The most common financial advice that people get when they start earning is to get insurance. A term plan is one of the first insurance products to add to your financial portfolio. A term insurance policy is a pure protection life cover plan that provides life coverage to the policyholder for the plan's duration. There are no maturity or survival benefits associated with a term plan. The term insurance scheme launched by the Government of India is called the Pradhanmantri Jeevan Jyoti Bima Yojana (PMJJBY).
Term insurance plans are typically more affordably priced than savings insurance policies. This fundamental insurance product is designed to provide peace of mind to you and financial security to your family members in your absence. Different insurers offer variations of the basic term plan.
The Pradhanmantri Jeevan Bima Yojana is a government initiative to encourage insurance coverage across underprivileged families in India. Launched by the central government of India, the Pradhanmantri Jeevan Jyoti Bima Yojana aims to secure the lives and future financial security of people from the poor and low-income segments of society. This is a straightforward term plan with pre-set ages of entry and exit, fixed sum assured, and enrolment criteria. Here's everything you need to know about the Pradhan Mantri Bima Yojana.
What is the PMJJBY or Pradhanmantri Jeevan Jyoti Bima Yojana?
PMJJBY is the acronym for Pradhanmantri Jeevan Jyoti Bima Yojana. This government scheme is a term insurance plan created by the Indian government. The Pradhan Mantri Bima Yojana was first introduced in Budget 2015 before seeing a nationwide launch in May of the same year. On May 9, 2015, Prime Minister Narendra Modi launched the Pradhanmantri Jeevan Jyoti Bima Yojana in Kolkata.
The primary focus of the Pradhanmantri Jeevan Bima Yojana is to provide financial security to low-income families in the event of the breadwinner's death. Under this plan, the life coverage for the policyholder begins on June 1 and lasts till May 31 every year. The Pradhanmantri Jeevan Jyoti Bima Yojana can be renewed annually.
What are the features offered by the Pradhanmantri Jeevan Jyoti Bima Yojana?
The Pradhanmantri Jeevan Jyoti Bima Yojana is an effective term plan for underprivileged families in India. Here's a quick snapshot of the PMJJBY scheme features:
- The Pradhanmantri Jeevan Bima Yojana provides life cover for the term of one year at a time. The plan can be renewed annually by paying the premium.
- The primary focus of this plan is to ensure affordable and comprehensive life cover to the economically backward sections of society. With this in mind, the annual premium charged under the Pradhan Mantri Bima Yojana is a nominal Rs. 330 per year. This premium amount includes Rs. 289 per annum paid to the insurance company as premium, Rs. 30 per annum paid to agent or bank as reimbursement of expenses, and Rs. 11 per annum paid to the participating bank as reimbursement of administrative costs.
- For the affordable price of Rs. 330 per year, the policyholder gets life coverage equal to Rs. 2 lakhs. The coverage amount provided as a death benefit to the nominee is tax-free.
- The premium remains the same for all Pradhanmantri Jeevan Jyoti Bima Yojana subscribers between the ages of 18 and 50 years.
- Once you enrol in the Pradhanmantri Jeevan Bima Yojana, your life cover begins 45 days post-enrolment. However, in case of the policyholder's death within these 45 days due to an accident, the Pradhanmantri Jeevan Bima Yojana will pay the sum assured to the nominees.
- Launched by the government of India, the Pradhanmantri Jeevan Bima Yojana can be purchased via any of the partnering banks and private insurance providers in the country.
- The policyholder must have a savings bank account as the premium for the Pradhanmantri Jeevan Bima Yojana is auto-debited directed from the registered bank account.
- The Pradhanmantri Jeevan Jyoti Bima Yojana offers a straightforward and quick claims process.
- The plan can be renewed year-on-year till the policyholder attains the age of 55 years.
- The Pradhanmantri Jeevan Bima Yojana can be discontinued by not renewing it at the end of the policy year. One can also re-join the scheme at any time by submitting a health certificate and paying the policy premium.
- One can also boost their coverage by opting for the PMSBY in addition to the Pradhanmantri Jeevan Jyoti Bima Yojana. The PMSBY provides accident insurance coverage in case of disability and accidental death on an annual basis.
What are the benefits of the Pradhanmantri Jeevan Jyoti Bima Yojana?
The Pradhan Mantri Bima Yojana is a group term plan offering a host of necessary benefits to policyholders.
