Centre may more than double cover under flagship life, accident insurance to ₹5 lakh
In the run-up to high-stakes state assembly elections, the central government may more than double the amount covered under its flagship life and accident insurance scheme, according to two people aware of the development.
The government offers a life cover proposal ₹5 lakh, from the current limit ₹2 lakh, under the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), the people said on condition of anonymity. It is one of the largest life insurance programs run by the government with over 200 million subscribers.
The plan also involves increasing the cover ₹5 lakhs from present ₹2 lakh under Pradhan Mantri Suraksha Bima Yojana (PMSBY) in case of accidental death or disability. As of July 31, enrollment under the scheme stood at 453.6 million.
The push to increase coverage is part of the government’s “Insurance for All by 2047” initiative. While the number of insurers has grown from 53 to 70 in the last 10 years, India’s insurance penetration – or percentage of premiums to GDP – is still lower than the global average of 6.8% at 4%.
“Changes are being considered to address the issue of protection gaps in insurance cover High coverage will provide the required amount of an insured or dependent to meet financial obligations. Thinking is a ₹5 lakh cover under the schemes will help bridge this protection gap substantially,” said the first of the two people quoted above.
Emailed queries to the Ministry of Finance and the Secretary, Department of Financial Services were not answered till press time.
Discussion to increase coverage
Officials earlier mentioned that discussions have already started to increase the coverage under the two schemes. Individuals will have the option to either take higher cover on paying increased premiums or continue with the existing one ₹2 lakh cover—in premium ₹20 per annum per family member for PMSBY, and ₹436 per member per annum for PMJJBY.
The premium payable under the expanded schemes is yet to be worked out as the government will negotiate it with public and private insurers and distribution platforms such as banks and post offices. However, said the second person quoted earlier, efforts will be made to keep premiums low with higher coverage to bring more people under insurance.
“More inclusive policies will contribute to making insurance coverage more universal while addressing the growing and growing needs of the country,” said Rahul Singh, founder, Insarmonthly, a Bangalore-based health and wellness platform that delivers comprehensive government services. Supported insurance products.
“Wider inclusion and improved coverage under PMJJBY and PMSBY will make these schemes more attractive and will significantly help the backward and underprivileged sections of the society while helping to alleviate concerns about adequacy of coverage in times of need,” he said.
Central Insurance Scheme
PMJJBY, PMSBY and APY (Atal Pension Yojana) were launched by Prime Minister Narendra Modi on May 9, 2015. PMSBY is a one-year personal accident insurance scheme, renewable every year, that provides protection against death or disability due to accidents. Total amount payable in case of accidental death ₹2 lakhs, when payable in case of disability due to accident ₹1-2 lakhs. The scheme is available to persons aged between 18 and 70 years with a bank account and the premium of the scheme will be deducted from the savings account of the insured.
PMJJBY provides life cover on death of the insured. It is offered through Life Insurance Corporation of India Limited and other life insurers and banks willing to offer the scheme on similar terms. Indian residents between 18 to 50 years with a bank account are eligible for this
