Pradhan Mantri Suraksha Bima Yojana (PMSBY) is the Indian government-backed accident insurance scheme started in 2015. It uses a nominal premium of ₹20 for an annual accidental death or disability cover of ₹2 lakhs. The scheme is open to individuals in the age range of 18 to 70 years who have a bank account and it promotes the financial security and welfare of society.
About the Pradhan Mantri Suraksha Bima Yojana (PMSBY)
- This risk insurance policy was introduced in India by the Central Government in 2015 and is administered by the Ministry of Finance.
- The scheme is meant to provide cheap accidental insurance protection to any person aged 18-70 years with a bank account.
- The scheme provides accidental death or full disability cover up to ₹2 lakh, partial disability cover up to ₹1 lakh, for a very nominal premium of ₹20 per annum.
- The premium is auto-debited from the bank account of the insured person so that there is no need to remember to make the renewal application.
- It means that the scheme is renewable annually, and the cover remains in force as long as the premium is paid.
- This is, therefore, an important landmark in financial inclusion since it secures the poor and vulnerable against the consequences of an accidental mishap.
- In enhancement of social security, the scheme goes further in achieving the universal goal of the government to provide insurance and financial protection for all citizens.
Features of Pradhan Mantri Suraksha Bima Yojana (PMSBY)
- Affordable Premium – The scheme provides accident insurance cover at a very nominal premium of just ₹20 per year.
- Eligibility – Available to persons aged 18 years to 70 years with a bank account.
- Coverage Amount – Covers an amount of ₹2 lakh for accidental death or total disablement and ₹1 lakh for partial disablement.
- Automatic Renewal – The policy premium is debited every year by auto-debit from the insured person’s bank account.
- Policy Term – The policy coverage lasts for a period of one year and renews every year.
- Easy Enrollment – Offered primarily through banks and insurers with very limited paperwork.
- Wide Accessibility – Any bank account holder can subscribe and enables financial inclusion.
- Exit and Rejoining – Upon exit, one can rejoin at any time by paying the premiums again.
- Government Initiative – Started with the aim of providing financial security to the low-income and vulnerable groups of society.
- Claim Process – Simple and facilitating claim settlement procedure through the concerned banks and insurers providers.
Objectives of Pradhan Mantri Suraksha Bima Yojana (PMSBY)
The objectives of Pradhan Mantri Suraksha Bima Yojana (PMSBY) are:
- Provide Low-Cost Accident Insurance – Impart low costing accident insurance cover to persons, especially those belonging to weaker sections of the society.
- Indemnity of Financial Distress – On account of involuntary death and disability due to accident, families become financially insecure.
- Provide Awareness about Insurance – Instill among people, especially in rural areas, the desire for insurance.
- Increase Insurance Penetration – To provide insurance benefits to all sections of society.
- Provide Easy Enrollment – A very simple process with auto-debit facility from the account of the insured.
- Financial Inclusion Initiatives – Coordinate with other government initiatives such as Jan Dhan Yojana so as to provide financial security.
- Furthering Savings Consciousness – Encourage individuals to think and plan for contingencies.
Thus, PMSBY is a major player in terms of social security enhancement and reduction of economic poverty because of accidents.
Significance of Pradhan Mantri Suraksha Bima Yojana (PMSBY)
- A Cheap Covering for Accidental Insurance—Life insurance under PMSBY is provided against accidental death and dismemberment with an annual premium of ₹20, thus making the scheme demand-side accessible, especially for the economically weaker sections of society.
- Financial Security—It provides financial security to the insured and his/her family against accidental death or disability while causing lesser economic distress.
- Generates Awareness of Insurance—This scheme generates awareness as to what insurance is all about and the importance of financial planning and risk management.
- Enrollment is Hassle-Free—Enrollment and renewal are facilitated by an auto-debit mechanism from a bank account held with any one of the bank branches participating in the scheme.
- Social Welfare—PMSBY acts as social security by providing some financial assistance to accident victims while supporting the families in their hour of need from an unexpected crisis.
- This would Promote Financial Inclusion.- As under the Jan Dhan Yojana, PMSBY ensures insurance penetration among unorganized sector workers and rural populations.
- Government Initiative for Universal Coverage- It is in conformity with the vision of a financially inclusive India with essential financial services made available to its entire citizenry.
Lacunae of Pradhan Mantri Suraksha Bima Yojana (PMSBY)
Though it is an excellent scheme for accident insurance at affordable rates, PMSBY has certain loopholes that need to be addressed:
- Low Awareness Level – Most eligible people, especially residing in rural areas, have no idea about the existence of the scheme and its benefits; hence, the enrollment is low.
- Lack of Awareness of Claim – Once a member becomes eligible for claim disbursement, they rarely know how to access the benefits from the scheme.
- Dependency on the Bank – The scheme has to be linked to the bank accounts, but many rural persons still encounter issues related to banking accessibility. Also, they are subject to failures of auto-debits in cases of insufficient funds; such sets them up for a disqualification for not being enrolled.
- Limited Coverage – The insurance covers only accidental death and disablement, excluding deaths due to natural causes, illnesses, and other health-related expenses.
- Claim Settlement Delays – At times, the claim works are delayed due to a plethora of evidence and some elements of red-tapism.
- No Maturity Benefits – The policy being only a risk cover does not encourage saving, so there are no maturity benefits. Hence, some people may find it unattractive.
- Lack of Customization – The scheme provides a fixed sum assured, which may not be adequate for all individuals, especially those needing higher coverage.
Addressing these gaps through promotion of awareness, simplifying claim procedures, and enhancing financial literacy can maximize the effectiveness of PMSBY.
The key pointers of Pradhan Mantri Suraksha Bima Yojana (PMSBY) for UPSC CSE Prelims
Some facts to remember during your preparation for Pradhan Mantri Suraksha Bima Yojana (PMSBY) for UPSC CSE Prelims:
- Year of Launch – 2015
- Ministry – Ministry of Finance
- Purpose – To provide cheap accident insurance to people, especially those belonging to low strata of income.
- Eligibility – All Indian citizens between the ages of 18 and 70 who must have a bank account.
- Premium-₹20 per annum (directly debited from bank account).
- Coverage – ₹2 Lacs for accidental death or total disability; ₹1 Lakh for partial disability.
- Mode of Enrollment – Via banks and insurance companies.
- Renewability – For one year (to be renewed every year).
- Funding – Fully funded by the insured himself (i.e., it is not a government-funded scheme).
- Implementing Companies – General insurance companies, both public and private, in tie-up with banks.
- Significance – It is one of the Jan Suraksha Schemes and thus promotes financial inclusion and social security.
This scheme is very important for UPSC Prelims, especially for questions related to government schemes, social welfare, and financial inclusion.
Way forward
To enhance Pradhan Mantri Suraksha Bima Yojana (PMSBY), awareness programs need to be conducted more vigorously, and participation in rural areas should be maximized. Streamlining claim processes and integrating digital platforms, along with improvements or extensions of coverage options, can result in efficient claim processing. Collaborations with banks and insurers can thus augment accessibility, making financial security more inclusive and widespread.
Conclusion
Pradhan Mantri Suraksha Bima Yojana (PMSBY) is a dignified initiative that promotes financial security through accident insurance at affordable rates. Comprising a tiny amount as a premium and attractive amounts as its coverage, it protects persons, especially the poor, from unfortunate incidents. PMSBY, thus, aids social security welfare and financial inclusion, thereby augmenting India’s commitment to universal insurance accessibility and protection.
