Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)

Life insurance is an essential measure for a strong financial foundation. 

Life insurance is important because it provides financial security to the family in the event of an insured's untimely death. 

In many types of life insurance policies, a life risk policy is known as term insurance, and it is the cheapest because its premium is low in cost and it only covers death, savings or investment. 

Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)

The government launched PMJJBY as a social welfare scheme on May 9, 2015, which is a life insurance scheme under which a lump sum amount of Rs two lakh is covered. Its annual premium is Rs 330 and every Indian between the ages of 18 and 50 is eligible, who should have a bank account. 

It has to be renewed every year and it will continue till the policyholder is 55 years old. A bank account is necessary to connect to it, and it can be linked to only one bank account, no matter how many accounts you have.

To avail this policy, you will have to link your Aadhaar to your bank account. For this, you have to fill the form and also give an unsigned medical certificate, in which you will have to tell that you are not suffering from any serious illness recorded in the policy declaration form. 

You will also have to mention the nominee's name in the application form. At the beginning of this scheme, it was automatically linked to Jan Dhan accounts, but these changes have been made after complaints of its misuse.

This is a very good policy, as it can be linked to your existing bank account and paperwork also has to be reduced. Its premium auto debit facility automatically withdraws from the account on the due date. 

This does not risk the policy ending. Policyholders are also entitled to income tax exemption under Section 80C of Income Tax.

Management of PMJJBY

The scheme is managed by the Life Insurance Corporation of India (LIC) and other private life insurance corporation companies. 

By taking this, you will have to find out from your bank whether it is affiliated with the scheme and what formalities have to be completed for the application. Thus you can join at any time of any year and pay the premium, but the renewal date of its premium has been fixed as June 1.

It is important to know that your policy is claimed by the insurance company that issued it. The nominee will have to contact the bank where the policy was linked to the account with the death certificate of the policyholder for payment. 

Some more documents may be sought from the nominee if needed. The bank and the insurance company have to claim the claim within a month after receiving the documents related to the claim.

Is PMJJBY enough?

Santosh Prakash is 29 years old and if he does not have any other life insurance policy, he should take PMJJBY immediately. 

However, this cannot be enough, because the real needs of life can also be fulfilled. They suggest that they should not depend solely on this policy, they should assess their insurance needs and consider other policies to suit their potential.

Companies can soon launch insurance products related to the stock market:

The primary goal of customers investing in insurance products is to get guaranteed returns along with security. That is why only two types of ULIPs and traditional insurance products are available in the market. Now companies are preparing to launch insurance products related to the stock market.

The Insurance Regulatory and Development Authority of India (IRDA) has formed a committee headed by LIC official Dinesh Pant to launch index-linked insurance products (ILIPs) on demand from companies. 

IRDA has stated in the notification issued on September 1, 2020 that the format of the index-linked insurance product will be determined following the recommendations of the committee.

This is not the first time ILIP will hit the market. Even before 2013, insurance companies used to sell such products, but after the year 2000, after the insistence on selling these products, the regulator had stopped. 

However, on the recommendation of the companies, IRDA has formed a committee to decide on the product, which will submit its report in two months. The committee will analyze how to ensure safety and other interests of the insured with these products.

Returns will be determined by market fluctuations

IndiaFirst Life Insurance deputy CEO Rushabh Gandhi said that some of the plans of ILIP would be linked to 10-year government securities, whose premium would be fixed on the basis of annual benchmark rates. 

Apart from this, many plans will be equity-based, which will be related to the fluctuations in Sensex and Nifty. The risk will be less on products related to government bonds or securities, while the products in the stock market will be more risky and give higher returns. There is also a plan to introduce pension products under this scheme.

The cost will decrease for consumers?

A fund manager is needed to manage the insurance products currently available in the market, the cost of which falls on the consumers. 

The fund manager does not have a role in ILIP insurance plans, which also reduces the cost burden on consumers. 

The regulator will also determine the stock market index to be decided for the insurance product, so that transparency in the return on investment is maintained.

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