Pradhan Mantri Jeevan Jyoti Bima Yojana: A new face to insurance

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Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) is an insurance scheme which offers life insurance cover for death due to any reason and it is renewable from year to year. This scheme is administered through LIC and other Life Insurance companies willing to offer the product on similar terms with necessary approvals and tie ups with Banks. The scope of this scheme includes all savings bank account holders within the age limit of 18 to 50 years in the participating banks are entitled to join in this scheme. If a person has more than one savings account in different banks the person would be eligible to join in this scheme through one savings account only. Aadhar is treated as the primary KYC for the bank account.

In this scheme, the government offers life insurance cover of Rs 2 lakhs for a premium of Rs 330 annually. When compare to other insurances, the entry level plan of this scheme s very cheap. The objective of this scheme was to increase insurance penetration in India. As PMJJBY are offered at low premium, the agents find it difficult to push their insurance product of higher value in smaller cities and towns. The major portion among the clients of this scheme was lower middle – class households. The corporate agencies of leading insurance companies were trying to make people aware about the limitations of this scheme by saying that the coverage under PMJJBY is only up to 50 years, which is below the life expectancy figures.

The positive part of this scheme was that the people were aware about the insurance and pension products as they moved up in their financial ladder. Along with this two more schemes were launched by Prime Minister Narendra Modi for comprehensive social security. They are for accidental death insurance, Pradhan Mantri Suraksha Bima Yojana, and the Atal Pension Yojana to provide old-age income. As per current status the total enrolment for all these three schemes is 10.4 crores.

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