Centre may revamp flagship insurance schemes

Surabhi Mumbai | Updated on October 21, 2019

PMJJBY and PMSBY may see increased cover, higher premium charges

With the Centre’s flagship insurance schemes for life and accidental death and disability set to complete five years in 2020, the government is looking at increasing the risk cover and premium charges.

Sources close to the development said that Centre could hike the ₹2 lakh cover it provides under the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and Pradhan Mantri Suraksha Bima Yojana (PMSBY) from next financial year.

This could also be coupled with the long pending request for an increase in the premium amount by insurers.

“The schemes are doing exceptionally well. Over the last few years, beneficiaries are also becoming more aware about the benefits of insurance and some are realising that the ₹2 lakh cover is not sufficient,” noted a person aware of the development.

While there have been initial discussions on the issue in the government a formal proposal and decision are yet to be taken.

“Premium for this year is already paid. The decision will now have to be taken for 2020-21, which is still some time away,” noted the person. The cover period for subscribers is between June 1 and May 31 of the next year.

Another source pointed out that with the scheme set to complete five years, the government could possibly look at revamping it.

Premium hike

Coupled with it, insurers are also hopeful that their long pending demand for an increase in premium charges will also be finally agreed with.

“Costs have increased over the last four years but premium remains the same. We are optimistic that this issue will also be revisited,” noted an executive with an insurance company.

Launched on May 9, 2015, PMSBY gives a one year one year accidental death-cum-disability cover of ₹2 lakh to all subscribing bank account holders between the age of 18 and 70 years at a premium of ₹12 annually per subscriber.

PMJJBY, was also launched along with it offers a renewable one-year term life cover of ₹2 lakh to all subscribing bank account holders in the age group of 18 years and 50 years for death due to any reason, for a premium an annual premium of ₹330 per subscriber.

PMSBY has about 16.6 crore subscribers as on date and has received 45,615 claims of which 35,119 claims have been disbursed.

Similarly, PMJJBY has 6.32 crore subscribers. It has received 1.63 lakh claims and has disbursed 1.49 lakh of them as on October 11 this year.

Published on October 21, 2019

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