As per study only 30% population have life insurance in India. Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) is one of the most ambitious life insurance scheme backed by Central Government to increase the coverage level. PMJJBY intend to given life insurance cover to all citizens of the country, especially rural India. PMJJBY is affordable, easy to subscribe and a must have for all. In this post we will explain PMJJBY making it easy for you to understand and subscribe.
Background of PMJJBY
PMJJBY was launched on May 9, 2015 by the Prime Minister of India. It is part of Jan Suraksha schemes of the Government. The life insurance coverage being very low in India, it leaves wide gap in income, in case of unfortunate demise of bread earner. It is more vulnerable in rural India where life insurance penetration is just 8-10%. In USA population covered under life insurance is around 52%. Therefore India has a long way to go. PMJJBY is an effort in that direction.
PMJJBY is administered by Department of Financial Services, Ministry of Finance, Government of India. The scheme is being operated by Life Insurance Corporation of India and all other life insurers who are willing to offer the product on similar terms. The participating bank and insurance companies’ branches are the nodal contact point to subscribe the policy.
Features of PMJJBY
The major features of the scheme are
- It is a group life insurance policy.
- The life coverage is for one year from 1st June of the current year to 31st May of the next year) and can be renewed annually (up to the age of 55 years).
- The renewal is carried out by auto-debit from the linked account subject to availability of fund.
- You can discontinue the subscription by stopping debit from the account. The same can also be restarted by paying premium and submitting medical fitness certificate.
- It covers for death due to any reason. However, suicide and breach of law with or without criminal intent are excluded. E.g. Accidental death while jumping traffic signal, death while entering a prohibited area etc.
- All savings bank account holders in the age 18 to 50 years are entitled to subscribe the insurance cover.
- The value of insurance cover is ₹ 2 lakh subject to payment of premium and receipt by the Insurance Company.
- The current premium is ₹ 436/- per annum per member. It is deducted from the account holder’s savings bank account through ‘auto debit’ facility in one instalment, as per the option given, on or before 31stMay of each annual coverage period under the scheme subject to availability of the fund in the Bank’s account.
- The premium will be collected proportionately if subscription is closer to 31st May of the year. A tabular example is as given below.
| Enrolment during June, July & August | Enrolment during September, October & November | Enrolment during December, January & February | Enrolment during March, April & May | |
| Total premium collected | ₹436/- | ₹342/- | ₹228/- | ₹114/- |
10. On death due to any reason of the subscriber, registered nominee will be eligible to get ₹ 2 lakh in his/her saving account.
How to apply for PMJJBY
Anyone willing to enrol for PMJJBY may do so by visiting his/her bank branch. Alternatively, it can be done by visiting branch of insurance company offering PMJJBY.
A form has to be filled up with personal and bank account details. Aadhar will be the main document for KYC verification.
The same process can be completed online by visiting bank or insurance company’s website. However, the subscriber need to have login credential to complete the enrolment. Make sure there is adequate account balance at the time of enrolment.
Process for insurance claim
Generally, a 30 Days lien clause is applied from the date of enrolment during which period no claim is paid. However deaths due to accident would be exempted from the lien clause.
If any claim arise on unfortunate demise of the PMJJBY policy holder, the nominee has to apply for claim. It can be done by filling up the required form at concern bank branch or online. Additionally, the nominee need to submit the death certificate, bank account details, cancel cheque etc.
The bank official will verify the documents and give go-ahead to the insurance company. The insurer also verify the submitted document for its genuineness before releasing the fund’s to nominee’s account.
Applicable terms and conditions
- One eligible person can subscribe to only one policy. He or she cannot subscribe to multiple polices linking different accounts. If multiple policies are subscribed by the same person, claim will be settled in respect of only one policy. The premium collected for the balance polices will be refunded.
- The customer will have to pay the premium as per the scheme requirement.
- The policy shall not be issued if a mobile number is not updated in Savings Bank Account. The bank shall provide no separate intimation for the same.
- The customer response received through their registered mobile number shall be considered as their consent for auto-debit from their Savings Bank Account.
- Any information provided by the customer, if found to be untrue, the membership to the scheme shall be treated as cancelled from the date of joining the scheme, and all premiums paid in respect thereof, shall stand forfeited.
FAQs on PMJJBY
Q1. What is the nature of the scheme?
It is a Term Life Insurance, renewable from year to year, offering life insurance cover for death due to any reason other than suicide and breach of law.
Q2. What would be the benefits under the scheme and premium payable?
The death benefit is ₹2 lakhs. The annual premium payable is ₹436/- per annum per subscriber.
Q3. How will the premium be paid?
The premium will be deducted from the subscribers savings bank account through ‘auto debit’ option in one instalment.
Q4. Who will offer / administer the scheme?
The scheme is offered / administered by LIC and other Life Insurance companies willing to offer the product with necessary approvals on similar terms. The participating Banks will be distributing agent. Banks are to engage any such life insurance company for implementing the scheme for their subscribers.
Q5. Who will be eligible to subscribe?
All savings bank account holders in the age 18 to 50 years in participating banks will be entitled to join. In case of multiple saving bank accounts, only one account will be linked to PMJJBY.
Q6. Can eligible individuals who fail to join the scheme in the initial year join in subsequent years?
Yes, on payment of premium through auto-debit and submission of a self-certificate of good health. New eligible entrants in future years can also join accordingly.
Q7. Can individuals who leave the scheme rejoin?
Individuals who exit the scheme at any point may re-join the scheme in future years by paying the annual premium and submitting a self declaration of good health.
Q8. Who would be the Master policy holder for the scheme?
The participating Banks will be the Master policy holders issued by the insurance company. The Bank along with the insurance company will device a simple claim settlement process under PMJJBY.
Q9. When can the assurance on life of the member terminate?
The assurance on the life or insurance cover comes to an end when the subscriber attain age 55 years and renewal premium is not paid.
Q11. What will be the role of the insurance company and the Bank?
i) The scheme will be administered by LIC or any other Life Insurance company which is willing to offer such a product in partnership with a bank / banks.
ii) It will be the responsibility of the participating bank 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, as required, shall be obtained and retained by the participating bank. In case of claim, LIC / insurance company may seek submission of the same. LIC / Insurance Company also reserve the right to call for these documents at any point of time.
Q12 How would the premium be appropriated?
Insurance Premium to LIC /other insurance company: Rs.380/- per annum per member; b. Reimbursement of Expenses to BC/Micro/Corporate/Agent : Rs.40/- per annum per member; c. Reimbursement of Administrative expenses to participating Bank: Rs.16/- per annum per member.