Govt Insurance Schemes Premium Hiked

Table of Contents

Question

Consider the following statements about central government run insurance schemes:

PMJeevan Jyoti Bima Yojana is available to people in the age group of 18 to 50 with risk coverage of Rs. 5 lakh in case of death of the insured.
Pradhan Mantri Suraksha Bima Yojana is available to people in the age group 18 to 70 years with risk coverage of Rs. 5 lakh for accidental death.

Which of the above statements is/are correct?

Number of Policy- One person One policy in both PMSBY & PMJJBY
Mode of Payment- In both the schemes premium is auto debited from your saving account.
Period of Coverage – In both schemes the period of coverage is of only one year that from 1^st June to 31 May of Next year.
Tax Benefit – In both the schemes you would not be getting any Tax benefit.

For the first time, the premium rates for PMJJBY & PMSBY have been increased since the schemes were launched seven years ago in 2015.
The premium rates of both schemes have been revised, with PMJJBY being increased from Rs 330 to Rs 436 and PMSBY being increased from Rs 12 to Rs 20.
In percentage terms, the premium increase is 32 per cent in case of PMJJBY and 67 per cent for PMSBY.

The decision has been taken in view of the long-standing adverse claims experience of the schemes.
According to the PIB release, as on 31.3.2022, there were 6.4 crore and 22 crore active members enrolled in PMJJBY and PMSBY, respectively.
The implementing insurers had collected Rs 1,134 crore in premiums and had paid Rs 2,513 crore in claims under the PMSBY and under PMJJBY insurers had collected Rs. 9,737 crore in premiums and had paid Rs. 14,144 crore in claims.
During COVID-19 pandemic, the transmission of benefits through these schemes was closely monitored, and a variety of measures were implemented to simplify procedures and expedite claims, including outreach programs and messages from banks to reach out to beneficiaries of people who died during COVID, the simplification of claim forms and proofs of death etc due to which large claims were approved.

IRDAI has informed that while the claims ratio (percentage of amount of claims paid to premium earned) pertaining to PMJJBY and PMSBY, for the period up to March 31, 2022, was 145.24 per cent and 221.61 per cent respectively. (If expenses are included then the ratio is much higher).
Revised rates might encourage other private insurers to come on board for implementing the schemes, thereby increasing the saturation of the schemes among the eligible target population. As of now, PMJJBY is implemented by LIC & PMSBY is implemented by state general insurance companies like National Insurance Company Limited.
Towards making India a fully insured society, a target has been set to increase the coverage from 6.4 crore to 15 crore under PMJJBY and from 22 crore to 37 crore under PMSBY in the next five years.