Pradhan Mantri Jeevan Jyoti Bima Yojana

Pradhan Mantri Jeevan Jyoti Bima Yojana

Having a term insurance cover which pays the family a financial benefit in case of premature death of a family member is important. The plan covers risk of premature death and pays the family a lump sum benefit on death of the insured member. If the insured member is the sole bread-winner of the family, the benefit received from term plan becomes all the more important as it provides the bereaved family with the much needed financial security. However, though term plans are quite important, many individuals do not opt for this thinking it to be expensive. That is why to promote the concept of term insurance and to increase insurance penetration in India, the Government of India launched the Pradhan Mantri Jeevan Jyoti Bima Yojana. Let's understand what the scheme is all about.

What is Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)?

Pradhan Mantri Jeevan Jyoti Bima Yojana is a term insurance scheme which covers the risk of premature death during the term of the plan. The scheme runs for one year after which it can be renewed for continuous coverage.

Salient features of Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)

Here are the notable features of the scheme

• The scheme runs for one year. The coverage date starts from 1st June and ends on 31st May of the following year
• The premium for the scheme is payable through auto debit from the bank account of the insured member
• The insured member should give his approval for auto debit for deducting the premium from the bank account. Only if the approval is given would the premium be deducted and the member can enjoy coverage. The approval should be given before 1st June to enjoy coverage for a full year.
• Coverage for death starts after the first 45 days of plan commencement. This means that if the insured dies during the first 45 days of subscribing to the scheme, no claim would be payable. However, in case of accidental deaths, this waiting period of 45 days is not applicable.
• GST is not charged on the premiums paid for the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)

Coverage and premium details of the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) scheme

The scheme covers death within the coverage period of one year. In case of death, the sum assured is paid which is INR 2 lakh per insured member. A member can enjoy coverage only under one scheme applied from one bank account. Even if the member has multiple bank accounts, the insurance cover would be applicable from one account only.

The premium payable for the scheme is INR 330 per year per insured member. The premium is paid through debiting the savings account of the insured member. The premium is divided into various components which are as follows

• The insurance company gets INR 289 as the premium for providing the insurance coverage
• The agent or bank who helps the individual to subscribe to the scheme is given a reimbursement of expenses incurred in insuring the members under the scheme. The amount of reimbursement is INR 30 per year per insured member
• The bank is also given a reimbursement for its expenses incurred in administering the scheme. The amount of reimbursement is INR 11 per year per insured member.

Eligibility requirements for the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) scheme

To avail coverage under Pradhan Mantri Jeevan Jyoti Bima Yojana, individuals would have to fulfil the below-mentioned eligibility parameters

• They should be aged between 18 years and 50 years. Individuals over 50 years of age cannot avail coverage
• Coverage would be allowed annually till the insured reaches 55 years of age
• The individual should have a savings bank account
• The individual should give consent to the bank to auto debit his/her savings bank account for paying the premium for the scheme
• Individuals having a joint account can also be covered under the scheme

How to enrol into the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) scheme?

To enrol into the Pradhan Mantri Jeevan Jyoti Bima Yojana, interested individuals would have to request their banks with which they have a savings account. Coverage under the scheme is provided by LIC as well as by other life insurance companies. Banks enter into a tie-up with insurance companies for providing insurance coverage to their account holders under the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY).

Though the coverage starts from 1st June of every year, individuals joining late can also pay the premium and avail coverage. However, in such cases, cover would start from the date the premium is debited from the individual's account but premium for the whole year would have to be paid.

The process of enrolment is simple. The application form is available on the Government's website.

Application or enrollment forms under PMJJBY has been prescribed by the government in different languages for the ease of users.

Attach PDF forms

English Hindi Gujarati Kannada Marathi Odia Telugu Bangla Tamil

The form can be filled and submitted to the banker with whom the individual maintains his/her account and the enrolment would be done. The form is available in multiple languages and the individual can choose to fill the form in any language which he/she is comfortable in. Many banks also allow enrolment into the scheme through SMS or net banking facilities. To complete the enrolment process, the applicant should agree to the terms and conditions of the scheme and also give his/her consent for auto debit of the premium from his/her bank account. While filling up the application form, the applicant should furnish the following details accurately

• His/her Aadhar Card number
• His/her Savings Bank Account Number
• The permanent address of the applicant
• The address of the guardian of the applicant
• Mobile number and email id to get updates about the coverage

When would coverage under the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) scheme be terminated?

