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The Centre has granted service tax exemption on the services of life insurance business provided under the Aam Aadmi Bima Yojana (AABY) and Janashree Bima Yojana (JBY).
Launched in August 2007, the AABY covers death and disability insurance for the benefit of rural landless households.
AABY provides for insurance of the head of the family or earning member of the family of rural landless households between the age of 18 and 59 years against natural death or accidental death and partial/permanent disability.
The annual premium payable is Rs 200, of which 50 per cent shall be payable by the Union Government and the remaining 50 per cent by the State Government.
The Centre has created a fund that is being operated by LIC for meeting the liability of the Central Government towards premium payment.
AABY also provides for educational assistance to the beneficiaries’ children studying from 9{+t}{+h} to 12{+t}{+h} standard as an extended benefit. A separate fund has been created for providing scholarship to the children of beneficiaries.
On the other hand, JBY, which was launched in August 2000, provides life insurance protection to people who are below poverty line or marginally above poverty line.
Persons aged between 18 years and 59 years and who are members of the identified 45 occupational groups are eligible to be covered under the scheme.
The premium for the JBY is Rs 200 per member. While 50 per cent premium under the scheme is met out of Social Security Fund maintained by LIC, the balance 50 per cent premium is borne by the member and/or nodal agency.
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