The official reports of Insurance Regulatory Development Authority say that the Indian insurance sector is the biggest in the world, and is expected to touch 75 crore (750 million) by 2020.
But, it is a fact that India is still grossly uninsured. If both are correct, the reason for Indians abstaining from ensuring a comparable cover on their lives needs a closer look.
The government on their part has been putting a good effort to create a universal social security system for all Indians.
As per the Budget 2015-16, three flagship policies were announced by the Finance Minister Arun Jaitley, encouraged by the success of the Pradhan Mantri Jan Dhan Yojana.
The policies announced in the Budget will be enforced from June 1st 2015 and is open now for all Indians who have a savings account.
The policies launched are:
- Pradhan Mantri Suraksha Bima Yojana (for accidental death and disability),
- Pradhan Mantri Jeevan Jyoti Bima Yojana (life cover),
- Pension Yojana, a pension plan for the common man
- These schemes offer protective cover for life, accidental death and disability for all Indian adults who have a bank account. These schemes offer one year cover and are renewable on a yearly basis.The Pradhan Mantri Suraksha Bima Yojana
The Pradhan Mantri Suraksha Bima Yojana (PMSBY – Scheme 1 – for Accidental Death Insurance) offers accidental death cover for all applicants for a year starting from June 1, 2015 to May 31, 2016.
The total coverage, or sum insured, under the scheme is Rs 200,000 for death and Rs 100,000 for partial disability.
The premium for the scheme is fixed at Rs 12 per annum making it one of the cheapest accidental insurance schemes in the world.
With just Re 1 per month, every Indian citizen within the age group 18-70 years can now have an accidental death and disability insurance.
The premium can be deducted from your savings bank account through an auto debit facility.
The Pradhan Mantri Jeevan Jyoti Bima Yojana
The Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY -- Scheme 2 -- For Life Insurance Cover) is available for people within the age group 18-50 years.
With a premium payment of just Rs 330 per year, which can be auto-debited from your account, one can get a life cover of Rs 200,000 for death occurring out of any reason.
If you are joining the scheme before completing 50 years, the coverage can be extended up to the age of 55 years subject to payment of premium.
But life insurance claims are not admissible for the first 45 days of policy inception.
These schemes are administered by public sector insurance companies.
Private insurance companies are also likely to join the scheme in the coming years.
The premium paid will be tax-free under section 80C and also the proceeds will get tax-exemption u/s 10 (10D).
The government has also assured to use technology to reach out to the beneficiaries and thereby prevent leakages in the system.
The JAM (Jan Dhan Yojana, Aadhaar and mobile) number trinity will be used to transfer benefits in a cashless and direct way.
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