Pm Insurance

The Government of India has launched several Pradhan Mantri insurance schemes that provide life and accident insurance coverage to a large segment of the Indian population at very low annual premiums, accessible through savings bank accounts. These PM insurance schemes represent a significant government initiative to extend basic financial protection to economically vulnerable and middle-income households that may not hold standard retail insurance products.

For bank account holders in India, understanding what PM insurance schemes are available, how to enrol, what they cover, and how they complement or differ from standard retail insurance products is practically important financial literacy.

The Pradhan Mantri Jeevan Jyoti Bima Yojana

Pradhan Mantri Jeevan Jyoti Bima Yojana, abbreviated as PMJJBY, is a government-sponsored renewable term life insurance scheme that provides a death benefit of two lakh rupees to the nominee of the insured bank account holder in the event of the insured's death from any cause during the policy year.

PMJJBY is available to Indian bank account holders in the age group of eighteen to fifty years. The premium is deducted automatically from the enrolled bank account once a year in May or at the time of enrolment. The premium has been revised over time from the original amount, and the current applicable annual premium should be confirmed from the bank or the official government scheme website as premium revisions are made periodically.

The scheme is administered by life insurance companies including LIC and various private sector life insurers, with the insurance coverage underwritten by the participating insurer. The premium collected from bank account holders is paid by the bank to the insurer, who maintains the coverage and processes death claims.

For the nominee to receive the two lakh rupee death benefit, the claim must be filed with the insurer through the bank within the specified period after the insured's death. The required documentation includes the death certificate, the nominee's identity and bank account details, and the claim form.

For any individual who holds a savings bank account in the eligible age group and does not have any life insurance, PMJJBY provides a basic life coverage at a very low annual premium that can be enrolled through their bank. While the two lakh rupee benefit is modest relative to the comprehensive coverage that adequately sized term insurance provides, it is a meaningful baseline for households that have no other life insurance.

The Pradhan Mantri Suraksha Bima Yojana

Pradhan Mantri Suraksha Bima Yojana, abbreviated as PMSBY, is a government-sponsored renewable accident insurance scheme that provides coverage for accidental death and disability. Unlike PMJJBY which covers death from any cause, PMSBY is specifically restricted to accident-related outcomes.

The coverage under PMSBY includes two lakh rupees for accidental death and permanent total disability, and one lakh rupees for permanent partial disability. Natural cause deaths are not covered under PMSBY.

PMSBY is available to Indian bank account holders in the age group of eighteen to seventy years. The annual premium is a modest amount deducted automatically from the enrolled bank account, with the exact current premium to be confirmed from the bank or official scheme source as it is revised periodically.

The scheme is administered by general insurance companies, with participating insurers underwriting the accident risk. The bank serves as the enrolment and premium collection channel.

For a bank account holder who wants basic accident insurance at a very low annual cost, PMSBY provides the minimum baseline protection against accidental death or disability from a bank account-linked enrolment.

Bank Account Insurance: The DICGC Connection

In addition to the PM insurance schemes that use bank accounts as the enrolment channel for life and accident insurance, the term bank account insurance also refers to the deposit insurance coverage provided by the Deposit Insurance and Credit Guarantee Corporation, or DICGC, for bank deposits.

DICGC is a wholly owned subsidiary of the Reserve Bank of India that provides insurance to bank depositors for their deposits in insured banks. Following the Deposit Insurance and Credit Guarantee Corporation (Amendment) Act 2021, the insurance coverage per depositor per bank was increased from one lakh rupees to five lakh rupees.

This DICGC deposit insurance means that if a scheduled commercial bank fails, each depositor's deposits at that bank are insured up to five lakh rupees per depositor per bank, combining all types of deposits including savings, current, and fixed deposits.

For a depositor with multiple bank accounts at different banks, each bank's deposits are separately insured up to five lakh rupees, providing five lakh rupees of protection at each bank. For a depositor with deposits exceeding five lakh rupees at a single bank, the amount above five lakh rupees is not covered by deposit insurance.

