PMJJBY – Pradhan Mantri Jeeven Jyoti Bima Yojana

Pradhan Mantri Jeeven Jyoti Bima Yojana: A great number of India’s population is still living under poverty and without any security for future. Be it the security of getting pension during old age or any kind of cover for accidents, life or health, a major fraction of the population of the country is living without it even today.  So to cover the uncovered section of the society with an insurance policy, the government of India has initiated three different social security schemes back in 2015-16.

Two of these schemes are dedicated towards insuring Indian citizens with life and accident cover, while the third one is to cover the workers of the unorganized sector with a pension policy. The accident insurance schemes aim at covering each and every Indian citizen so that no one has to suffer and worry about illness or any kind of accidents. Also the old and aged workers could also live well with their pension after retiring from work at 60 years.

The schemes were introduced by India’s Finance Minister Arun Jaitley on March 1, 2015 during his budget speech, while the schemes were launched by the Prime minister of India on 9 May 2015.

One such scheme is the Pradhan Mantri Jeevan Jyoti Bima Yojana. This is a life insurance scheme with one year cover term, which aims at offering insurance cover for death caused due to any reason.  A premium of Rs.330/- per annum is what the insurer needs to pay to get covered with Rs.2lakhs. Thus the death of the subscriber caused by any reason would get the nomine a sum of Rs. 2 lakh.

Any individual within the age group of 18 to 50 years can subscribe for the Jeevan Jyoti Bima Yojana if he/she holds a savings bank account. The premium for this scheme gets deducted from the bank account of the subscriber by means of ‘auto debit’ at one instalment. Interested people can give one-time mandate for this auto-debit for every year till they want this policy to stay in force.

The Jeevan Jyoti Bima Yojana is available for the cover period from 1st June, 2015 to 31st May, 2016 initially. However anyone who fails to subscribe for the scheme in the first year can join later in the succeeding years.

Insurance companies like LIC and others will offer and administer the scheme in association with associated banks.  Multiple bank account holders are eligible to join the scheme via one particular savings bank account only.

Advantages of PM Jeevan Jyoti Bima Yojana

Most of the Indians are living without a proper insurance cover and that is true mostly in villages and far flung remote areas.  They are not covered for their life, health or accidental mishaps.  Thus, a larger population of India is living under financial threat and until everyone is financially secure in a country, the nation cannot grow inside out.

The success of Pradhan Mantri Jan Dhan Yojana is known to all.  In the same continuation, PM Jeevan Jyoti Bima Yojana comes with several benefits including the main being death cover due to any reason.  Following are the core advantages of PM Jeevan Jyoti Bima Yojana:

  • PM Jeevan Jyoti Bima Yojana is meant for anyone within the age group of 18 years to 50 years and should have a bank account under the Pradhan Mantri Jan Dhan Yojana.
  • The annual premium for PM Jeevan Jyoti Bima Yojana is just Rs 330 per annum. The amount would be auto debited from the subscriber’s account every year
  • The risk cover of life with this scheme is Rs 2 lakh in case of death of the subscriber
  • The insurance scheme has to be renewed every year by the subscriber. On the other hand, the subscriber can subscribe for a longer period in which they can select a longer period of auto-debit.

Every scheme launched by government has its own advantages and similarly PM Jeevan Jyoti Bima Yojana offers a number of benefits/advantages, some of which are listed below:

Insurance cover for Uninsured

There are crores of people in India who are not covered under any insurance scheme, private or through social security.  This lot is primarily the rural poor population or the urban poor who are living in unorganized colonies.

For example, people living in slums hardly know about insurance welfare schemes and they just earn their daily bread and butter but never think about covering their life.  With this scheme, the premium and process of subscription is so simple that every poor person can join this scheme with no extra effort.

Small Premium Amount

Quite often poor are not able to open an insurance subscription due to the premium money being too high in other life insurance company schemes.  However with PM Jeevan Jyoti Bima Yojana, the premium amount is so low that this amount is earned by any laborer in the country in just one day.  But with this small premium the person is insured for 2 lakh rupee, which is a huge security amount.

Single time premium payment

Had it been a monthly or quarterly payment mode for the premiums, the scheme would have been a little difficult to be continued by many.  But since the premium would be paid just once throughout the year, the scheme would practically be feasible for the subscriber and chances of fallout from the scheme are minimal.

Auto Debit Facility

Auto debit facility is the best advantage of the scheme.  If you have to deposit money in your insurance subscription, you may either procrastinate or forget it altogether.  But if you have just rupee 500 in your account throughout the year, the premium money would be automatically debited from the account and you would be covered under the insurance thereby getting a big benefit.

