Need to broad-base PM Jeevan Jyoti Bima Yojana

Critical illness rider can be introduced to give a comprehensive financial protection to policyholders

The life cover under the scheme is Rs 2 lakh in case of death of the account holder.

The Prime Minister’s Jeevan Jyoti Bima Yojana is currently available to all eligible account holders of such banks which have a tie-up with life insurance companies, willing to offer the insurance coverage on terms as approved by the government. Customers of the bank in the age group of 18 to 50 years are eligible to obtain the life insurance cover. The life cover is for Rs 2 lakh for one year and is renewable by deduction of the premium amount from the SB account as per the standing mandate given by the life assured every year before May 31.

The life cover under the scheme is Rs 2 lakh in case of death of the account holder. The premium deductible under the scheme is Rs 436 per annum currently. Premium since inception of the scheme in 2016 was only Rs 330 per annum. The premium has been revised due to adverse claim experience in almost all the previous years and the need to rationalise the same to make it somewhat viable for the insurers.

Value addition to the scheme

Taking a cue from the success of the scheme in terms of acceptance and utility further improvement may be suggested to the policymakers to make the scheme more broad based and inclusive. As per a Ministry of Finance announcement in December 2021 the number of Jan Dhan Yojana bank accounts stood at 44.12 crore, 55% of which were held by women. Hence now the right time has arrived for value addition to the scheme

The PM Suraksha Bima Yojana (PMSBY) which is a parallel scheme to provide Rs 2 lakh insurance cover in case of death or certain disability by accident should be integrated to the PMJJBY so that in cases of death of the account holder by accident the dependents get additional financial support. Death by accident is a sudden episode destabilising the dependants in a big way, hence a wider umbrella of financial security is required for them to come to terms following the tragedy. The revised premium of Rs 20 under the PMSBY can be added to the yearly premium of Rs 436 for the PMJJBY. This facility will widen the security cover without any hassle or substantial growth in premium.

Critical Illness Rider

The success of the scheme so far encourages me to suggest that Critical Illness Rider be also introduced on a small scale to give the taste of a comprehensive financial protection. The present scheme being a term scheme only the life assured would himself never experience the promised benefits but a critical illness rider does give the policyholder financial support during his lifetime.

The insurers also must come forward with some mini critical health rider to introduce elements of visible benefits. All such inclusion will give more confidence to the insuring public in the wonderfully innovative scheme of the PM. Fintech must be exploited fully to keep costs low and to provide best service to make the concept a win-win arrangement for all.

The writer is former MD & CEO, Star Union Dai-ichi Life

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