The government on Tuesday raised the premium for its flagship insurance schemes -- Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and Pradhan Mantri Suraksha Bima Yojana (PMSBY) in order to make them economically viable.
The premium rate of PMJJBY has been revised upward to Rs 1.25 per day, translating into an increase from Rs 330 to Rs 436 annually.
The annual premium for PMSBY has been hiked from Rs 12 to Rs 20, an official statement said.
The new premium rates are effective from June 1, 2022.
In percentage terms, the premium increase is 32 per cent in case of PMJJBY and 67 per cent for PMSBY The decision has been taken in view of the long-standing adverse claims experience of the schemes, it added.
The number of active subscribers enrolled under PMJJBY and PMSBY as on March 31, 2022 were 6.4 crore and 22 crore, respectively.
Since the launch of the PMSBY, an amount of Rs 1,134 crore has been collected by the implementing insurers towards premium and claims of Rs 2,513 crore have been paid as on March 31, 2022.
Further, an amount of Rs 9,737 crore has been collected by the implementing insurers towards premium and claims of Rs 14,144 crore have been paid under PMJJBY as on March 31, 2022.
Claims under both the schemes have been deposited into the bank accounts of the beneficiaries through the direct benefit transfer (DBT) route.
The transmission of benefits through these schemes were closely monitored during COVID-19 and a host of measures were taken to simplify the procedures and expedite claims, including, outreach programmes and messages from the banks to reach out to beneficiaries of the people who died during the pandemic, simplifying claims form and proofs of death and many more, it said.
''It may be recalled that the original approval at the time of launch of the schemes in 2015 provided for an annual review of the premium amount (Rs. 12/ for Pradhan Mantri Suraksha Bima Yojana and Rs. 330 for Pradhan Mantri Jeevan Jyoti Bima Yojana) based on the claims experience.
''However, no revision of premium rates was made in the last seven years since inception of the schemes in spite of recurring losses to the insurers,'' it said.
Upon examination of the claims experience of the schemes, it said, IRDAI informed that while the claims ratio (percentage of amount of claims paid to premium earned) pertaining to PMJJBY and PMSBY, for the period up to March 31, 2022, was 145.24 per cent and 221.61 per cent respectively, the combined ratio (sum of claims ratio and expense ratios) pertaining to PMJJBY and PMSBY for the period stood at 163.98 per cent and 254.71 per cent.
Revised rates would also encourage other private insurers to come on board for implementing the schemes, thereby increasing the saturation of the schemes among the eligible target population, especially those who are underserved or unserved.
Towards fulfilling Prime Minister Narendra Modi's vision of making India a fully insured society, a target has been set to increase the coverage from 6.4 crore to 15 crore under PMJJBY and from 22 crore to 37 crore under PMSBY in the next five years that will take us closer to cover the eligible population through these two flagship schemes for social security.
The PMJJBY offers life insurance cover of Rs 2 lakh in case of death due to any reason to people in the age group of 18-50 years having a bank or post office account, who give their consent to join or enable auto-debit of premium.
On the other hand, the PMSBY offers insurance cover of Rs 2 lakh for accidental death or total permanent disability and Rs 1 lakh for partial permanent disability to people in the age group of 18-70 years with a bank or post office account, who give their consent to join or enable auto-debit of premium.
(With PTI inputs)