Linked to PM Jan Dhan Yojana

The scheme is a continuation to the esteemed scheme launched by the Indian Government, i.e. Pradhan Mantri Jan Dhan Yojana.  This way, whosoever is going to subscribe for Pradhan Mantri Jeevan Jyoti Bima Yojana and already having a PM Jan Dhan Yojana account would not have to furnish much KYC documents.  This is a convenience for subscribers.

Overall, the scheme is a good welfare scheme and would serve the poor population of Indian in long run.  It is only the execution of the scheme through banks and insurance companies that would decide the success of the scheme.

Drawbacks of PM Jeevan Jyoti Bima Yojana

Pradhan Mantri Jeevan Jyoti Bima Yojana is one of the social alleviation schemes launched by the Central Government of India.  Under this scheme, Life Insurance would be provided to those sections of society who are not yet covered under any insurance scheme due to poor coverage of insurance network.

While the scheme has many of its own advantages, there are certain drawbacks of the scheme too.  And that is completely understandable considering the initial phase it is into.  We hope that with time, the central governments would make necessary amendments to the scheme so that the purpose of the scheme becomes more successful and relevant.

In this article, we would however not focus on the features of the scheme, but would ponder on certain drawbacks that this scheme comes along.

Every year renewal

If you buy an insurance and you have to renew it every year that may be a problem with many people.  With PM Jeevan Jyoti Bima Yojana, such is the condition that the subscriber would have to renew their policy every year and hence, a lot of subscribers may miss on renewal.  This is one of the disadvantages of PM Jeevan Jyoti Bima Yojana.

Low amount of insurance cover

With rising inflation, value of money is decreasing every year.  Two lakh is not really a remarkable amount even for poor living in rural areas.  If two lakh does not hold much value as of now, imagine its value after 20-25 years.  The government would have to increase the value of insurance cover if it has to make this a popular welfare scheme in long run.

Scheme not fit for everyone

Keeping in consideration the low amount of insurance cover and the scheme’s attachment to Jan Dhan Yojana, the scheme is not applicable to entire population.  Only those who are living below poverty line may get enrolled under the scheme, more so due to the low insurance cover amount.  Thus, this scheme is not relevant for bigger population.

Scheme linked to only Jan Dhan Yojana

In continuation to the above point, linking the scheme to Jan Dhan Yojana would mean that the scheme narrows down its domain of coverage.  Only those people who are enrolled under Pradhan Mantri Jan Dhan Yojana would be able to subscribe to PM Jeevan Jyoti Bima Yojana.

ECS Mode of Payment

Since this is a scheme linked to Jan Dhan Yojana, the payment of premium is linked to the Jan Dhan Account through ECS mode.  No other mode of payment of premium narrows down the channel through which subscriber can deposit premium amount.  If at any point, there is any problem with the saving account, the subscriber may not be able to pay their premium on time.

Overall, the scheme has more advantages that disadvantages and serve special purpose of providing insurance cover to those people who are not yet covered under any insurance scheme and thus we expect that this scheme would go a longer way in providing financial security to the needy section of society in times of their distress.  Still, we need to wait and watch how this scheme reaches the needy and how the scheme is executed by the insurance agencies.

Age limits in Jeevan Jyoti Bima Yojana

PM Narendra Modi is very helpful towards those sectors that are not getting the primary banking services and he tries to provide those services at the lowest possible rates. Hence, the Jeevan Jyoti Bima Yojana started and helping the people so that they can get the basic banking facilities.

The Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) offers a life insurance that is completely renewable and it is up to Rs. 2 lakhs. One can avail this policy at just Rs. 330 per annum. The age group that can apply for the PMJJBY is in between 18 to 50 years. The eligibility criterion is, the applicant must have a savings bank account any of the authorized bank forms where the scheme is applicable.

The installment is only once a year and the insurance will cover death due to any possible reason. The whole process will be handled by the LIC and it will look after all the welfare and rules. There are several other insurance companies that will co-ordinate along with the LIC so that a better accuracy towards work can be gained.

The age limit is 18 to 50 years. If someone is having more than one bank account, he can join a single scheme that is applicable to any one of the savings accounts.

Enrollment period

The coverage period is from 1st June 2015 to 31st May 2016. Therefore, those who are interested in subscribing this policy, they can contact their respective banks. The government may extend the period and it will be effective from 31st August 2015. Further reports also suggest that the date may increase and it will be effective from 30th November. But, those who are applying for the scheme before May 31st, they will have to make the full payment by the end of the next month so that they can avail the cover and it will start from the said period.

The amount deducted from the savings bank account and it will be done in an auto-deducted process. The amount will be automatically transferred from the savings bank account and the premium will be paid. As the scheme is launching in the year of 2015, hence an extension would be provided so that those who are unaware of the fact, they can also avail this scheme even after the due date is crossed. Those who are joining after the due date, they must have to pay the entire premium of the year, so that they can get the coverage of the year.

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