REVISED FAQs on PRADHAN MANTRI JEEVAN JYOTI BIMA YOJANA
(PMJJBY) (FOR POLICY YEAR 2016-17)
Q1. What is the nature of the scheme?
The scheme is a one year cover Term Life Insurance Scheme, renewable from year to
year, offering life insurance cover for death due to any cause.
Q2. What would be the benefits under the scheme and premium payable?
Rs.2 lakh is payable on a subscriber’s death due to any cause. The premium payable is
Rs.330/- per annum per subscriber.
Q3. How will the premium be paid?
The premium will be deducted from the account holder’s bank account through ‘auto
debit’ facility in one instalment, as per the consent to be given on enrolment.
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.
Q4. Who will offer / administer the scheme?
The scheme would be offered / administered through LIC and other Life Insurance
companies willing to offer the product with necessary approvals on similar terms, in
collaboration with participating Banks. Participating banks are free to engage any
such life insurance company for implementing the scheme for their subscribers.
Q5. Who will be eligible to subscribe?
All individual (single or joint) bank account holders in the age 18 to 50 years in
participating banks will be entitled to join. In case of multiple bank accounts held by
an individual in one or different banks, the person would be eligible to join the
scheme through one bank account only.
Q6. What is the enrolment period and modality?
Initially on launch for the cover period from 1st June 2015 to 31st May 2016
subscribers were expected to enrol and give their auto-debit option by 31st May 2015,
which was extended up to 31st May 2016. Subscribers who wish to continue beyond
the first year will be expected to give their consent for auto-debit before each
successive May 31st for successive years. Delayed renewal subsequent to this date
will be possible on payment of full annual premium subject to changes in terms
regarding insurance coverage.
BUY SAMSUNG EARPHONE @ JUST RS.199.
Q7. What are the changes in the terms of insurance coverage applicable to new
subscribers in the year 2016-17?
For subscribers enrolling for the first time on or after 01st June 2016, insurance
benefit shall not be available for death (due to any cause other than accident)
occurring during the first 45 days from the date of enrolment into the scheme,. Death
due to accidental causes will be covered from day one of insurance coverage.
Q8. Can eligible individuals who fail to join the scheme in the initial year join in
subsequent years?
Yes, on payment of premium through auto-debit. New eligible entrants in future years
can also join accordingly. However, for such subscribers, insurance benefit shall not
be available for death (due to any cause other than accident) occurring during the
first 45 days from the date of enrolment into the scheme,..
Q9. Can individuals who leave the scheme re-join?
Individuals who exit the scheme at any point may re-join the scheme in future years
by paying the annual premium. However, for such subscribers, insurance benefit
shall not be available for death (due to any cause other than accident) occurring
during the first 45 days from the date of enrolment into the scheme
Q10. Who would be the Master policy holder for the scheme?
Participating Banks will be the Master policy holders. A simple and subscriber
friendly administration & claim settlement process has been finalized by LIC / chosen
insurance company in consultation with the participating bank.
Q11. When can the assurance on life of the member terminate?
The assurance on the life of the member shall terminate / be restricted accordingly on
any of the following events: i. On attaining age 55 years (age near birth day), subject
to annual renewal up to that date (entry, however, will not be possible beyond the age
of 50 years). ii. Closure of account with the Bank or insufficiency of balance to keep
the insurance in force. iii. In case a member is covered through more than one account
and premium is received by LIC / insurance company inadvertently, insurance cover
will be restricted to Rs. 2 Lakh and the premium paid for duplicate insurance(s) shall
be liable to be forfeited.
Q12. What will be the role of the insurance company and the Bank?.
The scheme will be administered by LIC or any other Life Insurance company which
is willing to offer such a product in partnership with a bank / banks. ii. It will be the
responsibility of the participating bank to recover the appropriate annual premium in
one instalment, as per the option, from the account holders on or before the due date
through ‘auto-debit’ process and transfer the amount due to the insurance company.
iii. Enrolment form / Auto-debit authorization / Consent cum Declaration form in the
prescribed proforma, as required, shall be obtained and retained by the participating
bank. In case of claim, LIC / insurance company may seek submission of the same.
LIC / Insurance Company also reserve the right to call for these documents at any
point of time.
