PMJJBY (Pradhan Mantri Jeevan Jyoti Bima Yojana)

What is PMJJBY and how is it beneficial for the individuals?

The Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY in short) is a Life insurance scheme, that is available for Indian citizens. It is backed by the central government of India, and the main purpose is to provide a basic life insurance to all the citizens, at an affordable rate.

The coverage period under PMJJBY insurance is for 1 year duration, from 01 June to 31 May of next year. After this, the subscriber would need to renew the policy for another block of 1 year. This is usually done through an auto-debit instruction from the linked bank account.

The PMJJBY has been introduced as a Social Security scheme for individuals only, and institutions like Companies, Partnerships, Proprietorships etc. are not eligible for the scheme. Although it is open for all individuals, but the scheme has been designed in a way that will be more beneficial to the economically weaker section of society.

PMJJBY eligibility

At the time of entering the scheme, the individual should be between 18 years and 50 years of age. The subscriber should also hold an account with sufficient balance, in a participating bank branch or a post office.

It is possible that an individual could have multiple accounts across different banks and post offices. But even then, the individual can subscribe to the scheme only once, through one bank or post office account.

If there are multiple subscriptions made inadvertently, then the payout will be restricted to only 1 policy (and other duplicate policies will be forfeited). But the PMJJBY insurance policy could be purchased in addition to other, normal Life Insurance policies.

Others eligible for PMJJBY scheme

The PM Jeevan Bima Yojana is also available for Non-Resident Indians (NRIs), who hold an account with an eligible bank/post office in India. Any claim settlement in case of NRIs will happen in INR currency only.

In case of a Joint Account, all the individuals mapped to the account can separately register for the Jeevan Jyoti Bima Yojana. The same bank account could be used by the Joint Account holders. But of course, each of the subscriber would need to individually satisfy the eligibility criteria mentioned above.

PMJJBY scheme details and structure

Although the Pradhanmantri Jeevan Jyoti Yojana is a government-backed scheme, but it can also be provided by private Life Insurance companies that are registered in India. The banks are free to tie-up with any of the insurance companies, in order to offer this product to the customers.

The scheme is also administered by the Life Insurance Corporation (LIC) of India, through the banks and post offices that decide to use LIC as the insurer.

The banks and post offices where the account is held, will be the Master Policy Holders. They will be managing the collection of premium from the account of the customer, and for depositing the amount with the insurance company. They will also be responsible for providing PMJJBY details to the client, and to gather and store the forms/documents/declarations from the customer.

So, the information gathering and PMJJBY certificate download is possible through the bank/post office, from which the policy has been purchased.

PMJJBY premium payment

Since this is an insurance scheme, the subscriber will need to make regular Premium Payments. When enrolling for the scheme, the individual will be asked to setup and provide consent for an auto-debit instruction in their linked bank/post office account.

The PMJJBY renewal happens every year, and the money is automatically deducted from the mentioned bank account, or post office account. The premium is payable on an annual basis, through one single installment. If the premium is not paid due to any reason like insufficient balance or closure of account, then the policy will not be renewed for next year.

The current annual premium for the Pradhanmantri Jeevan Jyoti Bima Yojana has been set at INR 436. This is subject to review every year, and it could be changed based on the viability of the scheme. So, it is best to check with the bank/post office about exact premiums and availability of the account.

Joining in between

As mentioned before, the insurance policy period is for 1 year, which lasts from 01 June to 31 May of next year. But the subscribers are free to join the scheme throughout the year. If joining in between the year, then the premium to be paid will be adjusted on a pro-rata basis.

Example: If enrolling in the months of June, July and August, then the full premium will be payable for the 1st year. But if the subscriber enrolls in the months of December, January and February, then only half the premium will be payable in 1st year (for the remaining policy duration till 31 May).

Once the subscriber has joined, the policy will renew on 01 June, and the full premium will be payable from 2nd year onwards. There is usually a Lien/Cooling Period of 30 days, where the insurance benefit is only available after 30 days from premium payment date (except in case of accidental deaths).

PMJJBY benefits

Just like the PM Suraksha Bima Yojana (PMSBY), the PMJJBY is a social security scheme that is intended for the benefit of all the individuals. So, the policy premium has been kept low. This increases the affordability and accessibility to the scheme, and the idea is to establish a basic insurance coverage for everyone.

In case of death of the insured person during policy period, the defined beneficiaries will receive a sum of INR 2,00,000 (INR 2 lakh). The reason/cause of death does not matter in the claim settlement of this insurance policy.

Moreover, the insurance policy is only available till the age of 55 years. Once the individual attains this age, the policy will get terminated, and there will be no payout to the policyholder. But the maximum PMJJBY age limit for new entry in the scheme is 50 years.

Maturity and surrender

There is no maturity amount or benefit paid at the end of the insurance period. In addition, there are no surrender benefits for the PMJJBY policy. This insurance does not have any investment option, and it only covers mortality. So, only the death benefits will accrue to the Nominee.

This clause in PMJJBY means that the annual premium paid by the subscriber is explicitly used to provide the Life Insurance coverage for 1 year. The payout only happens if a claim is made after the death of the insured person. Having no benefits at maturity/termination time, helps the insurance company to keep the premium low for the public.

Disclaimer

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  • Some information could be outdated / inaccurate
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