Life insurance is not only one of the most effective ways to secure a family’s financial future, but also a ray of hope when you are not around.  The Indian government has introduced a range of affordable life insurance schemes designed for people from every walk of society, particularly households with a lower income range. These Government life insurance schemes in India offer low premiums, all-encompassing coverage, and dependable support for millions of Indians.

Here's a guide to India’s top government-backed life insurance plans, their plus points, and how to avail of government insurance schemes. Let's read on!

How Government Life Insurance Schemes Bridge the Insurance Gap in India?

In India, insurance is often taken for granted. Sometimes, due to a lack of awareness, sometimes because of affordability concerns, and at times because people mistakenly believe it is not necessary. However, this void, unfortunately, leaves families vulnerable when something happens to the sole breadwinner.

Therefore, the government of India has come up with several schemes. These policies are designed to encourage financial inclusion and ensure even the most economically deprived section of society has access to life and accident coverage.

The highlights of these policies include:

  • Lower premiums to make insurance benefits available to all.
  • Simple enrollment processes to remove all the related hassles.
  • Wide coverage to ensure sufficient financial security in case of the sudden demise of the policyholder.

Popular Life Insurance Schemes by the Government

Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)

  • Eligibility: Anyone who is between 18 and 50 years of age and holds an individual bank account can subscribe to PMJJBY.
  • Coverage: It offers INR 2 lakh to the nominee, regardless of the cause of the demise of the policyholder.
  • Policy Term: 1 year
  • Premium: INR 436 per annum

Pradhan Mantri Suraksha Bima Yojana (PMSBY)

Eligibility: Anyone between 18 and 70 years of age can apply, with an individual bank account.
Coverage: Get coverage upto 2 Lakh in case of accidental death of total disability. If its partial disability, then the policyholder will get a coverage of 1 Lakh.
Policy Term: 1 year
Premium: INR 20 per annum

Aam Aadmi Bima Yojana (AABY)

Eligibility: Any individual between the ages of 18 and 59 years can sign up for AABY. Other criteria include  - the applicant should primarily belong to a rural landless household under the BPL (below poverty line) or slightly above the poverty line category.
Coverage: It offers INR 30,000 for natural death, INR 75,000 for accidental death benefit, INR 75,000 for total and INR 37,500 for partial disability. It also offers scholarship benefits for kids (policyholders) in classes 9 to 12.
Policy Term: 1 year
Premium: INR 200 per annum (50% paid by the central government)

Points to Remember!

The Indian Ministry of Finance has merged Aam Admi Bima Yojana (AABY) and Janashree Bima Yojana (JBY), effective from January 1, 2013. Reasons below -

  • To prevent the issuance of duplicate policies
  • To deliver seamless services to the financially vulnerable households

Postal Life Insurance (PLI)

  • Eligibility: Anyone who is an employee of the following organisations can apply - central government, defence Services, para-military forces, state government, local bodies, government-aided educational institutions, Reserve Bank of India, public sector undertakings (PSUs), financial institutions, nationalized banks, and autonomous bodies, among others.
  • Coverage: Up to INR 50 lakh
  • Premium: It depends on the Sum Insured and the applicant’s age.
  • Benefits: Multiple options to choose from, including Whole Life Assurance (Suraksha), Convertible Whole Life Assurance (Suvidha), Endowment Assurance (Santosh), Anticipated Endowment Assurance (Sumangal), Joint Life Assurance (Yugal Suraksha), and Children Policy (Bal Jeevan Bima). Loan facility available after a certain period

Rural Postal Life Insurance (RPLI)

  • Eligibility: Available to rural residents
  • Coverage Amount: Up to INR 10 lakh. A loan again policy is also available.
  • Premium: It depends on the Sum Insured and the applicant’s age.

PMVVY Pension Scheme (Pradhan Mantri Vaya Vandana Yojana)

Unlike the other schemes, the PMVVY pension scheme is aimed at senior citizens, focusing on pension and guaranteed returns rather than pure life cover.

  • Eligibility: Citizens aged 60 years and above.
  • Benefits: Assured pension benefit for 10 years. Pension amounts range from INR 1,000 per month to INR 10,000 per month, depending on investment.
  • Investment Limit: Maximum of INR 15 lakh. Managed by: Life Insurance Corporation of India (LIC).

How to Avail of Government Insurance Schemes?

Are you planning to enroll in these government schemes? The good news is that the process is pretty simple and can be done through multiple channels. Refer to the pointers below to get started:

  1. Check eligibility – Check your eligibility in the first place. Confirm if you meet the age and occupation criteria for the scheme you are interested in.
  2. Visit your bank – It is important to know that schemes, including PMJJBY and PMSBY, are linked to savings bank accounts. So, you can enrol at your bank by submitting a simple consent form along with your nominee’s details.
  3. Check with LIC or other insurers – If you intend to enrol in plans such as AABY, PMVVY, and JBY, you must know that these are managed by LIC and other partner insurers. So, you can get in touch with them at their offices or through authorised agents to proceed.
  4. Fill out the form – Provide your basic details, Aadhaar number, and nominee details. Make sure every information you furnish is accurate to avoid issues later.
  5. Premium payment – If you have signed up for PMJJBY and PMSBY, the premium will be auto-debited from your bank account every year. For other plans, you are most likely to need to pay it directly.
  6. Keep the documents handy – Always keep the documents in a safe place. You will need them if you ever need to make a claim.

Long Story Short!

Government life insurance schemes in India play an important role in promoting financial inclusion. These are carefully designed to protect families during difficult times and offer stability in old age. So, if you have been overlooking getting life insurance this long, now is the time to act. Always remember! This small step today can make a big difference tomorrow!

FAQs on government life insurance schemes

Can an NRI enroll in PMJJBY?

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Yes, if you open a bank account in India, you can definitely enroll in  Pradhan Mantri Jeevan Jyoti Bima Yojana.

If a PMJJBY subscriber passes away due to natural disasters or suicide, will it be covered?

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Yes, as already discussed, PMJJBY provides coverage for death due to any reason. It includes natural disasters like floods or earthquakes, suicide, and homicide.

I have missed enrollment in an earlier year. Can I still join PMJJBY later?

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Yes, as a new eligible individual, you can enroll in subsequent years by paying the required premium. However, a 30-day waiting period is likely to be applicable for death due to non-accidental causes.

Does AABY include health coverage?

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No, AABY only covers life and accidents. Health insurance must be taken separately.