Ahead of the General Elections next year, the government is likely to come out with a large-scale campaign for its mass financial inclusion schemes for life and accident insurance.
According to sources, the government is likely to start large communication programmes for renewal of policies under the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and Pradhan Mantri Suraksha Bima Yojana (PMSBY).
The Finance Ministry is likely to soon ask life insurers and banks to ensure that policy renewals under both the schemes take place seamlessly, starting next month, through auto debit facility. Additionally, it will also ask participating banks and insurers to advise and educate customers on the benefits of the two schemes.
However, a significant change in the design of schemes — with higher premium or a longer exclusion period, as has been sought by many in the insurance industry — is unlikely.
“These schemes have been doing exceedingly well and have been a great source of benefit to the people. It is felt that at present, there is no need to change its design,” said a government source, adding that it has been one of the government’s key financial inclusion programmes, along with opening bank accounts in the Pradhan Mantri Jan Dhan Yojana and direct transfer of subsidies.
“To change the provisions of the schemes at present is not something that is being considered. It can be looked at next year,” he added.
Sources said that these have been flagship schemes of the NDA government and should not be tweaked at present.
Launched by Prime Minister Narendra Modi in May 2015, the PMJJBY provides life insurance cover of Rs.2 lakh at an annual premium of Rs.330 while the PMSBY provides accident insurance cover of Rs.2 lakh at just Rs.12 per year to all bank account holders.
Industry view
However, the insurance industry has been seeking a hike in premium on the grounds that insurers have been making 15-20 per cent loss while settling claims.
“For some insurers, especially in life insurance, the PMJJBY has proved to be a problem due to high losses. There has been an active discussion with the government on the issue. But it is felt that the numbers are high enough to make up for the losses,” said an executive with an insurance firm.
Gross enrollment to the PMJJBY has nearly doubled in the last two years to 5.33 crore. As many as 89,766 claims were paid in 2017-18 involving Rs.1,795.32 crore. Similarly, gross enrollment in the PMSBY touched 13.48 crore in 2017-18. A total of 16,454 claims were paid involving Rs.329.08 crore last fiscal.
