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Business News/ Money / Personal Finance/  PMJJBY completes 8 years: Here are key features, eligibility and more
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PMJJBY completes 8 years: Here are key features, eligibility and more

Government of India launched Pradhan Mantri Jeevan Jyoti Bima Yojna on 9th May, 2015. The scheme aims to provide life insurance coverage to individuals at an affordable premium, especially those from low-income and economically vulnerable sections of society.

PMJJBY contributes to safeguarding families' economic well-being and easing their financial burden in times of distress.Premium
PMJJBY contributes to safeguarding families' economic well-being and easing their financial burden in times of distress.

Government of India launched Pradhan Mantri Jeevan Jyoti Bima Yojna (PMJJBY) on 9th May, 2015. The policy was originally mentioned in February 2015 by Arun Jaitley in his budget speech. But, it was launched by the PM on 9th May 2015. The scheme aims to provide life insurance coverage to individuals at an affordable premium, especially those from low-income and economically vulnerable sections of society.

Key features and eligibility

Age eligibility: The scheme is available to all Indian citizens between the age group of 18 to 50 and the maximum coverage period is till 55 years of age. The policyholder needs to have a bank account to enrol in the scheme. This policy is a government backed life insurance scheme in India which is a pure term insurance scheme and very affordable too.

Affordable premiums: One of the significant advantages of PMJJBY is its affordability. The annual premium for the policy is nominal, making it accessible to a wide range of people, including those from economically disadvantaged backgrounds.

It offers a maximum sum assured of ₹2 lakh and as compared to other term insurance policies where the premium rate is high, PMJJBY policy offers premium at ₹436 per annum. In case of death of the policyholder before the coverage period, ₹2 lakh will be provided to the nominee.

Uniform coverage: Regardless of the premium paid, the coverage amount remains the same for all policyholders. In case of the unfortunate death of the policyholder during the policy year, a lump sum amount is paid to the nominee, which is generally the family member of the policyholder.

Easy enrollment: The scheme is designed to be simple and easy to enrol. Individuals can enrol by filling out a simple application form and providing the necessary documents. The enrollment process has been made hassle-free to encourage broader participation.

Renewability: Policyholders have the option to renew the policy annually, ensuring continuous coverage as long as they are within the eligible age range and continue paying the premium.

Auto-debit facility: Premiums are automatically debited from the policyholder's bank account, simplifying the payment process and minimising lapses in coverage due to missed payments. The amount will be auto-debited from their savings bank account.

Tax benefits: One can buy a policy from their bank account where Aadhar will be considered as the primary source for KYC in their bank account. Also, the premium paid is considered as tax deduction under Section 80C of Income Tax.

Claim process: In the event of the policyholder's death, the nominee or legal heir needs to submit a claim to the bank where the policyholder had the savings account. The bank assists in processing the claim and disbursing the insurance amount.

Achievements: As of 26th April 2023, 16.19 crore people have already enrolled for this scheme. 6,64,520 claims have been disbursed (given to policyholders) amounting to a total of ₹13,290.40 crore. This policy is suitable for people who don’t have enough money to buy the term insurance.

Benefits and payouts

Pradhan Mantri Jeevan Jyoti Bima Yojna offers a death benefit to the nominee in case of the insured's demise during the policy year. The sum assured, which is the coverage amount, is currently set at ₹2 lakhs. This payout can help the family of the insured cope with financial challenges during a difficult time, such as covering funeral expenses, repaying debts, and maintaining their standard of living.

Successes and challenges

Pradhan Mantri Jeevan Jyoti Bima Yojna has witnessed significant success in terms of enrollment numbers, with millions of people across the country availing the benefits of the scheme. It has helped bridge the insurance gap in India by bringing insurance coverage to segments of the population that were previously underserved. The simplicity of the scheme, along with its affordability, has contributed to its popularity.

However, challenges remain, such as increasing awareness about the scheme in rural and remote areas, ensuring accurate nomination details, and addressing issues related to timely premium payments.

Conclusion

Pradhan Mantri Jeevan Jyoti Bima Yojana is a noteworthy step towards enhancing financial security and promoting financial inclusion in India. By providing accessible life insurance coverage to a vast section of the population, PMJJBY contributes to safeguarding families' economic well-being and easing their financial burden in times of distress. 

Through continuous efforts to raise awareness, streamline processes, and address challenges, the scheme can continue to fulfil its objective of ensuring "Jeevan Jyoti" or the light of life for every Indian.

Rohit Gyanchandani is Managing Director at Nandi Nivesh Private Limited

 

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Published: 04 Sep 2023, 08:45 AM IST
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