The central government is planning to increase the sum insured under two of its flagship insurance schemes -- Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and Pradhan Mantri Suraksha Bima Yojana (PMSBY).
The government may increase cover from the current INR200,000 ($2,384) to INR500,000 under both the schemes in the run-up to the high-stakes state Assembly elections in Maharashtra, Haryana, Jammu and Kashmir, reported Livemint.
“The changes are being considered with a view to addressing the issue of the protection gap in the insurance cover. Higher coverage will provide the requisite amount required by an insured or a dependent to meet financial obligations. The thinking is that a INR500,000 cover under the schemes would help to bridge this protection gap substantially," a person aware of the proposed development told Livemint.
Currently, PMJJBY has more than 200m while the PMSBY has 453.6m.
Individuals will have the option to either take the higher cover on paying an increased premium or continue with the existing INR200,000 coverage — at a premium of INR20 per annum per member of a family for PMSBY, and INR436 per annum per member for PMJJBY.
So far, the Ministry of Finance has not issued any statement in this regard.
PMJJBY and PMSBY were launched in 2015 and can be purchased by Indian residents, regardless of income. PMJJBY provides coverage for death due to any reason, that is, it is a life insurance plan. PMSBY provides coverage for accidental death and disability. Both schemes require individuals to have a bank savings account.
PMJJBY is sold to Indian residents between the ages of 18 and 50 years while PMSBY is available to those aged from 18 to 70 years.