Health insurance is insurance against the risk of incurring medical expenses among individuals. By estimating the overall risk of health care and health system expenses, among a targeted group, an insurer can develop a routine finance structure, such as a monthly premium or payroll tax, to ensure that money is available to pay for the health care benefits specified in the insurance agreement.
Accidents take place frequently on the Indian roads. The middle class and the rich can opt for accidental insurance but for the poor paying the high premium can be impossible. The government has realized this problem and has announced the social security scheme Pradhan Mantri Suraksha Bima Yojana.
Overview of Pradhan Mantri Suraksha Bima Yojana (PMSBY)
The scheme will provide compensation to the deceased’s family in the event of an untoward incident. As the premium is low, the poor can afford it. This accidental insurance cover was announced in Budget 2015. It was formally launched by the Prime Minister on 9th of May in Kolkata. Both permanent and partial disabilities are covered by the scheme.
Features of Pradhan Mantri Suraksha Bima Yojana (PMSBY)
Who is eligible? Individuals between the age group 18 to 70 years qualify for the scheme.
How much premium do I have to pay? Excluding the service tax, the annual premium of the scheme is Rs.12.
How do I pay the premium? To add to the convenience, the health insurance premium amount is deducted from the savings account of an individual who holds the scheme through the “auto-debit” facility.
How much is sum assured? A lump sum amount of Rs. 2 lakhs is paid to the nominee, in case the subscriber loses his life in an accident. The same amount is paid out in case(s) of full disablement.
When is sum assured paid out? If the scheme holder meets with an accident suddenly or suffers a permanent partial disablement, then a sum of Rs.1 lakh is paid. Full disability is defined as the loss of sight in both the eyes, loss of use of both the hands/feet, whereas partial disability is defined as the loss of use of one of the hands or feet, loss of sight in one of the eyes.
Benefits of Pradhan Mantri Suraksha Bima Yojana
Death of the policyholder
Rs. 2 lakhs
Total permanent loss of sight in both the eyes, loss of use of both the hands, loss of use of both feet, or loss of sight in one eye and loss of use of one hand or loss of use of one foot
Rs. 2 lakhs
Total permanent loss of sight in one of the eyes or loss of use of one hand or one foot
Rs. 1 lakh
*The total amount that can be claimed as the benefit cannot be more than Rs. 2 lakhs in any case.
List of banks participating in Pradhan Mantri Suraksha Bima Yojana scheme:
Public Sector Bank
Private Sector Bank
Bank of India
Bank of Maharashtra
Bharatiya Mahila Bank
Kerala Gramin Bank
Oriental Bank of Commerce
Punjab and Sind Bank
Punjab National Bank
State Bank of Hyderabad
State Bank of India
State Bank of Travancore
Union Bank of India
United Bank of India
South Indian Bank
Note: The bank through which you purchase the policy (scheme or yojana) will be the master policyholder on your behalf. There will be a simplified and customer-friendly administration, and claim settlement process finalized by the master policyholder for you, which will work in consultation the particular insurance company.
List of insurance companies participating in Pradhan Mantri Suraksha Bima Yojana:
Public Sector Insurance Company
Private Sector Insurance Company
Public-private Sector Insurance Company
New India Assurance
Reliance General Insurance
Universal Sompo General Insurance
United India Insurance
ICICI Lombard General Insurance
National Insurance Company
Cholamandalam MS General Insurance
As on 2nd February 2016, 124 million Indians have already enrolled for the scheme. Financial planners are of the opinion that this scheme is a good option for individuals without a medical cover. As per the scheme:
Subscribers will have to renew the cover every year. If they want to avoid the hassle of renewing it every year, they can give an instruction to the bank for auto-debit. Any individual who has a bank account and an Aadhar number linked to the bank account can join the scheme by submitting a form to the bank. If the Aadhar card is not linked to the bank account, a copy of the Aadhar Card must be attached with the application form. In case an individual who wants to join the scheme has more than one account, he is eligible to join the scheme only through a single bank account.
When you decide to submit the application form you will have to fill in the necessary details which include name, contact information, Aadhar number and nominee details. The application form is available in several regional languages such as Bengali, Marathi, Oriya, Hindi, Gujarati, Telugu, and Tamil.
Claim process of Pradhan Mantri Suraksha Bima Yojana:
After the occurrence of an accident, it is necessary to inform the bank immediately. The claim form can be obtained from the bank or the insurance company. Within 30 days of the occurrence of the accident, the claim form must be submitted. It is important to support the claim form with the FIR, death certificate, and report of post-mortem, disability certificate (if any) and the discharge certificate. The details will be verified by the bank and the case will be forwarded to the insurance company within 30 days of submission of the claim. Finally, the claim will be paid out to the nominee. In case of absence of the nominee, the claim will be remitted to the legal heir.
The primary aim of this scheme is to increase insurance penetration in India and offer financial security to the poor.
Termination of Pradhan Mantri Suraksha Yojana:
Any of the below-mentioned events result in termination of the policy and no further benefits are offered to you:
The policy is subject to termination as long as you turn 70 (age as on nearest birthday)
The policy shall terminate in the event of closure of the savings account with the participating bank or failure to keeping sufficient balance for policy to remain in force
The policy shall terminate if the policyholder is covered by multiple accounts and the premiums are debited by insurance companies inadvertently, resulting in insurance cover limited to one policy only and the premium forfeited.
The policy shall cease in the event of insufficient balance on the due date, due to some technical error, or because of some administrative issue. To reinstate, the policyholder needs to pay the full annual premium with the cause of failure laid down. However, there will be no coverage applicable during that period and reinstatement will be at the sole discretion of the particular insurance company.
The participating bank auto-debits the premium in the month the option was given (in May, generally) and automatically pay the due amount to the insurance company in the same month.
Premium Appropriation of Pradhan Mantri Suraksha Bima Yojana
The annual premium per member is Rs. 10 payable to the insurance company.
Per member expense reimbursement to Micro/Agent/BC/Corporate is Rs. 1 annually.
Per member administrative expense reimbursement to participating bank is Rs. 1 annually.
Real-time enrollment of Pradhan Mantri Suraksha Bima Yojana
Over 124 million (i.e. 124, 738,419) people in India have already enrolled for this insurance scheme as on February 2, 2016.