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.

Introduction

In India, government-sponsored socially-oriented insurance schemes play a crucial role in promoting financial inclusion and providing social security to the vulnerable sections of society. These schemes are designed to protect individuals, especially from economically weaker sections, from unforeseen risks such as accidents, death, disability, and health-related issues. By ensuring that individuals have access to basic insurance coverage at affordable premiums, these schemes help reduce the financial vulnerability faced by marginalized communities. The two notable government-sponsored schemes in this regard are the Pradhan Mantri Suraksha

Bima Yojana (PMSBY) and Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY).

In this discussion, we will explore the salient features of both these schemes and assess their performance over the past two years, considering factors like enrollment trends, claims disbursed, and their impact on poverty reduction, social inclusion, and financial security.

1. Pradhan Mantri Suraksha Bima Yojana (PMSBY)

Salient Features of PMSBY

The Pradhan Mantri Suraksha Bima Yojana (PMSBY) was launched by the Government of India in May 2015, with the aim of providing accident insurance coverage to individuals belonging to economically weaker sections of society. The scheme is primarily intended to provide financial protection to low-income groups and informal sector workers, who may not have access to other forms of insurance.

Key Features:

·         Eligibility: The scheme is available to all Indian citizens between the ages of 18 and 70 who hold a valid savings bank account. The individual must provide consent to join the scheme and authorize the bank to deduct the premium directly from their account.

·         Coverage: The PMSBY offers the following types of coverage:

• Accidental Death Benefit: ₹2 lakh in case of accidental death.
• Permanent Total Disability Benefit: ₹2 lakh for permanent total disability due to an accident.
• Permanent Partial Disability Benefit: ₹1 lakh for permanent partial disability due to an accident.

·         Premium: The premium for the scheme is ₹12 annually (exclusive of taxes), making it one of the most affordable insurance products available. The premium is deducted automatically from the bank account, ensuring ease of payment.

·         Claim Process: The claims can be processed through the bank where the policyholder holds the account. In the event of a claim, the claimant or nominee submits necessary documentation, including medical reports, FIRs (First Information Reports), and other relevant details.

·         Beneficiary Support: The policyholder’s family is supported with financial assistance in case of the insured’s death or disability. This assistance is especially crucial for low-income families that may otherwise struggle with medical expenses and loss of income.

Performance of PMSBY in the Past Two Years

Over the last two years, the Pradhan Mantri Suraksha Bima Yojana (PMSBY) has played a crucial role in providing financial security to millions of individuals, particularly those in rural and underserved areas. Let's evaluate the key aspects of its performance in terms of enrollment, claims, and overall impact:

·         Enrollment Trends: As of recent reports, the enrollment for PMSBY has seen consistent growth. By 2023, more than 20 crore people were covered under PMSBY, and this number continues to increase as more people become aware of the scheme and its benefits. The scheme’s success lies in its affordability and the simplicity of enrolling through a savings bank account. The inclusion of lower-income groups and rural populations has been a significant achievement.

·         Claims Disbursed: During the past two years, PMSBY has witnessed a steady increase in claims disbursed. The scheme's claims are processed fairly quickly, with the financial support reaching the beneficiaries in a timely manner. For example, in 2023, over ₹1,000 crore was paid out in claims, primarily for accidental deaths and disabilities. This demonstrates the scheme's capacity to provide critical financial assistance when needed.

·         Social Impact: The implementation of PMSBY has had a significant impact on poverty reduction, particularly in reducing the economic vulnerability of lower-income families. In the case of death or disability due to an accident, the provision of ₹2 lakh (in case of total disability) or ₹1 lakh (in case of partial disability) has been a lifeline for many families. The scheme has helped prevent families from falling deeper into poverty and provided them with a means to cope with unexpected financial challenges.

·         COVID-19 Pandemic: During the pandemic, many people from the informal sector lost their livelihoods. The availability of PMSBY as a low-cost accident insurance plan provided essential financial security to those who were at risk of both economic and physical hardship. The continued accessibility of the scheme through bank accounts has played a vital role in protecting people during a time of heightened vulnerability.

Conclusion on PMSBY's Performance:

PMSBY has proven to be a successful and valuable tool in providing accident insurance to low-income and vulnerable populations. Its simplicity, low-cost premiums, and ease of enrollment have made it a model for other social insurance schemes. In the last two years, the scheme has demonstrated its capacity to provide critical support to families, helping them recover from the financial shocks caused by accidents. The scheme continues to have a positive impact on financial inclusion, poverty reduction, and social protection.

2. Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)

Salient Features of PMJJBY

The Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) is another important government-sponsored insurance scheme introduced by the Government of India in 2015. This life insurance scheme is aimed at providing affordable life coverage to the economically weaker sections of society. Like PMSBY, PMJJBY is designed to ensure that even the poorest individuals have access to basic life insurance protection.

Key Features:

·         Eligibility: PMJJBY is available to Indian citizens between the ages of 18 and 50 years who have a savings bank account. The person must also provide consent to join the scheme and authorize the premium to be deducted from their account. The policyholder must also declare their health status to qualify for the scheme.

·         Coverage: PMJJBY offers life insurance coverage of ₹2 lakh in case of death due to any reason, including natural causes, accidents, or illnesses. The scheme is designed to provide financial protection to the policyholder’s family in case of untimely death.

·         Premium: The premium for PMJJBY is ₹330 annually, which is deducted automatically from the policyholder’s bank account. This low premium ensures that individuals from low-income groups can afford the coverage without financial strain.

·         Claim Process: In the event of the policyholder’s death, the nominee is required to submit a claim to the bank, accompanied by the death certificate and other necessary documents. The claim process is designed to be straightforward, ensuring that beneficiaries can quickly access the insurance payout.

·         Beneficiary Support: The ₹2 lakh sum assured provides significant financial support to the family of the deceased. For many low-income families, this amount can help cover funeral expenses, pay off debts, and provide some level of economic stability in the face of loss.

Performance of PMJJBY in the Past Two Years

Over the last two years, PMJJBY has made considerable strides in increasing its coverage and reaching out to vulnerable populations. Let's assess its performance:

·         Enrollment Trends: As of 2023, more than 10 crore people were enrolled in PMJJBY, and the numbers continue to rise. The ease of enrollment through bank accounts, along with the relatively low premium, has contributed to the widespread adoption of the scheme. Banks and financial institutions have also played a key role in promoting the scheme and making it more accessible to rural populations.

·         Claims Disbursed: PMJJBY has seen a steady rise in claims disbursed over the last two years. The scheme's simple and transparent claims process ensures that the beneficiaries receive the benefits quickly. In 2023, over ₹20,000 crore was paid out in claims, demonstrating the scheme’s wide reach and its importance in providing financial protection to families in times of need.

·         Social Impact: PMJJBY has played a critical role in reducing the financial burden on families in case of untimely death, particularly in lower-income communities. The provision of ₹2 lakh in case of death can make a significant difference, helping families cover expenses such as medical bills, debts, and daily living costs. This financial assistance helps prevent families from falling deeper into poverty due to the sudden loss of a breadwinner.

·         COVID-19 Pandemic: The COVID-19 pandemic further highlighted the importance of PMJJBY, as many individuals faced increased health risks and, unfortunately, death due to the virus. PMJJBY’s coverage of ₹2 lakh per death provided crucial financial relief to the families of individuals who succumbed to the virus. The scheme ensured that even in the face of a global health crisis, low-income families could access some financial protection.

Conclusion on PMJJBY's Performance:

The Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) has shown strong performance over the past two years, particularly in terms of increasing enrollment and providing significant financial protection to families in case of death. Its low-cost premiums and easy accessibility have made it an attractive option for individuals who might not otherwise have access to life insurance. The scheme’s impact on poverty reduction, financial security, and social inclusion is undeniable, as it provides a safety net for vulnerable families during times of loss and hardship.

Conclusion:

Both Pradhan Mantri Suraksha Bima Yojana (PMSBY) and Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) have emerged as crucial pillars of India’s social security framework, aimed at improving the financial protection available to economically weaker sections of society. Their low-cost premiums, ease of enrollment, and extensive coverage have ensured that millions of individuals from marginalized communities can access vital insurance benefits, thereby reducing poverty, inequality, and financial vulnerability.

Over the past two years, both schemes have performed well in terms of enrollment growth, claims disbursed, and social impact. They have significantly contributed to reducing the financial burdens of families facing accidental deaths, disabilities, and untimely loss of a breadwinner. These schemes have demonstrated the importance of inclusive insurance programs in building financial resilience, fostering social inclusion, and mitigating poverty in a country as diverse as India.

As India continues to push for greater financial inclusion, the success of schemes like PMSBY and PMJJBY will be essential in ensuring that no one is left behind in the journey toward economic stability and social welfare.

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