Like any other pure protection term plan, the Pradhanmantri Jeevan Bima Yojana provides life cover for the plan's duration. Suppose the policyholder were to die during the tenure of the plan. Then, the nominees listed in the policy would receive a death benefit of Rs. 2 lakhs.
The Pradhan Mantri Bima Yojana offers risk cover for a year. The policy is easily renewed annually.
With the Pradhanmantri Jeevan Jyoti Bima Yojana, you can earn tax benefits for the premiums paid under Section 80C of the Income Tax Act of India 1961. The death benefit proceeds are tax-free under this plan. However, the policyholder needs to submit form 15G/H to avail of this tax benefit. If the policyholder does not submit this form, any insurance proceeds from the policy that exceed Rs. 1 lakh will be taxed at the rate of two percent .
How do you enrol in the Pradhanmantri Jeevan Jyoti Bima Yojana?
The end-to-end process of enrolling and reaping benefits from the Pradhan Mantri Bima Yojana is made easy and straightforward for every eligible Indian. This term plan is offered by LIC, IndiaFirst Life Insurance, and other private life insurance companies in India to boost the reach of the Pradhan Mantri Bima Yojana. The plan can also be availed of by contacting partnering banks.
The Pradhanmantri Jeevan Jyoti Bima Yojana form is available online and can be downloaded at the click of a button on the Jan Suraksha website. The PMJJBY application form may be offered in regional languages, like Bangla, Gujarati, Hindi, Marathi, Tamil, Telugu, Odia, Kannada, and English. Your chosen insurance service provider or bank can guide you through the process of enrolment for the Pradhanmantri Jeevan Bima Yojana.
The Pradhanmantri Jeevan Jyoti Bima Yojana is limited to one term plan for every policyholder.
The Pradhan Mantri Bima Yojana is connected to your savings bank account. However, this does not mean that you can sign up for multiple PMJJBY policies if you have multiple bank accounts or more than one account in the same bank. You are entitled to join the Pradhanmantri Jeevan Bima Yojana using only one bank account from any bank.
What are the eligibility criteria for the Pradhanmantri Jeevan Bima Yojana?
- The minimum age at the time of entry into the policy is 18 years, while the maximum age at entry is limited to 50 years.
- The maximum life coverage age of the policy is 55 years.
- The Pradhan Mantri Bima Yojana is an annually renewable policy.
- A savings bank account is mandatory for the purpose of enrolment and operation of the Pradhanmantri Jeevan Jyoti Bima Yojana.
- The coverage period under the Pradhan Mantri Bima Yojana is one year, beginning from June 1 to May 31 of the following year.
- The sum assured offered as the death benefit is fixed at Rs. 2 lakhs under the PMJJBY.
- One person is allowed to have only one PMJJBY policy, irrespective of how many separate bank accounts they may have.
It is possible to get lost in the financial jargon of insurance product literature. The Pradhan Mantri Bima Yojana overrides this concern by keeping the language, enrolment process, and claims process streamlined and straightforward. Here are a few other salient things to keep in mind while enrolling for the Pradhanmantri Jeevan Jyoti Bima Yojana:
- There is a 45-day cooling period or lien associated with the Pradhan Mantri Bima Yojana. These 45 days start after you enrol in the plan, and your coverage begins only after the end of these 45 days. However, this period is exempted in the case of the accidental death of the policyholder. Here, the sum assured is paid to the nominee immediately.
- The Pradhanmantri Jeevan Bima Yojana is connected to your savings bank account. If the linked bank account is closed or there are insufficient funds in the account, the Pradhan Mantri Bima Yojana will be automatically terminated.
- While you can only have one PMJJBY account registered, you can get add-on coverage by enrolling in other initiatives such as the PMSBY (Pradhan Mantri Suraksha Bima Yojana).
- The premium amount for the Pradhanmantri Jeevan Bima Yojana is directly deducted from your savings bank account between May 25 and May 31 of every year.
The IndiaFirst Life PMJJBY insurance plan is a group insurance plan that provides pure life protection to all the group members under the master policyholder's single policy contract. With the IndiaFirst Life PMJJBY insurance plan, partnering banks and financial institutions can offer the features and benefits of the scheme to their group members while enjoying the advantages of a group protection plan.
If you are not eligible to apply for the Pradhanmantri Jeevan Bima Yojana, do not worry—IndiaFirst Life term plans have you covered. Use the IndiaFirst Life Instant Term Plan Premium Calculator to get a quick quote for IndiaFirst Life e-Term Plan or opt for the IndiaFirst Life Plan, a fuss-free term policy.
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