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IRDAI eases capital requirement for PMJJBY to bring in more insurers

  • Category
    Economy
  • Published
    14th Jun, 2022

Context

The Insurance Regulatory and Development Authority of India (IRDAI) recently relaxed capital requirement norms significantly for insurers to encourage their participation in the government’s flagship programme Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY).

About

Key Points:

  • The government has recently hiked the premium rates for the two flagship schemes – PMJJBY and Pradhan Mantri Suraksha Bima Yojana (PMSBY) — to make these schemes economically viable.
  • The premium for PMJJBY has been increased from Rs 330 to Rs 436 annually effective June 1.
  • The premium for PMSBY has been increased from Rs. 12 to Rs. 20
  • The premium rate of PMJJBY has been revised upward to Rs 1.25 per day.

Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY):

  • The PMJJBY is available to people in the age group of 18 to 50 years having a bank account who give their consent to join / enable auto-debit. Aadhar would be the primary KYC for the bank account.
  • Risk coverage under this scheme is for Rs. 2 Lakh in case of death of the insured, due to any reason.
  • The premium is Rs. 330 per annum (Now revised to Rs. 436) which is to be auto-debited in one instalment from the subscriber's bank account as per the option given by him.
  • The scheme is being offered by Life Insurance Corporation and all other life insurers who are willing to offer the product on similar terms with necessary approvals and tie up with banks for this purpose.
  • Performance:
    • The number of active subscribers enrolled under the PMJJBY was 6.4 crore as of March 31, 2022.
    • An amount of Rs 9,737 crore has been collected by the implementing insurers towards premium and claims of Rs 14,144 crore have been paid under the PMJJBY as of March 31, 2022.

Pradhan Mantri Suraksha BimaYojana (PMSBY):

  • The Scheme is available to people in the age group 18 to 70 years with a bank account.
  • Aadhar would be the primary KYC for the bank account.
  • The risk coverage under the scheme is Rs. 2 lakh for accidental death and full disability and Rs. 1 lakh for partial disability.
  • The premium of Rs. 12 per annum (Now revised to Rs. 20) is to be deducted from the account holder's bank account through 'auto-debit' facility in one instalment.
  • The scheme is being offered by Public Sector General Insurance Companies or any other General Insurance Company who are willing to offer the product on similar terms with necessary approvals and tie up with banks for this purpose.

Insurance Regulatory and Development Authority of India (IRDAI)

  • It is an autonomous, statutory body tasked with regulating and promoting the insurance and re-insurance industries in India.
  • It was constituted by the Insurance Regulatory and Development Authority Act, 1999, an Act of Parliament passed by the Government of India.
  • IRDAI is a 10-member body including the chairman, five full-time and four part-time members appointed by the government of India.
  • It was created based on the recommendations of the Malhotra Committee.
  • Its headquarters is in Hyderabad.
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