PMSBY: The Government Initiated Accident Insurance Scheme

Pradhan Mantri Suraksha Bima Yojana (PMSBY) is one of the three major social security schemes offered by the Government of India. The scheme offers personal accidental coverage to the insured person. The policy period is one year per member, and one can renew the policy annually.

The scheme provides the following benefits to the insured:

1. Death benefit: Rs.2 lakh insurance cover for the nominees in case of accidental death of the insured.
2. Permanent Total Disability: Rs.2 lakh life insurance covers the insured if he suffers from permanent loss of both eyes or both hands/feet or loss of eyesight or use of a hand or a foot by accident.
3. Permanent Partial Disability: Rs.1 lakh life insurance covers the insured who suffers from permanent loss of eyesight or a hand or a foot by accident.

The scheme does not include death due to suicide and partial disabilities that are recoverable and not permanent. However, it covers death, disability and accident due to natural calamities.

Also, note that the scheme is not mediclaim insurance, where medical expenses will be reimbursed.

Insurance Premium and Period of Cover

The premium amount is Rs.12 per person for one year. The insurance coverage period is from 1st June to 31st May of the following year. The person who wants to join the scheme can enrol or give consent for an auto-debit facility before 31st May. Those who will enrol or renew the scheme after 31st May will be insured prospectively for the balance period, and the premium amount will be charged fully. Hence, the subscriber will benefit from 12 months of insurance cover only if he applies before 31st May.

Enrolment Procedure

The subscriber can download the application form from https://www.jansuraksha.gov.in/Forms-PMSBY.aspx, fill and submit it to their bank. The scheme can also be activated through the net banking or SMS application process of the bank.

Eligibility Criteria

All the bank account holders, other than institutional bank account holders, between the age of 18-70 years, are entitled to join this scheme. The person would be eligible for the scheme through only one bank account.  

If there are joint account holders, all the account holders can join the scheme provided they satisfy the eligibility criteria and pay the premium amount through the auto-debit facility. NRIs are also eligible to apply, and if the claim arises, the beneficiary will receive the claim amount in Indian currency.

Termination of Accident Insurance Cover

The accident cover will be terminated in the following events:

• When the insured attains the age of 70.
• In case of closure of bank account.
• If there is insufficient balance to keep the insurance active.

The scheme provides accidental cover at affordable premium rates, mainly for low income earning. It is a government-backed scheme that will give immediate relief to low-income families if the family member meets with an accident.

For any clarifications/feedback on the topic, please contact the writer at namita.shah@cleartax.in