Pradhan Mantri Suraksha Bima Yojana (PMSBY) – Key Highlights

Pradhan Mantri Suraksha Bima Yojana is another low-cost personal accident cover announced in the budget 2015-16.

PMSBY is introduced to increase the insurance penetration in the country along with Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY). Both PMSBY & PMJJBY are linked with the Pradhan Mantri Jhan Dhan Yojana.

Pradhan Mantri Suraksha Bima Yojana is an insurance policy which covers any accidental death or any kind of disability of the policyholder .

Pradhan Mantri Suraksha Bima Yojana – Benefits & Criterions

Eligibility: Any Indian citizen within the age group of 18 to 70 years with a bank account is eligible to avail this scheme. People who are interested to avail this scheme, needs to link their Aadhaar card with the bank account.

Premium Amount:  The premium amount  is for this scheme is yearly Rs.12 (Rs.1 per month).  It will get auto-debited in single instalment.

Risk Coverage: PMSBY covers two types of disabilities:

  • Rs.1 lakh for partial disability
  • Rs.2 lakhs in case of accidental death or full disability

Terms of Risk Coverage: One can avail the scheme in either of the below options:

  • The policy holder can renew the scheme every year before 1st June & continue to avail the coverage. The premium will be auto-debited once the form is submitted to the bank.
  • Or, the individual can also opt for a long-term option in the form. In case long-term risk coverage is chosen, every year the annual premium amount will be auto-debited by the banks.

Payment Mode for Premium:  Currently only one payment mode is available. Directly the bank will auto debit the premium from the policy holder’s account.

Nomination facility: Nomination facility is available for this scheme. Nominee name along with relationship can be given while applying.

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Documents Needed: As of now, a copy of the person’s Aadhar card is enough to subscribe to this scheme.

Who will implement: The Pradhan Mantri Suraksha Bima Yojana will be offered by all public sector general insurance companies like New India Assurance Company, National Insurance Company, The Oriental Insurance Co and United India Insurance Co . Other life insurance providers can join the scheme through tie-ups with banks.

Government Contribution: Government will bear any excess expenditure  apart from the individual’s premium contribution. Other ministries can also co-contribute premium for various categories of their beneficiaries. The contribution will be decided every year from the Public Welfare Fund created from any unclaimed money in the budget.

Termination of the Coverage: The accident cover may terminate on any of the
following events. Any benefit will not be payable in these below cases:

1) On attaining age 70 years (age nearest birth day).
2) Closure of account with the Bank or insufficiency of balance to keep the
insurance in force.
3) In case a member is covered through more than one account and premium is
received by the Insurance Company inadvertently, insurance cover will be
restricted to one only and the premium shall be liable to be forfeited.
4) If the insurance cover is ceased due to any technical reasons such as insufficient
balance on due date or due to any administrative issues, the same can be
reinstated on receipt of full annual premium, subject to conditions that may be
laid down. During this period, the risk cover will be suspended and reinstatement
of risk cover will be at the sole discretion of Insurance Company.
5) Participating banks will deduct the premium amount in the same month when the
auto debit option is given, preferably in May of every year, and remit the amount
due to the Insurance Company in that month itself.

You can check the official notification here.

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Income Tax Benefits: The premium paid will be tax-free under section 80C and also the proceeds amount will get tax-exemption under section s 10(10D). But in case the proceeds from insurance policy exceed Rs.1 lakh , TDS from the total proceeds will be deducted at the rate of 2% if no Form 15G or Form 15H is submitted to the insurer.

We can hope that after it is launched, this scheme also will receive a huge response as we have seen in case of another small saving scheme Sukanya Samriddhi Account for girl child. Share your thoughts about Pradhan Mantri Suraksha Bima Yojana in the comments below.

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