Latest Insurance and Pension Schemes

“Dear customer, XXX bank offers Pradhan Mantri Suraksha Bima Yojana, an accidental cover of Rs.2 lakh for annual premium amount of Rs.12. To enroll, SMS PMSBY <nominee name> Y to XXX from your registered mobile number. The premium amount will be debited from your bank savings account.”

Did you recently get this message from your bank? If not, then you may soon get it. In his budget speech, finance minister Arun Jaitley said the government will launch two insurance products — Pradhan Mantri Suraksha Bima Yojna (PMSBY) and Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY).

“A large proportion of India’s population is without insurance of any kind, health, accidental or life. Worryingly, as our young population ages, it is also going to be pension-less. Encouraged by the success of the Pradhan Mantri Jan Dhan Yojana (PMJDY), I propose to work towards creating a universal social security system for all Indians that will ensure that no Indian citizen will have to worry about illness, accidents or penury in old age,” said Finance Minister Arun Jaitley in his budget speech on 1 Mar 2015.

For the above mentioned reason, Government announced insurance schemes Pradhan Mantri Suraksha Bima Yojana (for Accidental Death and Disability), Pradhan Mantri Jeevan Jyoti Bima Yojana (for life insurance) and Atal Pension Yojna (for pension).

Let us know these schemes in Detail:

Pradhan Mantri Suraksha Bima Yojna (PMSBY)

Nature of the Scheme:

The scheme will be a one year cover, renewable from year to year, Accident Insurance Scheme offering accidental death and disability cover for death or disability on account of an accident.

Who will be eligible to subscribe?

All savings bank account holders in the age 18 to 70 years in participating banks will be entitled to join. In case of multiple saving bank accounts held by an individual in one or different banks, the person would be eligible to join the scheme through one savings bank account only.

What is the premium payable under this Scheme?

Premium payable is Rs.12/- per annum per member.

How will the premium be paid?

The premium will be directly auto-debited by the bank from the subscribers account. This is the only mode available.

Risk Coverage/Benefits incurred under this Scheme?

 Who All are eligible to subscribe?

Any person having a bank account and Aadhaar number linked to the bank account can give a simple form to the bank every year before 1st of June in order to join the scheme.

What are the Terms and conditions of Risk Coverage?

A person has to opt for the scheme every year. He can also prefer to give a long-term option of continuing in which case his account will be auto-debited every year by the bank.

Who will implement this Scheme?

The scheme will be offered by all Public Sector General Insurance Companies and all other insurers who are willing to join the scheme and tie-up with banks for this purpose.

When can the accident cover assurance terminate?

The accident cover of the member shall terminate / be restricted accordingly on any of the following events:

Ø  On attaining age 70 years (age neared birth day).

Ø  Closure of account with the Bank or insufficiency of balance to keep the insurance in force.

Ø  In case a member is covered through more than one account and premium is received by the insurance company inadvertently, insurance cover will be restricted to one account and the premium shall be liable to be forfeited.

Government Contribution:

Ø  Various Ministries can co-contribute premium for various categories of their beneficiaries from their budget or from Public Welfare Fund created in this budget from unclaimed money. This will be decided separately during the year.

Ø  Common Publicity Expenditure will be borne by the Government.

Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)

Who All are eligible to subscribe?

The Scheme is available to people in the age group of 18 to 50 and having a bank account. People who join the scheme before completing 50 years can, however, continue to have the risk of life cover up to the age of 55 years subject to payment of premium.

What is the premium payable under this Scheme?

Premium paid will be Rs 330 per annum.  It will be auto-debited in one installment.

How will the premium be paid?

The payment of premium will be directly auto-debited by the bank from the subscribers account.

Risk Coverage under this scheme?

Rs. 2 Lakh in case of death for any reason.

What are the Terms and conditions of Risk Coverage?

A person has to opt for the scheme every year.  He can also prefer to give a long-term option of continuing, in which case his account will be auto-debited every year by the bank.

Who will implement this Scheme?

The scheme will be offered by Life Insurance Corporation and all other life insurers who are willing to join the scheme and tie-up with banks for this purpose.

Atal Pension Yojna (APY)

The Atal Pension Yojana (APY) will be focussed on all citizens in the unorganised sector, who join the National Pension System (NPS) administered by the Pension Fund Regulatory and Development Authority (PFRDA).

The existing subscribers of Swavalamban Scheme would be automatically migrated to APY, unless they opt out.

What are the benefits of APY?

It provides fixed pension for the subscribers ranging between Rs. 1000 to Rs. 5000, if he joins and contributes between the age of 18 years and 40 years. The contribution levels would vary and would be low if subscriber joins early and increase if he joins late.

Who All are eligible to subscribe?

Atal Pension Yojana (APY) is open to all bank account holders who are not members of any statutory social security scheme.

All bank account holders under the eligible category may join APY with auto-debit facility to accounts, leading to reduction in contribution collection charges.

What is the Age of joining and contribution period?

The minimum age of joining APY is 18 years and maximum age is 40 years. Therefore, minimum period of contribution by the subscriber under APY would be 20 years or more.

Who will implement this Scheme?

It is Government of India Scheme, which is administered by the Pension Fund Regulatory and Development Authority. The Institutional Architecture of NPS would be utilised to enrol subscribers under APY.

What is the Contribution by Government?

The benefit of fixed pension would be guaranteed by the Government. Government would provide

Ø  fixed pension guarantee for the subscribers.

Ø  would co-contribute 50% of the subscriber contribution or Rs. 1000 per annum, whichever is lower, to each eligible subscriber account, for a period of 5 years, i.e., from 2015-16 to 2019-20, who join the NPS before 31st December, 2015 and who are not income tax payers.

Ø  would also reimburse the promotional and development activities including incentive to the contribution collection agencies to encourage people to join the APY.

The Table of contribution levels, fixed monthly pension to subscribers and his spouse and return of corpus to nominees of subscribers and the contribution period is given below.