Alert! Premium for government insurance plans revised from June 1, 2022 – See the new rates

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The premium rates of Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and Pradhan Mantri Suraksha Bima Yojana (PMSBY) have been revised upwards by the government. For PMJJBY, the premium has been increased from Rs. 330 to Rs. 436 while for PMSBY, the premium increase is from Rs. 12 to Rs. 20. The premium rates of the schemes have been revised bringing them to Rs 1.25 per day premium for both schemes.

PMJJBY is a one year life insurance scheme for life cover of Rs. 2 lakh (term insurance), renewable from year to year, providing cover in case of death due to any reason and is available for people between the ages of 18 and 50 (life cover up to age 55) with a savings bank account who give their consent to join and activate direct debit. Coverage is for one year, from June 1 to May 31.

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Pradhan Mantri Suraksha Bima Yojana (PMSBY) is a scheme providing accidental death and disability insurance. This is a one-year coverage and can be renewed each year by the individual. For those who had previously subscribed to the PMSBY scheme, the premium is withdrawn from the policyholder’s bank account through an ‘automatic debit’ facility in a single payment. Your bank account will generally be debited between May 25 and May 31 each year.

From June 1, 2022, the bounty for Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and Pradhan Mantri Suraksha Bima Yojana (PMSBY) will be Rs 436 and Rs 20 respectively.

The number of active subscribers registered under PMJJBY and PMSBY as of 31.3.2022 is 6.4 crore and 22 crore respectively. Since the launch of the PMSBY, an amount of Rs 1,134 crore has been collected from the implementing insurers for premiums and claims of Rs. 2,513 crore have been paid under the PMSBY as of 31.3.2022.

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Additionally, an amount of Rs. 9,737 crore has been collected by the implementing insurers for premiums and claims of Rs. 14,144 crore has been paid under PMJJBY as of 31.3.2022.

Claims under both schemes were deposited in the beneficiaries’ bank accounts through the DBT channel.

When the programs were launched in 2015, it was decided to conduct an annual review of the amount of the premium (Rs. 12 for Pradhan Mantri Suraksha Bima Yojana and Rs. 330 for Pradhan Mantri Jeevan Jyoti Bima Yojana) based on disaster experience.

However, no revision of the premium rates has been carried out over the last 7 years since the creation of the plans despite recurring losses for the insurers.

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After reviewing the claims experience of the schemes, IRDAI advised that while the loss ratio (percentage of the amount of claims paid versus premiums earned) for PMJJBY and PMSBY, for the period up to 31 March 2022 , is 145.24% and 221.61% respectively, the combined ratio (sum of loss ratios and expense ratios) for PMJJBY and PMSBY, for the period up to March 31, 2022, is 163.98 % and 254.71% respectively.

In view of the poor claims experience of the PMJJBY and PMSBY schemes and in order to make them viable for the implementing insurers, the premium rates of PMJJBY and PMSBY have been revised from 1.6.2022.

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