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.
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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