You never know when or how someone might face a problem in life. Therefore, it is essential to be prepared for any unexpected situation.
In today’s world, insurance has become a crucial necessity. Accidents often occur without warning, making it vital to have accidental policies in place.
However, individuals with limited financial means may struggle to afford insurance premiums. To address this issue, the Government of India introduced the Pradhan Mantri Suraksha Bima Yojana (PMSBY), a scheme designed to provide insurance protection for those in need.
Pradhan Mantri Suraksha Bima Yojana (PMSBY) is a vital social security scheme that provides affordable accident insurance.
This one-year policy, renewable annually, offers coverage for accidental death and disability, ensuring financial protection for policyholders and their families against unforeseen incidents.
Key Features of PMSBY
PMSBY is administered by Public Sector General Insurance Companies (PSGICs) and other authorized insurance firms in collaboration with participating banks.
This flexibility allows banks to partner with any approved insurance company to implement the scheme, making it accessible to many account holders.
Eligibility and Coverage: The scheme is open to all savings account holders aged 18 to 70 across participating banks.
Each individual can enroll through only one savings account, even if they hold multiple accounts in different banks. Aadhaar serves as the primary KYC document for enrollment.
Enrollment and Renewal: The insurance cover is valid from June 1 to May 31 each year. Enrollment requires an auto-debit mandate from the savings account, which should be completed by May 31 annually.
The enrollment period was initially extended to November 30, 2015, to accommodate late joiners. Subject to the scheme’s terms, subscribers can opt for continuous enrollment with an indefinite auto-debit option.
Benefits and Premium: The PMSBY scheme charges a nominal premium of Rs. 20 per annum, auto-debited from the subscriber’s savings account.
This premium is subject to periodic review based on the annual claims experience, although efforts will be made to maintain the rate for the first three years.
Termination of Coverage: The insurance coverage under PMSBY terminates upon reaching 70, closing the bank account, or having insufficient funds to cover the premium.
In cases where multiple accounts are inadvertently covered, the insurance will apply to only one, and excess premiums will be forfeited. Coverage lapses due to technical reasons can be reinstated by paying the total annual premium, but the decision to reinstate rests with the insurance company.
Administration and Claim Process: Participating banks are responsible for deducting the premium and remitting it to the insurance company.
The scheme is administered according to the insurer’s standard procedures, with a focus on a simple and user-friendly claim process.
The bank must retain enrollment forms and auto-debit authorizations, which may be requested during claims.
Premium Allocation: The premium distribution includes Rs. 16 per member for the insurance company, Rs. 2 for reimbursement to agents or banks, and Rs. 2 for administrative expenses.
| Name of the Scheme | Pradhan Mantri Suraksha Bima Scheme |
|---|---|
| Website | https://www.india.gov.in/ |
| Schemes Portal | https://eshram.gov.in/ |
Scheme Highlights (Rs. 2 lakh accident insurance for just Rs. 20)
- Eligibility: Individuals aged 18 to 70 with a bank account are eligible.
- Premium: Rs. 20 per annum, auto-debited from the bank account.
- Risk Coverage: Rs. 2 lakh for accidental death and total disability, Rs. 1 lakh for partial disability.
- Enrollment: Requires an Aadhaar-linked bank account and submission of a form before June 1 each year.
Government Contribution
Various government ministries may contribute to the premium for specific beneficiary categories from their budgets or a Public Welfare Fund. The government bears the scheme’s publicity expenses, ensuring widespread awareness and accessibility.