Pradhan Mantri Suraksha Bima Yojana – Accidental death and disability coverage @ Rs 12 per year

Prime Minister Narendra Modi has launched three schemes for the benefits of Indians.  All saving bank account holders must have received SMS from their bank to enroll for the schemes.  Here are these three schemes;

Pradhan Mantri Suraksha Bima Yojana

Pradhan Mantri Suraksha Bima Yojana or PMSBY is an accidental insurance which provides insurance cover of Rs 2 lakhs in case of unfortunate event of death.

In case of total and irrecoverable loss of both eyes or loss of use of both hands or feet or loss of sight of one eye and loss of use of one hand or one foot sum insured is also Rs 2 lakhs.

However, in case of total and irrecoverable loss of sight of one eye or loss of use of one hand or one foot insurance coverage is Rs 1 Lakhs.

Policy holder or Pradhan Mantri Suraksha Bima Yojana or PMSBY is required to pay Rs 12 plus service tax per year to avail such benefits.

Premium amount of Rs 12 will be automatically debited from account holder’s saving bank account through auto debit facility in one instalment on or before 31st May.

Members may also give one-time mandate for auto-debit every year till the scheme is in force, subject to re-calibration that may be deemed necessary on review of experience of the scheme from year to year.

Pradhan Mantri Suraksha Bima Yojana will be valid for one year effective from 1st June 2015 to 31st May 2016. On payment of next year premium amount, it will automatically get renewed for the next year starting from 1st July 2016 to 31st may 2017. This means, the next annual renewal date shall be each successive 1st of June in subsequent years.

If you want to get benefit starting from 1st June 2015 to 31st May 2016 then join the scheme through your saving bank account by 31st may 2015. Now you also get extension till 31st august to join the scheme. Initially on launch, the period for joining may be extended by Govt. of India for another three months, i.e. up to 30th of November, 2015.

All saving bank account holders aged between 18 to 70 years are eligible to apply for Pradhan Mantri Suraksha Bima Yojana. This means, a person aged more than 70 years will not be eligible to get the benefits of this scheme.

In case of having multiple saving bank accounts in one or different private or nationalized banks, the person would be eligible to join the scheme through one savings bank account only. The person can choose any one saving bank account based on his or her preference.

Pradhan Mantri Suraksha Bima Yojana  scheme would be offered or administered through Public Sector General Insurance Companies (PSGICs) and other General Insurance companies willing to offer the product on similar terms with necessary approvals and tie up with Banks for this purpose. Participating banks will be free to engage any such insurance company for implementing the scheme for their subscribers.

Termination of Pradhan Mantri Suraksha Bima Yojana

As per the rules the accident cover for the policy holders shall terminate on any of the following events and no benefit will be payable;

  • On attaining age 70 years (age nearest birth day)
  • Closure of account with the Bank or insufficiency of balance to keep the insurance in force.
  • In case a member is covered through more than one account and premium is received by the Insurance Company inadvertently, insurance cover will be restricted to one only and the premium shall be liable to be forfeited.
  • If the insurance cover is ceased due to any technical reasons such as insufficient balance on due date or due to any administrative issues, the same can be reinstated on receipt of full annual premium, subject to conditions that may be laid down. During this period, the risk cover will be suspended and reinstatement of risk cover will be at the sole discretion of Insurance Company.

Editorial Staff at Yourfinancebook is a team of finance professionals. The team has more than a decade experience in taxation and personal finance.