“Dear customer, XXX bank offers Pradhan Mantri Suraksha Bima Yojana, an accidental cover of ₹ 2 lakh for annual premium amount of ₹ 12. To enroll, SMS PMSBY <nominee name> Y to XXX from your registered mobile number. The premium amount will be debited from your bank savings account."
Did you recently get this message from your bank? If not, then you may soon get it. In his budget speech, finance minister Arun Jaitley said the government will launch two insurance products— Pradhan Mantri Suraksha Bima Yojna (PMSBY) and Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY). The official rollout is set to happen on 9 May in Kolkata.
What is it?
PMSBY is an accidental death insurance cover. The sum assured is ₹ 2 lakh for which you will have to pay a premium of ₹ 12 plus service tax per year for the age group 18-70 years. Your nominee will get ₹ 2 lakh, in case of accidental death, you will get ₹ 2 lakh for total and irrecoverable loss of both eyes or loss of use of both hands or feet or loss of sight of one eye and loss of use of one hand or one foot.
You will get ₹ 1 lakh as claim amount in case of total and irrecoverable loss of sight of one eye or loss of use of one hand or one foot. The cover is subject to exclusions of the policy. PMJJBY will cover both natural and accidental death to up to ₹ 2 lakh. The premium will be ₹ 330 plus service tax per year for age group 18-50 years. As per ICICI Bank Ltd website, you have to pay service tax for both products. Service tax will be 14% of the premium amount. The sum assured is ₹ 2 lakh. On the death of the insured member for any reason, it is payable to the nominee. No claim is admissible for deaths during the first 45 days except for cases of death due to accident.
How does it work?
If you have a savings account with the participating bank you can buy any of these policies under Pradhan Mantri Bima Yojana. You have to give your consent to your bank to join or enable auto-debit to enroll into the scheme. You will be covered for one year starting from 1 June 2015 to 31 May 2016. You have to renew the policy every year. You will have to join this scheme through savings bank account by 31 May. You also get an extension up to 31 August to join the scheme.
The premium will be directly auto-debited by the bank from your account. This is the only mode available. For PMJJBY you will have to yourself certify of good health. In case you have more than one insurance policy under this scheme, the premium you have paid will be forfeited. Also no claims would be paid if you have multiple insurance under this scheme. The cover will start from the 1st of the month from to the date of enrolment in the scheme. The nominee will be the same as your savings account nominee.