The government’s new insurance schemes offer good cover for a nominal premium
The Prime Minister recently unveiled two insurance schemes — term life cover and accident cover — for savings bank account holders as part of the Jan Dhan’s Jan Suraksha scheme.
The Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) provides term life cover to all bank account holders. Individuals aged between 18 and 50 can sign up for this scheme. The sum assured of ₹2 lakh will be payable to the account holder in the event of death.
The benefit will be available up to the age of 55, provided the scheme is operational and the individual pays the annual premium without fail.
All you need to do is approach your bank branch and fill in the respective forms. The annual premium of ₹330 in the case of PM Jeevan Jyoti scheme will be debited directly from your bank account. If you hold accounts with multiple banks, you can avail of the scheme only through one bank account. The cover may be terminated in case you enrol into the scheme through multiple bank accounts.
The period of coverage will be June 2015-May 2016, even if you enrol yourself after June 2015. For instance, if you sign up for the scheme sometime in November 2015, you will have to pay the full annual premium of ₹330 and will be covered only until May 2016.
There is no waiting period for commencement of coverage. In case the balance in your savings bank account is inadequate to make the premium payment, the cover may be terminated.
The cover can be reinstated on payment of full premium, subject to conditions laid down by the insurance company. Likewise, the cover may be terminated in case you close your account with the bank, through which you’ve availed of the scheme. However, you can rejoin the scheme at a later time by opening an account with the same/other bank and submitting a self-declaration of good health.
The Pradhan Mantri Suraksha Bima Yojana (PMSBY) scheme provides accident cover to all savings bank account holders. Individuals aged between 18 and 70 are eligible for accident cover under PMSBY. Under this scheme, the account holder will be paid the full sum assured of ₹2 lakh in the event of accidental death or total disability.
Total disability is defined as complete loss of eyesight or loss of use of both hands or loss of use of both feet or loss of one eye along with loss of use of hand or foot. In the case of partial disability, involving loss of sight of one eye or loss of use of one foot or one hand, the account holder can claim ₹1 lakh.
And this comes at an annual premium of just ₹12! No compensation will be paid to the individual account holder in the event of natural death.
In both these schemes, a master policy will be issued by the insurance company with the bank as the policy holder and its savings account holders as beneficiaries. The claim in the event of death/disability will have to be lodged with the bank, which will be processed by the insurance company and the payment channelised through the individual’s bank account.
The account holder can nominate an individual, who can claim the benefit in the event of the former’s death. Account holders can choose to sign up for both these schemes, in which case the nominee can claim benefit of ₹4 lakh (₹2 lakh each under PMJJBY and PMSBY) in the event of accidental death.
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