Life insurance companies have pitched for a re-pricing of the government’s flagship Pradhan Mantri Jeevan Jyoti Beema Yojana.
According to calculations, the premium would have to be fixed at a little over ₹400 per annum per policy from the current ₹330.
Launched in 2015, the PMJJBY scheme provides a life cover of ₹2 lakh to people in the age group of 18 to 50 years (life cover up to age 55) having a savings bank account. The scheme is available for one year, stretching from June 1 to May 31 and is renewable every year.
The government had chosen to keep the premium rate low to enable more people to take life cover and get social security.
However, insurers point out that the premium for the life insurance cover was fixed a long time ago and needs to be reviewed. Further, there has also been a rise in claims under the scheme following the Covid-19 pandemic.
“It is very, very important that the premiums for the scheme increase. It has not been hiked even once since the scheme was launched. It is not sustainable at the moment,” said an official with a life insurance company.
“We are hoping that the premium is reviewed. A large number of people have joined the scheme, especially in the last two years. Claim ratio has also increased since the pandemic,” said another insurer.
On a cumulative basis, there were 10.34 crore persons enrolled under the scheme with a total of 2.6 lakh claims by May this year.
The government is also looking to bring more people under the scheme. The Finance Ministry had recently said it would try and bring the 43.04 crore eligible account holders of the Pradhan Mantri Jan Dhan Yojana announced under PMJJBY and Pradhan Mantri Suraksha Bima Yojana. Banks have already been communicated on the issue, it had said.