The central government is looking to enhance the coverage of two major insurance schemes — the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and the Pradhan Mantri Suraksha Bima Yojana (PMSBY). This proposed increase aims to offer better financial protection to policyholders and their families.
What’s Changing?
According to a report by Livemint, the government is considering raising the insurance cover under both PMJJBY and PMSBY from the current Rs 2 lakh to Rs 5 lakh. This move is expected to be introduced ahead of the upcoming state Assembly elections in Maharashtra, Haryana, and Jammu and Kashmir.
The primary goal of this adjustment is to address what is known as the “protection gap” in insurance coverage. A higher cover amount is believed to provide better financial security for individuals and their dependents, helping them meet their financial needs more effectively. As one insider noted, a Rs 5 lakh cover could significantly reduce this protection gap.
Current Enrollment Numbers
As of now, PMJJBY has over 200 million subscribers, while PMSBY boasts approximately 453.6 million enrollees. The proposed increase in coverage is part of the government’s broader initiative to provide insurance for all by 2047. This is particularly relevant as India’s insurance penetration — which is the ratio of insurance premium to GDP — stands at 4%, below the global average of 6.8%.
What Will It Cost?
Under the new plan, individuals will have the choice to either opt for the higher coverage with a revised premium or maintain the existing Rs 2 lakh cover at the current premium rates. For PMSBY, the premium is Rs 20 per year per family member, while for PMJJBY, it is Rs 436 per year per family member.
Overview of the Schemes
PMSBY: Launched in May 2015, PMSBY provides one-year personal accident insurance. It is renewable annually and offers protection against death or disability caused by an accident. The coverage includes Rs 2 lakh for death and between Rs 1-2 lakh for disability. Available to individuals aged 18 to 70 with a bank account, the premium is automatically deducted from the insured’s savings account.
PMJJBY: Also launched in May 2015, PMJJBY offers life insurance coverage in the event of the insured’s death. The scheme is managed through the Life Insurance Corporation of India (LIC) and other participating insurers. It is available to Indian residents aged 18 to 50 with a bank account.
This planned increase in coverage underscores the government’s commitment to improving financial protection for all citizens and addressing gaps in current insurance schemes.
