The second wave of the coronavirus pandemic across India has left people gasping for breath and running around to save their near and dear ones with no clear-cut relief in sight. Amid the increase in the number of deaths, experts have advised people to go in for the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), a one-year life insurance scheme renewable each year.
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The PMJJBY scheme is available to people in the age group of 18 to 50 years who have a bank account and who give their consent to join/enable the auto debit facility. The Aadhar would be the primary KYC for the bank account. The annual premium is ₹330 per annum, which is to be auto-debited in one instalment from the subscriber’s bank account as per the option given by him/her on or before May 31, of each annual coverage period under the scheme. Risk coverage under this scheme is for ₹2 lakh in case of death of the insured, due to any reason and benefit will accrue to the nominee, according to the information on the Centre’s Department of Financial Services website.
The scheme is being offered by the Life Insurance Corporation and all other life insurers who are willing to offer the product on similar terms with necessary approvals and tie-ups with banks for this purpose.
The risk cover is applicable after the first 45 days (lien clause) of enrolment. However, deaths due to accidents will be exempt from the lien clause and will be paid for.
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“This is a very useful life insurance scheme in the current circumstances. There is surely a lack of awareness about the product. Regulators like Reserve Bank of India and Insurance Regulatory and Development Authority of India should come together and ensure that such products are given more preference,” Suresh Parthasarathy, financial planner, founder myassetsallocation.com , said. “There is a challenge for the banks, when they push this product, some would allege mis-selling. The State governments can push the product through a campaign along with banks and also by roping in celebrities to create awareness about the product,” he said.
Consumer activist T. Sadagopan echoed similar views, but said banks need to do more in creating awareness about the product especially in current times. He said banks need to send reminders about payment of renewal premiums and can set up exclusive helpdesks for claims processing. The proof required for claims settlement under the scheme are death certificate and bank statements with the premium debit proof, and a duly-filled claim form.
“While opening my account the bank duly deducted the first premium. After that they did not deduct the renewal premium, because of which my family will miss out on the benefits from the scheme. The onus is on both banks to send reminders about the premium and the Centre to create awareness on this scheme especially now,” V. N. Mani, Administrative Officer, Jaya Group of Institutions said.
According to the Centre's health bulletin, there were 2,91,331 deaths in India due to COVID-19 as of May 21, till 8 a.m.
So far the PMJJBY scheme, which was launched in 2015, has seen gross enrolments of 10.32 crore and received claims of 2,56,523 out of which 2,39,605 have been disbursed.
Mr. Parthasarathy, pointed out that for a domestic help earning ₹3,000-5000 a month, having an insurance cover of ₹2 lakh would be hugely beneficial.
“Charity can begin at home, and those who employ domestic helps and drivers, can come forward to pay the premium under the scheme, like their employers providing insurance to them, which would help increase penetration of the scheme,” he said.