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The central government may more than double the amount covered under its flagship life and accident insurance schemes ahead of the upcoming state assembly elections, according to two people aware of the developments.
Government’s proposal to provide life insurance The present limit has been increased to Rs 5 lakh from Rs 5 lakh. People on the condition of anonymity said that insurance cover of up to Rs 2 lakh is being given under the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY). This is one of the largest life insurance schemes of the government, with more than 200 million subscribers.
This plan also includes enhancing the cover The current value has been increased from Rs.5 lakh to Rs.5 lakh The Pradhan Mantri Suraksha Bima Yojana (PMSBY) provides a compensation of Rs 2 lakh in case of death or disability due to accident. As of July 31, enrolment under the scheme stood at 453.6 million.
The effort to increase coverage is part of the government’s “Insurance for All by 2047” initiative. The number of insurance companies has grown from 53 to 70 in the past 10 years, but India’s insurance penetration – or the percentage of premiums to GDP – is 4%, still lower than the global average of 6.8%.
“These changes are being considered with the aim to address the issue of protection gap in insurance cover. Higher coverage will enable the insured or dependent to get the required amount to meet financial obligations. The thinking is that “The cover of up to Rs 5 lakh under the schemes will help bridge this protection gap to a large extent,” said the first of the two persons quoted above.
Emailed queries to the Finance Ministry and Secretary, Department of Financial Services remained unanswered till the time of filing the report.
Discussion continues on increasing coverage
Officials quoted earlier said discussions have begun to increase coverage under both schemes. Individuals will have the option to either opt for a higher cover by paying an increased premium or continue with the existing plan. 2 Lakh cover – on premium Rs 20 per year to each family member for PMSBY, and Rs 436 per year per member for PMJJBY.
The premium payable under the expanded plans is yet to be worked out as the government will discuss it with public and private insurance companies and distribution platforms such as banks and post offices. But, the second person quoted earlier said, efforts will be made to keep the premium low even with higher coverage so that more people can be brought under insurance.
“More inclusive policies will contribute to making insurance coverage more ubiquitous, while also helping to meet the growing and evolving needs of the nation,” said Rahul Singh, founder of Bengaluru-based health and wellness platform InsurMonthly, a platform that provides a wide distribution and service of government-backed insurance products.
He said, “Wider inclusion and improved coverage under PMJJBY and PMSBY will make these schemes more attractive and significantly help the underprivileged and deprived sections of the society, while also helping alleviate concerns about adequacy of coverage at the time of need.”
insurance schemes of the centre
PMJJBY, PMSBY and APY (Atal Pension Yojana) were launched by Prime Minister Narendra Modi on May 9, 2015. PMSBY is a one-year personal accident insurance scheme, renewable every year, that provides protection against death or disability due to accident. The total amount payable in case of accidental death is Up to Rs 2 lakh is paid, whereas in case of disability due to accident, the range of payment ranges from Rs 2 lakh to Rs 2 lakh. Insurance cover up to Rs 1-2 lakh. This plan is available to individuals aged between 18 and 70 years who have a bank account and the premium for this plan will be deducted from the savings account of the insured.
PMJJBY provides life insurance on the death of the insured. It is provided through the Life Insurance Corporation of India Limited and other life insurance companies and banks that are willing to offer the scheme on similar terms. Indian residents between the ages of 18 and 50 who have a bank account are eligible for it.
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