Insurance is not a new topic in India but still, its reach is limited to a few people.
Though there are so many insurance companies operating in India, still there is a large number of people especially in rural areas who are not covered under any kind of insurance.
This section of the society is mostly below the poverty line and insurance service is unaffordable for them.
Hence, our government has introduced “Pradhan Mantri Suraksha Bima Yojana” after the successful performance of Jan Dhan Yojana, keeping in mind the poor masses.
What is Pradhan Mantri Suraksha Bima Yojana (PMSBY)?
Pradhan Mantri Suraksha Bima Yojana (PMSBY) is a government-backed accident insurance scheme in India.
It was launched by our honorable Prime Minister Narendra Modi on 9 May 2015 in Kolkata.
The scheme was launched with the intent to increase the insurance coverage amongst the masses.
Any individual between 18 and 70 years of age with a bank account can open Pradhan Mantri Suraksha Bima Yojana account.
The scheme will cover for one year and is renewable from year to year.
Features of Pradhan Mantri Suraksha Bima Yojana
The key highlight of this scheme is its low premium which stands at Rs 12 p.a. (i.e. Rs 1 every month).
2. Risk Coverage
The coverage of Rs 2,00,000 will be provided in case of full disability or accidental death and Rs 1,00,000 in case of partial disability.
3. Payment mode
The premium will be auto-debited directly from the account of the subscriber and this is the only mode available.
An account holder between 18 and 70 years of age, who have given their approval to join the PMBSY scheme or enable the auto debit feature, can enroll in this scheme.
5. Terms of Risk Coverage
A person needs to renew this scheme every year. Moreover, he/she can also choose the long-term option where his account will be debited every year by the bank.
Pradhan Mantri Suraksha Bima Yojana (PMSBY) Benefits
a. Tax benefits
The proceeds received under this scheme will get tax-exemption u/s 10(10D).
But in case the proceeds from the policy is over Rs 1,00,000, TDS will be applied @ 2% from the overall proceeds if no Form 15G or Form 15H is submitted to the insurer.
Moreover, the premium paid will also be tax-free under section 80C of the Income Tax Act.
b. Low premium
The main attraction of this scheme is its low premium of Rs 12 p.a. which makes it possible for the even the poorest of the poor to avail the scheme.
How to apply for this scheme?
You are required to link your Aadhar card to your bank account.
Then fill up the application form and submit the same to your bank.
However, the individuals have to submit the application every year to be covered under this scheme. Whenever you fill the form, you need to mention the name of the nominee along with the relationship.
Click to download the application form for PMSBY.
The major exclusions include suicide or suicidal attempt under the influence of drugs or liquor, intentional self-injury or loss arising from an act due to a breach of law with or without criminal intent.
Termination of Cover
The individual will not be entitled to any benefit and the accident cover will get terminated in case of any of the following events-
1. In case the individual attains 70 years of age.
2. The account has been closed as there is insufficient fund in the account to keep the insurance active.
3. When a person is covered by more than one account. Insurance cover will be limited to only one account and the premium on other accounts will be forfeited.
4. When the insurance cover is ceased due to any technical reasons like insufficiency of funds on the due date or any administrative issues, the same can be reinstated on receipt of full annual premium (subject to conditions that may be laid down).
The risk cover will be suspended during this period and reinstatement of risk cover will be at the sole discretion of Insurance Company.
Also Read: Pradhan Mantri Jeevan Jyoti Bima Yojana
Pradhan Mantri Suraksha Bima Yojana is one of the most important social security programmes initiated by our government to help especially the poor and the underprivileged people and to cover them with the basic social security benefit.
As on January 2018, over 13.28 crore enrolments have already been made under this scheme (source).
So what are you waiting for? Go to the nearest bank and apply for this scheme today.
Know more about Govt. schemes and their benefits in the free course: Government Financial Schemes
Take care and keep learning!!