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Source: Compendium Insurance

Personal accident insurance scheme under Jan Suraksha zooms past 100 million policies

The personal accident scheme under the Pradhan Mantri Jan Suraksha Yojana has crossed the 100 million subscriber mark. As of May 6, the scheme had enrolled 100.18 million subscribers according to data from the Jan Suraksha website.

Pradhan Mantri Suraksha Bima Yojana (PMSBY), which is the personal accident scheme under the Jan Suraksha Yojana, offers a cover of Rs 2 lakh as against an annual premium of only Rs 12. All individual (single or joint) bank account holders in the age 18 to 70 years in participating banks are entitled to join.

In case of incidents like road, rail and similar vehicular accidents, drowning, death involving any crime, the accident should be reported to police. In case of incidents like snake bite, fall from tree, the cause should be supported by immediate hospital record.

Natural calamities being in the nature of accidents, any death / disability (as defined under PMSBY) resulting from such natural calamities is also covered under PMSBY. While death due to suicide is not covered, that from murder is covered.

The total number of enrollments under Jan Suraksha Yojana that also includes the term insurance plan called Pradhan Mantri Jeevan Jyoti Bima Yojana which has 31.1 million enrollments as on May 6.

Among the banks, State Bank of India followed by Punjab National Bank and Andhra Bank had the highest number of enrollments, according to the government data.

Several insurance companies had sought an increase in the premiums for the personal accident cover since it was only priced at Rs 12.

“Of the Rs 12 collected as premium, we are required to pay administrative charges and expenses to micro agents of Rs 1 each. The effective premium is then Rs 10 that the insurer gets, which makes little business sense given the costs involved,” said the chief of large general insurance company.

However, he added that the scheme has helped in insurance penetration get deeper in Tier II,III towns in the country.

While no revision has been permitted in the premium for PMSBY for FY18, it is likely that the premiums will go up in FY19. A senior executive of a large state-owned general insurance company said that since in 2018 the scheme will complete three years, they will seek a revision in premiums for the product. The prices may go up by 10-15 percent considering the number of claims being received.

Prime Minister Narendra Modi launched the Jan Suraksha Yojana in May 2015 to enable all citizens to have access to basic insurance and pension at a low cost. Apart from the two insurance schemes, it also consists of a pension product, Atal Pension Yojana.

Source: Money Control

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