The Insurance Regulatory and Development Authority of India has reduced the capital requirement under the Pradhan Mantri Jeevan Jyoti Bima Yojana by 50 per cent to encourage participation by more insurers in the government-backed life insurance scheme.
The Insurance Regulatory and Development Authority of India (IRDAI) has reduced the capital requirement under the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) to encourage participation by more insurers in the government-backed life insurance scheme.
The insurance regulator announced in a notification that the capital requirement to be held by insurers offering the government’s PMJJBY has been reduced by almost 50 per cent. With this, life insurers will be able to offer more policies under the scheme, and provide financial security to those at the bottommost layer of the Indian population, through life insurance.
The IRDAI’s recent step is expected to supplement the recent revision of premium rates by Government of India for its two flagship insurance schemes – the PMJJBY and Pradhan Mantri Suraksha Bima Yojana (PMSBY) to make these schemes economically viable.
The government has recently revised the premium rates of both PMJJBY and PMSBY from Rs 330 to Rs 436 and Rs 12 to Rs 20, respectively. The revised rates became effective from June 1, 2022. This was the first time in seven years since the launch of the schemes in 2015 that the rates have been revised.
The PMJJY was launched in May 2015 after then Minister of Finance had announced the same during his Budget Speech in Parliament in February of that year. Anybody between 18 and 50 years of age with a bank account can apply to PMJJBY.
The insurance cover is for a period of one year from June 1 to May 31, and provides an option to join / pay by auto-debit from the designated savings bank account on the prescribed forms, which have to be summited by May 31 of every year, with the exception for the initial year. Those who register for the auto debit facility will have auto renewals up to the age of 55 years. That said, a person above the age of 50 cannot register in this scheme.
The benefits include a sum of Rs 2 lakh that is payable on the member’s death. At the time of its launch, the scheme was linked to bank accounts opened by the participants under the Pradhan Mantri Jan Dhan Yojana scheme. It was also mandatory for the participants to link their Aadhhar card to the participatory bank account in order to avail of the benefits offered by the scheme.