India’s journey towards financial inclusion has been one of the most ambitious and significant public policy interventions of the 21st century. Along with opening of bank accounts, at the heart of this mission lies the democratisation of insurance and pension products. Through a suite of landmark schemes launched after 2014, millions of previously uninsured and pension-less citizens were brought into the fold of formal financial protection.
The policy architecture was simple: Leverage the PM Jan Dhan accounts, use auto-debit for premium collection, set premiums at low levels and provide meaningful benefits. For most of our post-independence history, the workforce in the unorganised sector were almost entirely outside the ambit of financial products especially insurance policies, and pension plans. They were vulnerable to income shocks, medical emergencies, accidental deaths and destitution in old age.
On May 9, 2015, the Prime Minister launched three transformative social security schemes, viz. the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), the Pradhan Mantri Suraksha Bima Yojana (PMSBY), and the Atal Pension Yojana (APY), collectively known as the ‘Jan Suraksha’ schemes. The guiding philosophy was ‘Securing the unsecured’ by extending the financial protection, which was hitherto deprived, to daily wage earners, domestic workers, farmers, street vendors, migrant workers etc. By linking these schemes to bank accounts, life and accident insurance as wells as the protection of pension were made accessible to the masses.
Three Pillars
PMJJBY is a term life insurance scheme, offering a life cover of Rs 2 lakh in the event of the insured person’s death due to any reason. It is available to people in the age group of 18 to 50 years who have a savings account in a Bank or Post Office. While the enrolment age ends at 50, the risk cover continues up to the age of 55, provided the premiums are paid regularly.
PMSBY is a specialised insurance scheme which provides coverage for death or disability resulting from any accident and is available to individuals aged between 18 to 70 years. The benefits are structured to provide `2 lakh for accidental death or full disability and `1 lakh for partial disability. As on April 8, PMJJBY has more than 273.8 million cumulative enrolments which includes 127 million women beneficiaries and 80.8 million PMJDY account holders. Claims totaling to `21,445 crore have been settled for 1.07 million beneficiaries with a claim settlement ratio of 99.95%.
Similarly, PMSBY has seen more than 580.1 million enrolments. Participation by 274 million women and 190.1 million PMJDY account holders demonstrate the scheme’s importance in gender inclusivity and affordability. It is also noteworthy that amount of Rs 3,653 crore have been paid for 184,000 claims and has a claim settlement ratio of 96.45%. The most striking feature of PMJJBY and PMSBY schemes are their simplicity and affordability with annual premiums of just Rs 436 per annum and Rs 20 per annum, respectively.
APY is a defined-benefit pension scheme targeted primarily at workers in India’s vast unorganised sector. Open to Indian citizens between 18 and 40 years of age (with a bank account and non-income-tax payee), it guarantees a fixed monthly pension upon reaching 60 years of age. A guarantee by the government ensures that any diminution in return on investments does not impact the assured pension, a key protection for low-income households from market-linked uncertainty.
Closing the Gap
RBI’s Financial Inclusion Index, which tracks the depth and reach of financial services across India, rose from 43.4 in 2017 to 67.0 in March 2025, which demonstrates that we have moved beyond account opening towards meaningful utilisation of financial products, with insurance and pension schemes playing a central role. Women in India have historically faced lower access to formal banking services till PMJDY scheme was introduced in August 2014.
Access to insurance and pension products were further remote. The Jan Suraksha schemes have made significant changes to this structural exclusion. In spite of such large progress made, there is considerable unfinished agenda to be achieved. Insurance penetration needs improvement from 3.7% when compared to global average of 6.5% to 7.3%. Less than 25% of India’s workforce have participation in any pension coverage scheme and bringing the gig workers within the ambit of social security net is also a work in progress.
Women, while increasingly being represented in enrollment numbers, often access the schemes at lower benefit tiers and face awareness barriers. Regional disparities are also to be addressed. Going forward more focused efforts towards outcomes are required; which means investing in financial literacy programs, streamlining processes through digital pathways, adapting products for new worker segments, evaluate the potential of indexing the benefits to inflation and leveraging India’s world-leading digital public infrastructure to reach the last mile.
Making insurance more affordable and accessible for individuals and strengthening financial inclusion aligns with the broader goal of “Viksit Bharat 2047” of a more secured and self-reliant India. The journey to achieve the vision of ‘Securing the unsecured’, has traversed well till now but not yet fully realised its intended outcomes. The foundations have been laid, the momentum is real and the aspiration of “Insurance for all” is worthy of the world’s largest democracy.
(The writer is secretary, Department of Financial Services, Government of India)
Disclaimer: The views expressed are the author’s own and do not reflect the official policy or position of Financial Express.