LIC charges Rs 1,529 for a Rs 6 lakh cover for a 20-year-old, going up to Rs 6,273 for a 45-year-old.
Life Insurance companies have made losses of around 10% in the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) this year. Compared to the premium of around Rs 1,756 crore collected so far in FY18, insurance firms have received claims for Rs 1,931 crore. A total of 5.3 crore persons have insured themselves under the scheme that charges Rs 330 per year for a life cover of Rs 2 lakh. LIC charges Rs 1,529 for a Rs 6 lakh cover for a 20-year-old, going up to Rs 6,273 for a 45-year-old. Insurers are likely to ask the government for a rate revision from the current Rs 330 to Rs 350-400, say top industry officials.
Till March 19, a total of 96,550 claims were received and, of these, 87,412 were settled which amounts to Rs 1,748 crore — launched in 2015, the insurance scheme gives a one year term life cover of Rs 2 lakh for death due to any cause, including suicide and murder. In its first year, in FY17, compared to a premium of Rs 1,028 crore for the life policies, the claims were for Rs 1,249 crore, giving it a claims ratio of over 120%. These schemes, launched in May 2015, were projected as path-breaking steps to provide affordable, universal access to essential social security protection.
The premium amount has to be paid by May-end every year for renewal and the policies are linked to the beneficiary bank accounts. While several private players provide cover under PMJJBY, but state-owned general insurers like Life Insurance Corporation of India (LIC) has a market share of 65-70%. Even for the Pradhan Mantri Suraksha Bima Yojana (PMSBY), the prime minister’s accident insurance scheme, insurance companies have asked for a revision in premium rates. In this scheme, insurers have witnessed a claims ratio in the range of 180-200% and are planning to ask for doubling the premium from Rs 12 per annum to around Rs 20-30.