The claims-to-premium ratio for the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) — a term life insurance policy — hit an unsuitable 121 % in 2016-17, the second year of operations. The ratio was an even higher at 170 % in 2016-17 for the Pradhan Mantri Suraksha Bima Yojana (PMSBY), under which payment of Rs 2 lakh is guaranteed in the case of accidental deaths or grievous injuries.
These schemes, launched in May 2015, were projected as path-breaking steps to provide affordable, universal access to essential social security protection. The annual premium payable under PMJJBY, which covers even suicidal deaths, is Rs 330 while the same is just Rs 12 for PMSBY. The premium amount has to be paid by May-end every year for renewal and the policies are linked to the beneficiary bank accounts.
In the first two years of the schemes, the claim-to-premium ratios were 88 % for PMJJBY policies, under which the sum assured is again, Rs 2 lakh, and 121 % for PMSBY. Compare this with the claims ratio of 40-45 per cent for usual personal-accident and term life covers.
“It (claims ratio in PMJJBY) is not very alarming as of now. But, if this trend continues year after year, then something has to be done in terms of pricing,” said S B Mathur, former chairman of LIC and Life Insurance Council.
