Govt could raise coverage limits of PMJJBY & PMSBY: Know the details
Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and Pradhan Mantri Suraksha Bima Yojana (PMSBY) are two government-run insurance policies for the masses which offer financial security for millions. The government is now considering to raise the coverage ceiling from Rs 2 lakh by a significant amount. Read on to know the details.
Kolkata: Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and Pradhan Mantri Suraksha Bima Yojana (PMSBY) are two affordable government-run insurance policies that offer insurance coverage for the masses at a throwaway premium. However, the amount of Rs 2 lakh that is offered as the coverage is not enough nowadays and the government is planning to raise the ceiling significantly. Both insurance schemes may offer the option of increasing coverage from two lakh to five lakh. However, it will need the beneficiaries to pay a higher premium too.
More than 75 crore people are enrolled in both these schemes. Under PMJJBY, those between the ages of 18 and 50 years receive life insurance of Rs 2 lakh, while PMSBY provides accident insurance of Rs 2 lakh for those between the ages of 18 and 70 years. There are a few suggestions that have come up to make the policy purchases simpler. Insurance regulator IRDAI has also set up a working group to address the matter. Reports have stated that the government could introduce modifications so that customers can choose insurance coverage based on their needs and the ceiling will be Rs 5 lakh instead of the Rs 2 lakh available currently.
Proposals under consideration
Right now the annual premium for a sum assured of Rs 2 lakh in under PMJJBY is Rs 436. The annual premium for PMSBY is Rs 20. If the amount is raised to Rs 5 lakh, it would be appropriate for the need of many given the effects of inflation over the past few years. The proposal also includes a feature that would allow a customer to pay premiums for up to three years in one instalment. It could prevent situations of closures of the policies due to insufficient bank balance and auto-debit failures.
Digital system to improve
The availability of systems like UPI, Aadhaar, Jan Dhan, and digital banking units can be incorporated to simplify onboarding and renewals for the insurance policies. It will also accelerate the settlement of claims. However, there are a few points to consider about those at the bottom of the financial pyramid. Many experts have pointed out that raise the coverage will hike premiums that could take the policies out of the access of financial vulnerable groups. To tackle that problem, the government might have to opt for subsidies, tiered models, or even direct benefit transfer.