Coverage under the Pradhan Mantri Jeevan Jyoti Bima Yojana would be terminated in the following instances

• If the insured attains 55 years of age since coverage is not available beyond this age
• If the insured individual closes the bank account through which the scheme was subscribed to
• In case the insured individual's bank account has insufficient balance to pay the premium and the premium has not been auto debited by 1st June
• If the insured individual has applied through the scheme through multiple bank accounts. When it would be found that multiple applications have been done, the coverage under the scheme would be terminated.

How is the claim settled under the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)?

The claim settlement process under Pradhan Mantri Jeevan Jyoti Bima Yojana is simple. However, there are certain steps which should be taken by the nominee of the insured and the bank from which the scheme has been subscribed to. These steps are as follows

Steps which should be taken by the nominee of the insured

• Since the coverage pays only a death claim, the name of the nominee should be clearly mentioned by the insured individual. The nominee would then have to initiate the claim process once the insured dies during the term of coverage under the scheme.
• The nominee should approach the bank of the insured individual from which the insured had subscribed to the Pradhan Mantri Jeevan Jyoti Bima Yojana.
• The nominee should carry the death certificate of the insured for availing claim settlement
• The claim form and the discharge receipt should be collected from the bank's branch or from the branch of the insurance company or hospital or insurance agent, etc. The claim and the discharge forms are also available online.
• The forms should then be filled in completely and should be submitted to the bank along with the relevant documents. The documents which would be required for making a death claim would include

The death certificate of the insured,

Copy of the cancelled cheque of the nominee's bank account or

Copy of the cancelled cheque of the bank account of the insured member from which the scheme was subscribed to.

Claim or settlement forms under PMJJBY has been prescribed by the government in different languages

Attach Claim Forms

Steps which should be taken by the bank to settle a claim under the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)

Once the nominee has submitted the claim through the above-mentioned steps, the bank would have to take some steps for claim settlement.

• First and foremost, the bank would check whether the member, on whose death the claim has been made, had a valid insurance cover or not. A valid cover would said to be applicable if the premium for the cover had been paid prior to the death of the insured member and coverage for the year of death had been running when the insured died.
• Bank would then check the claim form and verify the details of the nominee
• In the claim form, the bank would fill the required columns
• The bank then submits the claim form and discharge receipt to the insurance company to the insurance company along with the death certificate and the copy of cancelled cheque
• The bank should forward the claim intimation to the insurance company within 30 days of receiving the claim form from the nominee

Steps which the insurance company would take for claim settlement under the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)

• Once the insurance company receives the claim intimation from the bank along with the required documents, it would start claim processing at its end.
• The first step in claim processing would be to check whether the claim form has been duly filled in or not and whether the required documents have been submitted to it. For any discrepancy the insurance company would raise a concern with the bank and the bank, in turn, would ask the nominee to furnish the missing details or the missing documents
• In case of a valid claim, the insurance company would check whether the member's coverage was active or not. If the coverage was active, the company would further ensure that the member has availed insurance coverage from one bank account only.
• If everything is in order, the insurance company would pay the claim. The claim amount would be paid directly to the bank account of the nominee whose details had been obtained through the cancelled cheque submitted by the nominee
• The insurance company would have a maximum of 30 days to disburse the claim amount for the date the company received claim intimation from the bank.
• If the nominee makes a direct claim to the insurance company, the company would, first, check the authenticity of the claim from the insured's bank. Only when the bank verifies the claim would the insurance company pay the claim amount.

Implementation of the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) scheme

Ever since it was launched on 9th May, 2015, the Pradhan Mantri Jeevan Jyoti Bima Yojana has been growing in leaps and bounds. Due to the low amount of premium and the ease of applying for the scheme, many individuals are subscribing to it. As of 14th May, 2018, about 5.35 crore individuals had already enrolled under the scheme. Moreover, till that date more than 1 lakh claims had already been received under the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY).

The road ahead

The Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) targets the poor and backward classes of the society and encourages them to avail coverage at very marginal premium rates. However, the scheme is not only exclusive to the poor people as everyone having a bank account can avail the coverage. The coverage is decent and the premiums are affordable helping individuals avail the benefits of insurance. The Government is also promoting the scheme among the entire population of India for their betterment. Thus, it is expected that the scheme would see substantial enrolments in the years to come.