Take any two Government Sponsored Socially Oriented Insurance Schemes and discuss the salient features of these schemes. Also discuss the performance of these schemes in the past 2 years.

 Q. Take any two Government Sponsored Socially Oriented Insurance Schemes and discuss the salient features of these schemes. Also discuss the performance of these schemes in the past 2 years.

Government-sponsored socially oriented insurance schemes are designed to provide financial protection to marginalized and economically disadvantaged sections of society. These schemes focus on ensuring that the most vulnerable populations, such as low-income families, rural inhabitants, and informal sector workers, have access to insurance coverage. Two prominent examples of such government-backed insurance schemes in India are the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and the Pradhan Mantri Suraksha Bima Yojana (PMSBY). Both of these schemes are designed to offer life and accident insurance coverage to the economically weaker sections at minimal cost, contributing to social welfare, poverty reduction, and financial inclusion.

1. Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)

The Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) is a government-sponsored life insurance scheme that aims to provide financial security to the economically weaker sections of society, particularly those with limited access to traditional insurance products. The scheme was launched by the Government of India in May 2015 and is administered by public and private sector insurers. It offers affordable life insurance cover to individuals in the age group of 18 to 50 years, ensuring that they and their families are protected against unforeseen events.

Salient Features of PMJJBY

Eligibility Criteria:

o    The scheme is open to Indian citizens aged between 18 and 50 years who hold a valid bank account. The scheme is available to both rural and urban populations, making it accessible to a wide spectrum of society.

o    Enrollment is typically done through participating banks, which are responsible for the distribution and administration of the scheme.

Insurance Coverage and Sum Assured:

PMJJBY provides a life insurance cover of ₹2 lakh in the event of the policyholder's death, regardless of the cause. This sum assured is a significant financial cushion, especially for low-income families that may otherwise lack access to insurance.

The sum is paid to the nominee or legal heir of the policyholder, ensuring financial support to the family in case of untimely death.

Premium Payment:

One of the key features of PMJJBY is its affordability. The premium for the entire year is ₹330, which is significantly lower than the premiums of traditional life insurance policies.

Premium payments are automatically deducted from the policyholder’s linked bank account, ensuring timely payment and reducing the risk of the policy lapsing due to non-payment.

Renewal Process:

PMJJBY is a renewable annual scheme. The policyholder must ensure that the premium is paid every year for the policy to remain active. The automatic deduction system makes renewal hassle-free.

Claims Process:

The claims process is simple and transparent. In the event of the policyholder's death, the nominee can approach the bank to file a claim. The bank, in turn, processes the claim and disburses the amount directly to the beneficiary. This quick and efficient claims process ensures that the family members of the deceased receive financial support without unnecessary delays.

Rural and Urban Coverage:

PMJJBY is designed to be inclusive, ensuring that people from both rural and urban areas are covered. This feature is essential for rural India, where access to financial services is often limited, and life insurance penetration is low.

Financial Inclusion:

By linking the scheme to savings accounts in banks, PMJJBY promotes financial inclusion. The scheme ensures that individuals from lower-income segments, who may not be able to access regular insurance products, are covered under a simple and affordable life insurance scheme.

Performance of PMJJBY in the Past Two Years

Over the past two years, the PMJJBY has made significant strides in terms of enrollment and claim settlements. Despite the challenges posed by the COVID-19 pandemic, the scheme has demonstrated resilience and success in reaching the economically vulnerable segments of society.

·         Enrollment Growth: As of recent data, the number of enrollments in PMJJBY has seen steady growth. In the last two years, millions of new enrollees have joined the scheme, thanks to increased awareness and outreach efforts by the government and participating banks. During the COVID-19 pandemic, the government leveraged digital banking platforms to reach remote areas, leading to an increase in enrollments, especially among the rural poor.

·         Claims and Settlements: The performance of the scheme in terms of claim settlements has been commendable. During the COVID-19 pandemic, many claimants were able to access the benefits of PMJJBY, which provided much-needed financial support to families who lost their loved ones due to the virus. The simplicity and speed of the claims process ensured that the families received their dues without significant delays.

