PM Suraksha Bima Yojana (PMSBY) – 15 Must Know Facts

Pradhan Mantri Suraksha Bima Yojana (PMSBY) is another Govt. scheme launched recently by Govt. of India. This is an insurance policy which will provide Accidental Death Insurance to poor or lower class under-privileged people.

Insurance is a must for every individual and in a country like India where most people are under-privileged it is very tough to cover everything under life cover. To meet that target PMSBY or PM Suraksha Bima Yojana has been launched.

Govt. is expecting to provide a minimum death cover for every individual with this PM Suraksha Bima Yojana (PMSBY). I am not reviewing PMSBY here, rather sharing few key highlights of this policy. This is a very good initiative by Govt. of India. Gradually we will be able to know the good and bad points of this plan.

PM Suraksha Bima Yojana (PMSBY) – Key Features

Another insurance plan Pradhan Mantri Jeevan Jyoti Bima Yojana was launched with this plan.There are few key differences between these 2 insurance plans from Govt. of India. But one common thing is they will target the poor or lower middle class category in our society who can not afford to buy life insurance. Another social security scheme Atal Pension Yojana for pension coverage of the unorganised sector was also launched along with these two. You can check out that plan here. Few key highlights of this PM Suraksha Bima Yojana (PMSBY) are:

1. Insurance Benefits: PMSBY scheme covers the insurance coverage of an individual’s accidental disablement and death owing to accidental injury. PMSBY covers the below disabilities/accidental injuries:

  • Total and irrecoverable loss of sight of one eye or loss of use of one hand or foot  – Rs.1 lakh 
  • In case of Death due to accidental injury/Total and irrecoverable loss of both eyes or loss of use of both hands or feet or loss of sight of one eye and loss of use of hand or foot – Rs.2 lakhs

PM Suraksha Bima Yojana (PMSBY)

2. Eligibility: Any Indian citizen within the given age group can join this scheme provided they have a savings bank account. The person needs a bank account linked with Aadhaar number. In case a person holds multiple savings bank accounts in one or different banks, the person can join the scheme only through one savings bank account.

3. Age Limit: People between the age of 18-70 years can subscribe to this policy.

4. Documents needed: As of now, Aadhaar is the primary KYC for the bank account. A copy of the person’s Aadhaar card will be enough to subscribe.

5. Due Date of Enrolment: At the time of launching, the cover period is given from 1st June 2015 to 31st May 2016. Subscribers can opt for an auto-debit option before May 31st for each successive years if they wish to continue the scheme beyond the first year. Every year before 1st June one can visit the respective bank and apply for new Suraksha Bima Yojana scheme.

PMSBY Premium Details

6. Amount of Premium: The Suraksha Bima Yojana insurance premium will be Rs 12 per year, i.e. Rs. 1 per month. This is really strange and we have to wait to see how much response this life cover provided @ just Rs 1 / month will receive.

7. Government Contribution: Govt. will pay the extra expenses apart from the premium contribution. Other ministries can co-contribute towards the premium of the beneficiaries. The contribution amount will be decided from the Public Welfare Fund created from any unclaimed money in the budget on yearly basis.

8. Terms of Coverage: While opening PM Suraksha Bima Yojana (PMSBY) one can choose the term as self-renewal & can renew the scheme every year before 1st June. One can also opt for a long-term option. Bank will auto-debit annual premium in case long-term risk coverage is chosen.

9. Rejoining the Scheme: If someone exits the scheme at any point of time, he/she can re-join the scheme in future years. For that the individual needs to pay the annual premium, subject to the conditions that may be laid down.

10. Payment Mode: Premium amount will be auto-debited from the respective bank account. Similarly in the case of PMJJBY & APY, no other option is available as of now.

Tax Benefits & Scheme Providers of PMSBY

11. Income Tax Benefits: The entire premium paid will be tax-free under section 80C. The proceeds amount will get tax-exemption under section 10(10D). For all the proceeds from insurance policy exceeding Rs.1 lakh, TDS from the total proceeds will be deducted at the rate of 2% if Form 15G or Form 15H is not submitted to the insuring agency.

12. Implementation Agencies: The Suraksha Bima Yojana will be implemented by all the public sector general insurance companies such as National Insurance Company, New India Assurance Company, The Oriental Insurance Co. and United India Insurance Co. Options has been provided to other insurance companies to join this scheme by tying up with banks.

Other Details of Suraksha Bima Yojana

13. Nomination Facility: Nomination facility is available for PMSBY. Nominee details with relationship should be provided in the form while applying.

14. Master Policy Holder: On behalf of the subscriber, the participating bank will be the Master policy holder. The respective general insurance company will finalize an easy subscriber friendly administration & claim settlement process after consulting with the banks.

15. Termination of the Coverage: The accident cover will be terminated on any of the following events.

  • On attaining the age of 70 years (age nearest birth day).
  • Closure of account with the Bank for insufficiency of balance to keep the insurance active.
  • In case the member is covered under more than one account and unconsciously premium is received by the Insurance Company, insurance cover will be restricted to only one such account and the premium will be liable to be forfeited.
  • If the insurance cover is stopped due to any technical reasons such as insufficient balance on due date or due to any administrative issues, the same can be restored on receipt of full annual premium. The risk cover will be suspended during this period and respective insurance company will solely decide the restoration of the risk cover.

You can read the Suraksha Bima Yojana in Hindi here.

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Did PM Suraksha Bima Yojana Premium Rates Shocked You?

This is really shocking so far how Suraksha Bima Yojana will be able to survive in long term with such a token premium rate. When Govt. is planning to secure life for the poor people, Govt. also know that the mortality rate is very high for those category of people due to not able to maintain a healthy life. Even this is also a question how private insurance players consider this scheme. Again it is too early to expect these answers, we may know more about this PM Suraksha Bima Yojana next year around this time.

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  1. Ate these schemes being operated by banks in the private sector like Yes Bank or only Public Sector Banks like SBI, PNB, P&S
    Please advise

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