The government has rejected the proposal of insurance companies to increase the premium rates of Pradhan Mantri Suraksha Bima Yojana (PMSBY) and Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), the two popular social security schemes that were launched by the Prime Minister in 2015. The schemes were launched to offer financial security to poor section of the society, considering the low insurance cover they offer.
Pradhan Mantri Suraksha Bima Yojana is a personal accident policy with a cover of Rs 2 lakh at Rs25. The plan covers you and your family in the event of an accidental death. It also covers you if there is any loss of income due to a disability. The cover offers you coverage upto the age of 70. On the other hand Pradhan Mantri Jeevan Jyoti Bima Yojana is a pure term plan which pays Rs 2 lakh to the family as claim money to the family of the insured in case of any eventuality.
Insurance companies asked for a jump in premium rates due to high claim ratio they have experienced in both the schemes. The policy rates are subject to revision after every 3 years.
Under PMJJY, around Rs1756 was collected as premium against the claim outgo of Rs Rs1931 crore. Currently, around 5.3 crore people are registered under the PMJJY scheme.
Similarly, Rs161 crore was collected as premium under the scheme PMSBY against the claim outgo of Rs300 crore, resulting in a loss of 100 per cent to the insurance companies. Insurers want to increase the insurance premium to Rs30 from the existing rate of Rs 25. Compared to this, Life Insurance Corporation of India charges a premium of Rs 80 for the cover of Rs 2 lakh. PMSBY has total 13.5 crore as subscribers to the scheme. The New India Assurance, National Insurance Company and United India Insurance have 75% of the market share while the rest is with private sector insurers.