Q13. How would the premium be appropriated?
a. Insurance Premium to LIC /other insurance company: Rs.289/- per annum per
member;
b. Reimbursement of Expenses to BC/Micro/Corporate/Agent: Rs.30/- per annum per
member;c. Reimbursement of Administrative expenses to participating Bank: Rs.11/- per
annum per member.
Q14. Will this cover be in addition to cover under any other insurance scheme
the subscriber may be covered under?
Yes.
Q15. Can all holders of a joint bank account join the scheme through the said account?
In case of a joint account, all holders of the said account can join the scheme provided
they satisfy its eligibility criteria and pay the premium at the rate of Rs.330 per person
per annum.
Q16. Are NRIs eligible for coverage under PMJJBY?
Any NRI having an eligible bank account with a bank branch located in India is
eligible for purchase of PMJJBY cover subject to fulfilment of the terms and
conditions relating to the scheme. However, in case a claim arises, the claim benefit
will be paid to the beneficiary/ nominee only in Indian currency.
Q17. Which Bank Accounts are eligible for subscribing to PMJJBY?
All bank account holders other than institutional account holders are eligible for
subscribing to PMJJBY scheme.
Q18. Does the PMJJBY cover death resulting from natural calamities such as
earthquake, flood and other convulsions of nature? What about coverage from
suicide / murder?
All these events are covered as PMJJBY covers death due to any reason.
Q19. Are PMJJBY policies being introduced and serviced in association with
foreign insurance Companies?
There are no foreign insurance Companies directly operating in India. As permitted by
the Insurance Act and IRDA Regulations there are some foreign Companies in joint
ventures with Indian companies, where the stake of foreign insurers is restricted to
49% only.
Q.20. Contrary to other Life Insurance products, benefit under PMJJBY is
payable only to nominee of the insured on the death of the insured. Why is there
no maturity benefit or surrender value, which is available in normal life
insurance policies?
The cover under PMJJBY is for death only and hence benefit will accrue only to
nominee. PMJJBY is a pure term insurance policy, which covers only mortality with
no investment component. The pricing is also accordingly low when compared to
other life insurance policies where maturity benefits, surrender value etc.is available.
It has been designed to provide life insurance cover to weaker sections of the society.
With this aim, the premium is kept low, eliminating the investment component.
Q.21. Will the PMJJBY scheme which is being promoted aggressively and sold in
large numbers accrue huge profits to the foreign insurance Companies who in
joint venture with Indian entities have floated life insurance companies and are
operating this insurance cover?
Only Indian Insurance Companies as defined in the Insurance Act can operate in
India. The policy holders’ funds of all such insurance companies operating in India
including those with foreign partners within the 49% cap are to be invested in India as
per regulations and cannot be invested abroad. The premium charged for PMJJBY has
been worked out based on actuarial calculations taking into account all risk factors,
current mortality rates and adverse selection. Thus there is no scope for any huge
profits accruing from the scheme.
Q.22. Why are foreign insurance Companies associated with PMJJBY when LIC
which is a government owned corporation could have managed this scheme
launched by the government?
There are 24 Life insurance companies operating in India, who are licensed by IRDAI
to carry on life insurance business in India. To promote competition and better pricing
and service to customers, all these companies are permitted to participate. Moreover,
they are all Indian insurance companies. Their foreign partners, if any, have only a
stake in these companies within the stipulated 49% cap. However, LIC is still the
primary insurer involved in operation of the scheme.
Q.23. In case of non-settlement of claims is it possible to proceed legally against
the foreign insurers in India?
There are no foreign insurance Companies directly operating in India. As permitted by
the regulations there are Companies operating as joint ventures with Indian
companies, where the stake of foreign insurers is restricted to 49% only. By
definition, these are Indian insurance companies. All these companies are subject to
Indian laws and there is no bar against proceeding legally against them.
Q.24. Rates of premium may be increased, or the Companies may discontinue the
schemes in future.
Insurance is like any other product. While rates can go up in future, with 24 life
insurance Companies operating in India, due to competition among them, prices are
likely to remain stable. It is expected that with the design of the PMJJBY cover and
it’s pricing, the scheme will be viable, and there is little chance of discontinuing. In
any event, even if a particular company discontinues, banks have several other options
to tie up with.
*************