Insurance, though another investment, is a safety measure we should all have in place. It ensures that individuals are compensated for the losses incurred from a contingency i.e. destruction of a property, the death of someone or even unprecedented health issues. Life insurance is potentially one of the most valuable forms a person can have, despite its importance, 998 million Indians do not have it- that’s greater than the entire European population! The Indian Government has several social service schemes in place which provide security across various fields. Many people will often understandably opt for insurance plans from large companies; however, it is important to encourage those less off to set up bank accounts in order to make these government initiatives more accessible. Though this may not be of interest to you, true social service requires the education of others. So, what are some of the basic insurance schemes that are provided by the Indian government?
1. Pradhan Mantri Suraksha Bima Yojana (PMSBY)
This is an accident insurance scheme which is eligible for bank account holders aged between 18 and 70, covering both partial and permanent disabilities, alongside deaths which occur as a result of an accident. There are certain exemptions which are not included in this scheme, such as partial disability which is irrecoverable i.e. loss of a hand or foot. A major benefit of this scheme is that it is priced considerably lower than commercial insurance schemes. An individual only needs to have one savings account and operates using an auto-debit mechanism. A fixed annual premium of Rs. 12 is automatically deducted from the account. Under this facility, Rs. 2 Lakh is given for accidental death and Rs. 1 Lakh for partial disability.
2. Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)
Similar to PMSBY, a bank account is required for this life insurance scheme. However, it is only eligible for those between the ages of 18 and 50. This type of insurance covers death as a result of any situation and also operates using an auto-debit facility. The fixed annual premium for this type of insurance stands at Rs. 330, which is slightly higher, however, a pay-out of Rs. 2 Lakh is given for death by any circumstance. This scheme differs slightly, as families and couples can register with a joint account, should they all adhere to the enrolment criteria- paying the premium rate per person. Roughly 5.35 crore people had inscribed to this insurance plan by May 2018, with 102,849 claims having been processed.
3. Pradhan Mantri Jan Aarogya Yojana (PM-JAY)- Ayushman Bharat
As part of the Ayushman Baharat flagship scheme for a comprehensive healthcare system, PM-JAY is one component which is tackling healthcare inequality amongst rural India. This programme provides health cover to families which are struck by poverty, deprivation and are most vulnerable. Irrespective of the size of the family and the age or gender of the person, if eligible, the family will receive a Rs. 5 lakhs cover should they be hospitalised or require secondary or tertiary care. Families which qualify for this scheme are listed on the SECC 2011, the Socio-Economic Caste Census 2011 and this covers roughly 10.74 crore families. The main benefit of this insurance scheme is that it is fully financed by the government, meaning families do not need to pay any money when hospitalised. The care also extends to both pre and post-hospital and is guaranteed from the start of the policy.
4. Pradhan Mantri Fasasl Bima Yojana (PMFBY)
This is a crop insurance scheme, which has the main aim of allowing farmers to navigate their way through the many challenges faced by mainstream insurance programmes. In fact, it is compulsory for farmers who have committed to loans to comply with this scheme. The programme compensates losses farmers may experience, insuring against several external forcings such as extreme weather events. Should a farmer incur a loss, they will be paid according to a calculated difference between the threshold yield and actual yield. The threshold yield is enumerated from the average crop yield across the last 7 years and the compensation is judged according to the risk associated with the failed crop.
Though we may never consider any of these schemes personally, our role as good Indian citizens and the true definition of social service is to inform and guide those who are less off to beneficial platforms. We ought to educate those around us, be selfless, altruistic and then we will become part of a well-integrated society.
Write-up by: Roshni Kumar
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