The government on Tuesday raised the premium for its flagship insurance schemes — Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and Pradhan Mantri Suraksha Bima Yojana (PMSBY) in order to make them economically viable.
“In view of the long-standing adverse claims experience of the schemes, Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and Pradhan Mantri Suraksha Bima Yojana (PMSBY), and in order to make them economically viable, the premium rates of the schemes have been revised by making it Rs 1.25 per day premium for both schemes that includes revising PMJJBY from Rs. 330 to Rs. 436 and PMSBY from Rs. 12 to Rs. 20,” the Ministry of Finance said in a press release.
Notably, after examining the claim experiences of the schemes, IRDAI stated that while the claims ratio (percentage of the number of claims paid to the premium earned) about PMJJBY and PMSBY, for the period up to 31st March 2022, is 145.24 % and 221.61% respectively the combined ratio (sum of claims ratio and expense ratios) pertaining to PMJJBY and PMSBY, for the period up to 31st March 2022, is 163.98 % and 254.71% respectively.
“In view of the adverse claims experience of the schemes, PMJJBY and PMSBY, and in order to make them viable for the implementing insurers the premium rates of PMJJBY and PMSBY have been revised with effect from June 1, 2022,” FinMin said.
FinMin added, “This would also encourage other private insurers to come on board for implementing the schemes, thereby increasing the saturation of the schemes amongst the eligible target population, especially those who are an underserved or unserved population of India.”
As of March 31, 2022, the number of active subscribers enrolled under PMJJBY and PMSBY is 6.4 crore and 22 crores respectively.
Since the launch of PMSBY, approximately ₹1,134 crores has been collected by the implementing insurers towards premium, and claims of ₹2,513 crores have been paid under PMSBY as of March 31, 2022.
Further, since inception, about ₹9,737 crores has been collected by the implementing insurers towards premium, and claims of ₹14,144 crores have been paid under PMJJBY as of March 31, 2022.
It needs to be noted that claims under both the Schemes have been deposited into the bank account of the beneficiaries through the DBT route.
The Government has set a target to increase the coverage from 6.4 crores to 15 crores under PMJJBY and from 22 crores to 37 crores under PMSBY in the next five years which will take us closer to covering the eligible population through these two flagship schemes for social security.