·         Awareness Campaigns: The government has been actively promoting PMJJBY through various media and campaigns, which has led to increased awareness and participation. However, there is still room for improvement in terms of outreach to remote rural areas and under-served communities.

2. Pradhan Mantri Suraksha Bima Yojana (PMSBY)

The Pradhan Mantri Suraksha Bima Yojana (PMSBY) is another government-backed insurance scheme that provides accident insurance coverage to individuals, particularly those who belong to low-income groups. It was launched by the Government of India in May 2015, simultaneously with PMJJBY, and has been a crucial component of the government’s efforts to improve financial inclusion and provide social security to the masses.

Salient Features of PMSBY

Eligibility Criteria:

PMSBY is available to Indian citizens aged between 18 and 70 years, with the requirement that the individual must have a savings bank account. There is no restriction based on income or social status, making it accessible to all.

The scheme is offered by public and private sector banks, which act as intermediaries for enrollment.

Insurance Coverage and Sum Assured:

PMSBY offers an accident insurance cover of ₹2 lakh in the event of death or permanent disability due to an accident. In case of partial disability, the sum assured is ₹1 lakh.

The coverage is comprehensive, including accidental death, permanent total disability, and permanent partial disability.

Premium Payment:

The premium for PMSBY is ₹12 per year, making it highly affordable for individuals from economically weaker sections.

Like PMJJBY, the premium is automatically deducted from the policyholder's bank account, ensuring timely payment and seamless participation.

Claims Process:

The claims process under PMSBY is straightforward. In case of an accident, the claimant or their family can file a claim with the bank. The process is simple, with minimum documentation required.

The bank directly settles the claim, ensuring that the beneficiary receives the amount quickly. The low-cost nature of the scheme ensures that it reaches the economically disadvantaged groups who might otherwise be unable to afford accident insurance.

Rural and Urban Coverage:

PMSBY is available to both rural and urban populations, ensuring that the benefits reach people in all parts of India. The scheme's implementation through banks, including those in rural areas, allows for better outreach and coverage.

Financial Inclusion:

PMSBY has played a significant role in promoting financial inclusion. With its very low premium and easy accessibility through savings accounts, the scheme has reached millions of low-income individuals, including those in remote areas, and has provided them with accident insurance coverage.

Performance of PMSBY in the Past Two Years

In the past two years, PMSBY has seen impressive growth in terms of enrollment and claims settlement. The COVID-19 pandemic, which led to a surge in road accidents and the need for financial protection, has highlighted the importance of such schemes.

·         Enrollment Growth: PMSBY has gained significant traction, especially among the rural and informal sector workers. Millions of new individuals enrolled in the scheme during the pandemic, as awareness about the importance of accident insurance increased. The scheme's accessibility through bank accounts and its extremely low premium contributed to its widespread adoption.

·         Claims and Settlements: PMSBY has witnessed a steady rise in claims, particularly due to the increase in road accidents and other unforeseen accidents during the pandemic. The ease and speed with which claims are processed have been a major factor in the scheme’s success. Beneficiaries have expressed satisfaction with the swift and hassle-free claims process, which has been essential during the challenging times of the pandemic.

·         Awareness Campaigns: Government efforts to raise awareness about PMSBY, including campaigns through banks and digital platforms, have helped boost enrollment rates. However, there are still challenges in reaching remote and underserved populations, especially in the northeastern states and tribal areas.

Conclusion

The Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and the Pradhan Mantri Suraksha Bima Yojana (PMSBY) are two cornerstone government-sponsored insurance schemes that have played a pivotal role in providing financial protection to economically vulnerable populations in India. These schemes have made life and accident insurance affordable and accessible to millions of individuals who would otherwise be excluded from traditional insurance products. Over the past two years, both schemes have demonstrated remarkable growth in terms of enrollments and claims settlements, particularly during the challenging period of the COVID-19 pandemic. While there are still challenges in terms of outreach and awareness, the performance of these schemes has shown that they are effective tools in promoting financial inclusion, reducing poverty and inequality, and providing financial security to the underserved sections of society. With continued government support and improved outreach efforts, these schemes have the potential to further expand and offer even greater benefits to the population.

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