident resulting in death or disablement?
No.
Q19. Who can claim insurance benefit in case of death of the bank account
holder who gave the enrolment form?
In case of death of the account holder/subscriber who enrolled in the scheme, claim
can be filed by the nominee/appointee as per the enrolment form or by the legal heir/s
in case there is no nomination made by the subscriber bank account holder.
Q20. What is the mode of payment of the claim amount?
Disability claim will be credited in the bank account of the insured bank account holder
/ subscriber. Death claim will be remitted to the bank account of the nominee / legal
heir(s).
Q.21. Will the family get insurance benefit if the account holder commits
suicide?
No.
Q.22. Is it necessary to report accidents to Police and obtain FIR for claiming
benefits under the policy?
In case of incidents like road, rail and similar vehicular accidents, drowning, death
involving any crime etc, the accident should be reported to police. In case of incidents
like snake bite, fall from tree etc, the cause should be supported by immediate hospital
record.
Q.23. If the insured is missing and death is not confirmed, will the legal heirs
get benefit of insurance?
PMSBY covers deaths due to accident as confirmed by documentary evidence only.
Q.24. What benefit will be payable if a person suffers partial disability without
irrecoverable loss of sight of one eye or loss of use of one hand or foot?
No benefit will be payable.
Q.25. Can an account holder get claim from more than one bank where he has
enrolled and premium has been debited?
No. The insured/ nominee shall be eligible for one claim only.
Q.26. Are PMSBY policies being introduced and serviced in association with
foreign insurance Companies?
There are no foreign insurance Companies directly operating in India. As permitted by
the Insurance Act and IRDA Regulations there are some foreign Companies in joint
ventures with Indian companies, where the stake of foreign insurers is restricted to
74% only.
Q.27. Will the PMSBY scheme which is being promoted aggressively and sold
in large numbers accrue huge profits to the foreign insurance Companies who
in joint venture with Indian entities have floated general insurance companies
and are operating this insurance cover?
Only Indian Insurance Companies as defined in the Insurance Act can operate in India.
The policy holders’ funds of all such insurance companies operating in India including
those with foreign partners within the 74% cap are to be invested in India as per
regulations and cannot be invested abroad. The premium charged for PMSBY has been
worked out based on actuarial calculations by considering all risk factors, current
mortality rates and adverse selection. Thus, there is no scope for any huge profits
accruing from the scheme.
Q.28. Why are foreign insurance Companies associated with PMSBY when
Public Sector General Insurance Companies (PSGICs) which are government
owned companies could have managed this scheme launched by the
government?
There are 21 general insurance companies operating in India, who are licensed by
IRDAI to carry on general insurance business in India.
- To promote competition and
better pricing and service to customers, all these companies are permitted to participate.
Moreover, they are all Indian insurance companies. - Their foreign partners, if any, have
only a stake in these companies within the stipulated 74% cap. - However, Public Sector
General Insurance Companies (PSGICs) are still the primary insurers involved in
operation of the scheme.
Q.29. In case of non-settlement of claims is it possible to proceed legally against
the foreign insurers in India?
There are no foreign insurance Companies directly operating in India.
- As permitted by
the regulations there are Companies operating as joint ventures with Indian companies,
where the stake of foreign insurers is restricted to 74% only. By definition, - these are
Indian insurance companies. All these companies are subject to Indian laws and there
is no bar against proceeding legally against them.
Q.30. Rates of premium may be increased, or the Companies may discontinue
the schemes in future?
Insurance is like any other product. While rates can go up in future, with 21 general
insurance Companies operating in India, due to competition among them, prices are
likely to remain stable. - It is expected that with the design of the PMSBY cover and it’s
pricing, the scheme will be viable, and there is little chance of discontinuing. In any
event, even if a particular company discontinues, banks have several other options to
tie up with.