Tag: PMJJBY

Insurance cos hope for a hike in PMJJBY premium

Banking & Finance

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Life insurance companies have pitched for a re-pricing of the government’s flagship Pradhan Mantri Jeevan Jyoti Beema Yojana.

According to calculations, the premium would have to be fixed at a little over ₹400 per annum per policy from the current ₹330.

Launched in 2015, the PMJJBY scheme provides a life cover of ₹2 lakh to people in the age group of 18 to 50 years (life cover up to age 55) having a savings bank account. The scheme is available for one year, stretching from June 1 to May 31 and is renewable every year.

The government had chosen to keep the premium rate low to enable more people to take life cover and get social security.

However, insurers point out that the premium for the life insurance cover was fixed a long time ago and needs to be reviewed. Further, there has also been a rise in claims under the scheme following the Covid-19 pandemic.

“It is very, very important that the premiums for the scheme increase. It has not been hiked even once since the scheme was launched. It is not sustainable at the moment,” said an official with a life insurance company.

“We are hoping that the premium is reviewed. A large number of people have joined the scheme, especially in the last two years. Claim ratio has also increased since the pandemic,” said another insurer.

On a cumulative basis, there were 10.34 crore persons enrolled under the scheme with a total of 2.6 lakh claims by May this year.

The government is also looking to bring more people under the scheme. The Finance Ministry had recently said it would try and bring the 43.04 crore eligible account holders of the Pradhan Mantri Jan Dhan Yojana announced under PMJJBY and Pradhan Mantri Suraksha Bima Yojana. Banks have already been communicated on the issue, it had said.

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KVG Bank enrolls more than 4,000 APY accounts in a single day

Banking & Finance

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The Dharwad-headquartered Karnataka Vikas Grameena Bank (KVGB), a regional rural bank sponsored by Canara Bank, has enrolled (cumulative) 2,25,168 accounts under Atal Pension Yojana (APY), since the introduction of this scheme, according to P Gopi Krishna, Chairman of the bank.

APY is a safety net for workers in the informal sector for getting pre-defined pension after 60 years.

Gopi Krishna said that the bank’s Chikkodi regional office has set a new record by enrolling 4,125 accounts under APY in a single day.

The Chairman added that KVGB is playing a pivotal role in implementation of social security schemes such as APY, Prime Minister Jeevan Jyothi Bhima Yojana (PMJJBY), and the Prime Minister Suraksha Bhima Yojana (PMSBY).

It has enrolled 5,47,830 policies under PMJJBY and 12,28,320 policies under PMSBY. So far, the bank has settled nearly 4,000 claims (₹80 crore) under PMJJBY and nearly 800 claims (₹16 crore) under PMSBY.

“This has helped poor families to lead life in the event of sudden death of the caretaker,” Gopi Krishna said. “The bank firmly believes that delivery of financial services at an affordable cost to the vast sections of the disadvantaged and low-income groups is a national priority.”

The bank has 10 regional offices in its service area of nine districts including Dharwad, Gadag, Haveri, Belagavi, Vijayapura, Bagalkot, Uttara Kannada, Udupi and Dakshina Kannada.

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Finmin pitches PM Jeevan Jyoti Bima Yojana again

Banking & Finance

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The Finance Ministry has re-energised its effort to get more people, especially from lower-income group and vulnerable sections, to enrol under the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), a low-cost life insurance scheme. But bankers are not very enthused about this effort.

“In these testing times, let’s take a step towards security. Subscribe to PMJJBY and secure the safety of your loved ones. Available to people in the age group 18 to 50 years with a bank account who give their consent to join/enable auto-debit of premium,” the Financial Services Department (DFS) said in a tweet.

Meanwhile, bankers are not very excited with the renewed thrust on the scheme as they feel this will put additional pressure on already overworked staff. Also, this could lead to crowding in bank branches.

“The government issues advisory, but it soon becomes a kind of important task for bank management. Who will have to work extra now? Besides, the staff available is in limited number as positive cases are here too,” a senior public sector bank official said on condition of anonymity. Another bank official was equally critical, saying how can one expect any additional work by bank staff at this moment.

Launched on May 9, 2015, the scheme offers a renewable one-year term life cover of ₹2 lakh to all subscribing bank account holders in the age group of 18 to 50 years. It covers death due to any reason, including suicide and murder. The rate of annual premium is ₹330 per subscriber. Life Insurance Corporation (LIC) administers the scheme. Anyone with a bank account in a Scheduled Commercial Bank can enrol for the scheme. She/he needs to give instructions regarding auto debit before May 31 every year. Cover is available for the period starting June 1 and ending on May 31.

 

Fear target pressure

Another bank official expressed fears that soon some target might be out and the need to achieve it in a given period of time.

“Our worst fear is crowding in any branch. Given security concerns, many people are still not very comfortable with using online banking and they prefer to visit the branch for any banking requirement. This could be so in the case of people willing to subscribe to a new insurance scheme,” he said.

As on April 28, the total number of subscribers under the scheme was 10.32 crore. The Finance Ministry also claimed that over 2.39 lakh claims have been settled since the inception of the scheme.

However, data as on March 31 shows that weekly enrolment has come down. For example, during the week starting March 17 and ending March 24, total enrolment was 4.91 lakh, which dropped to 3.60 lakh during the March 24-31 week.

However, Finance Ministry officials believe it that it is a temporary phase and things will improve.

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