Siddhartha Mohanty
Keeping the message of “collective effort leading towards inclusive growth” in view, the government of India has been taking several initiatives to provide financial security to the general masses of the nation through various socially-oriented schemes.
The government, under the leadership of prime minister Narendra Modi, has been introducing several schemes and initiatives to bring social security and financial inclusion to the masses. The Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and the Pradhan Mantri Suraksha Bima Yojana (PMSBY), both launched on May 9, 2015, are shining examples of such initiatives aimed at providing affordable life insurance and accidental/disability insurance coverage to the masses at a nominal premium. These two schemes form important constituents of a bouquet of similar tools which brought about tectonic changes in the financial inclusivity paradigm of the country.
The opening of zero-balance bank accounts was a game changer. Not only did this allow Direct Bank Transfer (DBT) of funds under various schemes to millions of beneficiaries across the country, it also helped in the launching of government sponsored social-oriented insurance schemes that are crucial for financial security of those belonging to the weaker sections of society. With its embedded Aadhaar linkage, this system ensured automatic de-duplication and possible pilferages. The low and affordable amount of premium was the biggest attraction of these insurance scheme. PMJJBY provides individuals with a life insurance cover of Rs 2 lakh for an annual premium of only Rs 436. This scheme is available to citizens aged between 18-50 years. PMSBY provides individuals with accidental/disability insurance cover of Rs 2 lakh for an annual premium of only Rs 20. This scheme is available to citizens aged between 18-70 years.
Eligible persons can enroll by going to their nearest bank branch or any post office. The auto debit feature from the bank account (or any other account) ensures the renewal of life cover. This ensures that the scheme does not lapse due to negligence on the part of the holder. The PMJJBY is operational through Life Insurance Corporation of India (LIC) and as well as other insurance companies, with the necessary tie-ups with banks, seeing that banks are the primary agencies for enrollment. A subscriber can enroll for cover only from a single bank account.
The popularity of both these schemes can be gauged by the fact that PMJJBY has over 16.19 crore beneficiaries (LIC has enrolled 11.69 crore lives). The cumulative total number of claims paid under PMJJBY is 664,520 and total claim amount paid is Rs 13,290 crore (LIC has settled 172,297 claims for a total amount of Rs 3,445 crore). The top five states in cumulative enrollments are Uttar Pradesh, Maharashtra, Bihar, Madhya Pradesh, and Andhra Pradesh. Country percentage of the scheme coverage of the male population is 48%, while coverage for the female population stands at 51%. Scheme coverage within the rural areas is 72%, and is 28% in urban areas.
Talking about PMSBY, the scheme has over 34.17 crore beneficiaries till date. The cumulative number of claims paid under PMSBY is 115,951, with an amount of Rs 2,302.26 crore. The impact of these schemes, particularly in the rural parts of the country, has been immense. India continues to live in her villages, after all. The scheme also works as a normal hedge against all liabilities in case of an untimely demise of the beneficiary. The novelty of these schemes is that it is available for all individuals, including marginally skilled/unskilled as well as the rural/urban working population and labourers. This is how inclusive, socially-beneficial schemes should work. Employers can get their domestic help, drivers, gardeners, and sweepers enrolled as a benevolent act. They would be doing a lot of good for not only the families of such workers, but also to the society as a whole. Indeed, economic security is true empowerment and it is quite convincing that all people covered under the two schemes will feel secured.
LIC has been part of schemes such as PMJJBY that are reaching out to people who need financial support. It has also campaigned extensively to encourage people to enroll for these schemes. With concerted and coordinated efforts of various insurance companies, banks, state governments, the cherished dream of the prime minister to cover the eligible population of the country under this social security umbrella and make their lives free of financial stress can be fulfilled.
(The author is Chairman, Life Insurance Corporation of India. Views are personal.)