PMJJBY - (PRADHAN MANTRI JEEVAN JYOTI BIMA YOJANA)
PMJJBY - (PRADHAN MANTRI JEEVAN JYOTI BIMA YOJANA)
|Full Annual Premium
of Rs.436/- collected
|Rs.342/- collected in the
2nd quarter of risk Period
|Rs.228/- collected in the
3rd quarter of risk period
|Rs.114/- is collected in the
4th quarter of risk period
to LIC/ Insurance Company
|2||Commission payable to
Business Correspondents, agents, etc. (For new enrolments only)
|3||Administrative Expenses payable to participating Banks||Rs.11/-||Rs.10.50||Rs.7/-||Rs.3.50|
Note: The amount of commission payable to Business Correspondents, agents, etc. as specified in item (2) saved in case of voluntary enrolment by an accountholder through electronic means shall be passed on as a benefit to the subscriber by correspondingly reducing the amount of the Insurance Premium payable specified above.
Q13. Will this cover be in addition to cover under any other insurance scheme the subscriber may be covered under?
Q14. Can all holders of a joint bank account join the scheme through the said account?
In case of a joint account, all holders of the said account can join the scheme provided they satisfy its eligibility criteria and pay the appropriate premium as described in reply to Q. 2 above.
Q15. Are NRIs eligible for coverage under PMJJBY?
Any NRI having an eligible bank account with a bank branch located in India is eligible for purchase of PMJJBY cover subject to fulfilment of the terms and conditions relating to the scheme. However, in case a claim arises, the claim benefit will be paid to the beneficiary/ nominee only in Indian currency.
Q16. Which Bank Accounts are eligible for subscribing to PMJJBY?
All bank account holders other than institutional account holders are eligible for subscribing to PMJJBY scheme.
Q17. Does the PMJJBY cover death resulting from natural calamities such as earthquake, flood and other convulsions of nature? What about coverage from suicide / murder?
All these events are covered as PMJJBY covers death due to any reason.
Q18. Are PMJJBY policies being introduced and serviced in association with foreign insurance Companies?
There are no foreign insurance Companies directly operating in India. As permitted by the Insurance Act and IRDAI regulations there are some foreign Companies in joint ventures with Indian companies, where the stake of foreign insurers is restricted to 74% only.
Q.19. Contrary to other life insurance products, benefit under PMJJBY is payable only to nominee of the insured on the death of the insured. Why is there no maturity benefit or surrender value, which is available in normal life insurance policies?
The cover under PMJJBY is for death only and hence benefit will accrue only to nominee. PMJJBY is a pure term insurance policy, which covers only mortality with no investment component. The pricing is also accordingly low when compared to other life insurance policies where maturity benefits, surrender value etc. are available. It has been designed to provide life insurance cover to the weaker sections of the society. With this aim, the premium is kept low, eliminating the investment component.
Q.20. Will the PMJJBY scheme which is being promoted aggressively and sold in large numbers accrue huge profits to the foreign insurance Companies who in joint venture with Indian entities have floated life insurance companies and are operating this insurance cover?
Only Indian Insurance Companies as defined in the Insurance Act can operate in India. The policy holders’ funds of all such insurance companies operating in India including those with foreign partners within the 74% cap is to be invested in India as per regulations and cannot be invested abroad. The premium charged for PMJJBY has been worked out based on actuarial calculations considering all risk factors, current mortality rates and adverse selection. Thus, there is no scope for any huge profits accruing from the scheme.
Q.21. Why are foreign insurance Companies associated with PMJJBY when LIC which is a government owned corporation could have managed this scheme launched by the government?
There are 24 Life insurance companies operating in India, who are licensed by IRDAI to carry on life insurance business in India. To promote competition and better pricing and service to customers, all these companies are permitted to participate. Moreover, they are all Indian insurance companies. Their foreign partners, if any, have only a stake in these companies within the stipulated 74% cap. However, LIC is still the primary insurer involved in operation of the scheme.
Q.22. In case of non-settlement of claims is it possible to proceed legally against the foreign insurers in India?
There are no foreign insurance Companies directly operating in India. As permitted by the regulations there are Companies operating as joint ventures with Indian companies, where the stake of foreign insurers is restricted to 74% only. By definition, these are Indian insurance companies. All these companies are subject to Indian laws and there is no bar against proceeding legally against them.
Q.23. Rates of premium may be increased, or the Companies may discontinue the schemes in future.
Insurance is like any other product. While rates can go up in future, with 24 life insurance Companies operating in India, due to competition among them, prices are likely to remain stable. It is expected that with the design of the PMJJBY cover and it’s pricing, the scheme will be viable, and there is little chance of discontinuing. In any event, even if a particular company discontinues, banks have several other options to tie up with.