This deposit insurance is separate from the life and accident insurance provided through PMJJBY and PMSBY. Deposit insurance protects the financial value of bank deposits in the event of bank failure, while PMJJBY and PMSBY protect against the personal financial consequences of the bank account holder's death or disability.

How to Enrol in PMJJBY and PMSBY Through Your Bank

Enrolment in PMJJBY and PMSBY is accessible through any bank branch, internet banking portal, or mobile banking application of a scheduled commercial bank.

For branch enrolment, the account holder fills a consent and declaration form at the branch, authorising the annual premium auto-debit from the savings account and nominating a beneficiary for the life insurance benefit or disability benefit.

For digital enrolment, most banks provide the PMJJBY and PMSBY enrolment option within the insurance or government schemes section of their internet banking or mobile banking platform. The account holder selects the scheme, confirms the nominee details, and authorises the premium auto-debit.

The premium is deducted from the account annually in May or at the time of enrolment for the first year. The scheme is renewed annually by the auto-debit of the premium from the enrolled account, and the coverage lapses if the account balance is insufficient for the auto-debit at renewal time.

For individuals with multiple bank accounts at different banks, PMJJBY coverage can technically be obtained through only one bank account as the scheme is intended for individual coverage, not multiple coverage through multiple enrolments. PMSBY has similar restrictions against multiple enrolment for the same individual across different banks.

The Coverage Gap: What PM Insurance Schemes Do Not Address

For individuals who hold only PMJJBY and PMSBY as their insurance coverage, there are significant protection gaps that these schemes do not address.

PMJJBY provides a two lakh rupee death benefit. For a household with a home loan of thirty lakh rupees, children in school, and a dependent spouse, two lakh rupees provides only the most minimal financial support and cannot replace the income loss from the primary earner's death. Adequately sized term insurance with a sum assured of one crore rupees or more is needed to genuinely protect such a household's financial wellbeing.

PMSBY covers accidental death and disability but not natural cause death or health events. Hospitalisation costs from illness are not covered. A critical illness or major surgery that generates a five lakh rupee hospital bill is entirely outside PMSBY's coverage.

Health insurance covering hospitalisation from all causes is absent from both PM insurance schemes. The PM-JAY health insurance scheme addresses this for the bottom forty percent of the population by socioeconomic status, but for middle-income households above the PM-JAY threshold, retail health insurance from licensed insurers is the appropriate coverage.

The PM insurance schemes are valuable as a baseline coverage for the otherwise uninsured, but they are not substitutes for comprehensive financial protection. For households that hold PMJJBY and PMSBY, these schemes are a meaningful starting point that should be supplemented with adequately sized term life insurance and health insurance from licensed insurers.

Pradhan Mantri Fasal Bima Yojana: Agricultural Insurance

Pradhan Mantri Fasal Bima Yojana, or PMFBY, is a separate PM insurance scheme specifically for crop insurance for farmers. It provides coverage against crop loss from natural calamities, pests, and diseases for farmers who have taken crop loans or choose to enrol voluntarily.

PMFBY is a distinct scheme from PMJJBY and PMSBY, targeting agricultural risk rather than personal life or accident risk. For farmers with bank accounts, awareness of PMFBY alongside PMJJBY and PMSBY represents the full range of PM insurance schemes relevant to their personal and agricultural financial protection.

Exploring Insurance Options on Stashfin

Stashfin provides access to insurance plan options from licensed life and general insurers that go beyond the baseline coverage of government schemes. Exploring what is available through the Stashfin app or website is a practical starting point for individuals looking to supplement their PM insurance scheme coverage with adequate term life insurance and health insurance.

Insurance products are subject to IRDAI regulations and policy terms. Please read the policy document carefully before purchasing. Stashfin acts as a referral partner only.