Centre’s low-premium insurance schemes are a hit with women

The first-ever low-premium life and accident cover schemes of the country have captivated women, especially from the rural areas.

With a staggering 40 per cent share in the policies issued in rural regions so far, they surpassed their urban counterparts who accounted for 36 per cent of urban policies.

Government data on the gross enrolments reported by banks up to February 22 show that total subscriptions to the Pradhan Mantri Jivan Jyoti Bima Yojana (PMJJBY) and Pradhan Mantri Suraksha Bima Yojana (PMSBY) stood at 12.50 crore.

Rural India leads with 52 per cent of the total enrolments, with the remaining 48 per cent coming from urban areas.

The schemes were launched by the Centre in May 2015. PMJJBY offers a renewable one-year life cover of ₹2 lakh to all savings bank account-holders in the age group of 18-50 years, covering death due to any reason, for a premium of ₹330 per annum and being administered by the Life Insurance Corporation of India.

PMSBY provides a renewable one-year accidental death-cum-disability cover of ₹2 lakh for partial/permanent disability for those in the age group of 18-70 years for a premium of ₹12 per annum through public sector general insurance policies.

Commenting on the factors driving such large enrolments, a top SBI executive told BusinessLine that besides low premium, simple know our customer (KYC) norms, flexibility in subscribing to the scheme (just by a text message), and auto debit of premium from bank savings account have attracted people to it. “It is not just the poor who subscribe. We see all categories of customers opting for the scheme,” he said.

State Bank of India tops the list with gross enrolments of 2.26 crore, followed by Punjab National Bank (89.87 lakh) and Andhra Bank (78.02 lakh). Public sector banks contributed 76 per cent of total subscriptions while regional rural banks and private banks accounted for 18 per cent and 6 per cent of the policies, respectively. Asked about the impact of the schemes on insurers, TS Vijayan, Chairman, Insurance Regulatory and Development Authority of India (IRDAI), said the total premium collected in the life and general insurance schemes was about ₹1,000 crore and ₹100 crore, respectively.

“The claims reported so far do not provide any material evidence which indicate burden on the insurance industry. The schemes also provide for revisiting certain provisions based on the claims experience,” he said.

“With increased number of subscriptions, the scope for such relook would be that much less,” Vijayan added.

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