After long contemplation and debacle, it seems that the Indian government is finally considering the benefits of social security for the poor or underprivileged people of India. There had always been discord between Indian citizens about the lack of government-aided Insurance schemes that offered pension plans as well.
After Jan Dhan campaign’s brilliant success in India, three mega social-security initiatives aim to uplift India’s financial scene even more!
Privately-owned companies have long been selling and promoting such schemes, but at higher rates as compared to what the government plans to sell them at. Myriads of pension plans from Insurance companies are available for sale via insurance agents and online portals, but none of them are as cheap as the ones the government plans to introduce on May 9 this year.
Prime Minister Narendra Modi’s initiative of ‘Acche Din’ is paying off and he is now all set to launch new flagship social security schemes for Indian citizens that have Rs 2 lakh accidental cover at an enticing premium of just Re. 1 per month!
Details About The Schemes
- These schemes, are aimed to provide affordable and universal access to essential social security protection to Indian citizens with meager budgets.
- Also, they are launching with features such as linking with an auto-debit facility with a subscriber specified bank account so that premiums are deducted automatically from the account without the subscriber having to visit any insurance office physically for payment of due premium(s).
- India’s finance minister Arun Jaitley had promised to launch these schemes shortly during his budget announcement for FY-16 on February 28, 2015.
- Three insurance schemes are being launched–
- Pradhan Mantri Suraksha Bima Yojana (PMSBY) and Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), insurance schemes, which would provide apt insurance cover to a beneficiary in the sudden event of unfortunate death by any cause, death and/or disability due to a severe accident.
- Atal Pension Yojana (APY), pension schemes that will address the income security issues old age people suffer during their retirement years.
Benefits of These Schemes
The schemes are expected to address the low coverage issues and the old age income security issues in the country due to the failure of older products in the past.
The PMSBY insurance will offer renewable one-year accidental death-cum-disability cover of Rs. 2 lakh for partial or permanent disability to all the savings bank account holders under this scheme figuring within the age group of 18-70 years. The premium for this opt-in facility will be just Rs. 12 per annum for each subscriber.
- This scheme would be administered to the public only through the Public Sector General Insurance (PSGI) Companies or other General Insurance companies in collaboration with the Government that is willing to offer these policies on similar terms as the bank of the subscriber lays down.
The PMJJBY insurance will offer a renewable one-year life cover of Rs. 2 lakh to all the savings bank account holders subscribed under this scheme figuring within the age group of 18-50 years, which will cover death due to any reason and it will feature a premium of just Rs. 330 per annum for each subscriber.
- The scheme would be administered to the public through accredited LIC (Life Insurance Corporation of India) or allied insurance companies that are willing to float this scheme on similar terms as the bank of the subscriber lays down.
The pension scheme, Atal Pension Yojana will solely focus on the unorganized sector of India.
- The scheme aims to provide subscribers under its belt with a fixed minimum pension of Rs. 1000, 2000, 3000, 4000 or Rs 5000 per month which will start at the age of 60 years. This depends solely on entering at an age of the subscriber between 18 and 40 years only.
- So, the period of contribution (premium payment duration)of any subscriber under the scheme would be at least 20 years or more. The fixed minimum pension amount under the scheme of Rs. 1000 will be guaranteed by the government.
- The Central Government aims to co-contribute at least 50% of the total contribution amount or Rs. 1000 per annum (for a period of 5 years), whichever is lower to the bank account of the subscribers who are within the prescribed age group.
- This offer is applicable only to people who subscribe to this scheme before December 31, 2015, and who are not under any other social security scheme or are income taxpayers.
To sum up, this is a brilliant initiative by the government to give financial upliftment to the lower classes of society who often languish due to lack of funds. Senior Union Ministers of India including the Home Minister Rajnath Singh (Lucknow), Finance Minister Arun Jaitley (Mumbai), External Affairs Minister Sushma Swaraj (Bhopal), Urban Development Venkaiah Naidu (Varanasi), Food, Consumer Affairs and Public Distribution Minister Ram Vilas Paswan (Patna) and Road Transport and Highways Minister Nitin Gadkari (Bhagalpur) will launch the schemes nationwide.
Please pass this information on to people you know who are in need of such policies.