Following the success of the social security schemes launched last year, a new health scheme has been introduced by the Centre. The Finance Minister outlined this as a scheme for the unorganised sector that will cover hospitalisation expenses for upto ₹1 lakh for a family for a year, with an additional ₹30,000 for a senior citizen. While more details of this scheme are expected in the next few weeks, here we take a look at the older schemes, and whether you should go for them.

The insurance schemes launched by the Centre last year are simple to understand and cheaper than similar products in the market. For less than ₹350, you can get insurance for ₹2 lakh for life and ₹2 lakh for accidental death/disability for a year. You can consider helping your domestic staff get these schemes and if you are underinsured, you too may also want to use it to enhance cover. The Atal Pension Yojana is also attractive given the guaranteed monthly pensions.

What they coverInsurance scheme: Pradhan Mantri Jeevan Jyoti Bima Yojana is a life insurance policy for a cover of ₹2 lakh for death. The policy has to be renewed every year by paying a premium of ₹330 (plus service tax). The scheme is open to all people in the age of 18 to 50 years. Premium revisions may happen, but at least not in the first three years and there is no requirement for medical tests. The Pradhan Mantri Suraksha Bima Yojana is an accident policy that covers accidental death and accidental disability.

The insurance available is ₹2 lakh for death or total loss of eyes, hands or feet and ₹1 lakh for loss of one eye or one hand/foot. The policy is available for people in the age of 18-70 years and the premium is ₹12 a year (plus service tax).

What makes these schemes attractive is that, unlike the ones in the market, these do not have exclusions and they are also very cheap. For a ₹2-lakh personal accident policy, for which Pradhan Mantri Suraksha Bima Yojana charges ₹12 for year, insurance companies will charge about ₹150-200 a year.

Further, those in hazardous professions, such as mining, river rafting or, say, working as aircraft pilots, jockey or circus performers do not easily get a personal accident cover. So, Pradhan Mantri Suraksha Bima Yojana is a good option.

In life insurance, it is difficult to draw a comparison between Pradhan Mantri Jeevan Jyoti Bima Yojana and pure term covers in the market, the reason being that no insurer offers life insurance cover for as low as ₹2 lakh, because the premium will be low, and insurers do not consider it worthwhile. But otherwise, life covers offered by public and private life insurance players have a few advantages. One, they cover the insured till 80 years and even beyond. In Pradhan Mantri Jeevan Jyoti Bima Yojana, the cover stops at 55 years. Also, public and private insurers give the option to increase the cover amount any time based on change in requirements and income of the individual. But, in the Centre’s scheme, the cover is a maximum of ₹2 lakh, and there is no option to increase it.

If you are in your active work life and have a dependent family, you should take a comprehensive life cover (see graphic accompanying story which illustrates this). The thumb rule is that life insurance cover should be 10-15 times one’s income. So, if you can afford it, you must take a pure life cover from a public/private insurer to ensure that you are adequately covered.

Pension scheme: The Atal Pension Yojana was also launched last year and it provides a monthly pension to subscribers from the age of 60. Anyone in the 18-40 age bracket can apply for it. The monthly contribution, starts from ₹42 a month for an 18-year-old seeking a pension of ₹1,000 a month, to a maximum of ₹1,454 a month for a 40-year-old seeking ₹5,000 as monthly pension.

The pension payout starts at 60 years. Based on the working put out by the Ministry of Finance, the return on this pension scheme comes to 8 per cent. But given that the maximum pension one can draw is limited to ₹5,000 a month, it can only be a supplement to your other pension tools.

How to sign up If you want to buy the PMJJBY or PMSBY, you need to approach your bank where you have your savings account. Even India Post facilitate enrolment now.

The premium will be auto-debited from your account. With some banks, you can even apply online for these schemes.

Both the policies run from June 1 to May 31. So, if you enrol now, you will be covered only for three months. If you intend to gift these schemes, you need to just provide the details of the person and you can pay for the policy from your account.

Enrolment into the Atal Pension Yojana can also be done through banks or the post office.

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