A complete guide about Pradhan Mantri Suraksha Bima Yojana

A complete guide about Pradhan Mantri Suraksha Bima Yojana

The Prime Minister of India, Mr Narendra Modi has launched various types of social security schemes in his tenure. These schemes are insurance schemes which promise either free insurance coverage or coverage at very low premium rates. One such insurance scheme which the Prime Minister launched is Pradhan Mantri Suraksha Bima Yojana (PMSBY).

What is PMSBY ?

The Pradhan Mantri Suraksha Bima Yojana is a personal accident insurance scheme which covers accidental death and disablements. The scheme was introduced in the Union Budget of 2015 and was later implemented in May that year.

Features of PMSBY insurance

Listed below are some of the most important features of Pradhan Mantri Suraksha Bima Yojana which you should know –

• The duration of the scheme is one year after which you can renew it
• The coverage duration is fixed. It starts from 1st June and continues up to 31st May of the next year
• The premium of the scheme has to be paid through auto-debit from your bank account
• Renewal would be allowed only if you agree for auto-debit of premiums from your bank account
• Deaths and accidents due to natural calamities and murder are also covered
• The premium for the scheme is very low and fixed at INR 12

What is covered under PMSBY?

The PM Suraksha Bima Yojana scheme covers the following contingencies –

• Accidental death
• Permanent total disablement which includes complete and irrecoverable loss of limbs (both hands or feet), loss of both eyes, loss of one eye and one hand or foot
• Permanent partial disablement which includes complete and irrecoverable loss of one eye, one hand or one foot

The amount of coverage for each instance covered under the PMSBY scheme is as follows –

What is not covered under PMSBY?

Accidents or disablements suffered because of suicide, attempted suicide and self-inflicted injuries would not be covered under the plan. Moreover, there is a lien of 45 days when you buy the scheme. During these 45 days, coverage is not available except for instances of accidental death. When the policy is renewed, the lien would not apply.

How does the PMSBY insurance scheme work?

The PMSBY scheme is offered by banks in partnership with insurance companies. All four public limited general insurance companies and other general insurers offer the PMSBY insurance scheme. You have to apply for the scheme from your bank account. This is a personal accident group insurance coverage where the bank is the Master Policyholder and the account holders are the insured members. When you apply you pay the premium of the scheme from your bank account. Thereafter, the insurance company allows you coverage. You also have to give consent for auto-debit of premium from your bank account if you want to renew the coverage in the subsequent years.

In case of a claim, you, your nominee or legal heirs would have to intimate the bank. The bank, in turn, would inform the insurance company. The insurance company would verify the claim, assess the claim documents and pay the claim amount to you, your nominee or legal heirs’ bank account.

Who is eligible for PMSBY?

Resident Indians and NRIs can buy the Pradhan Mantri Suraksha Bima Yojana scheme. To buy the scheme you would have to fulfil the following two eligibility criteria –

• You should be aged 18 years to 70 years
• You should have a bank account in your name

Termination of coverage under PMSBY

If you are eligible to join the scheme, you can avail insurance coverage which can be renewed in subsequent years. However, the coverage under the Suraksha Bima Yojana scheme would terminate under the following instances –

• If you attain 70 years of age because the scheme does not provide coverage after 70
• If you close the bank account from which you have bought the scheme
• If there is an insufficient balance in your bank account from which you bought PMSBY
• If you have subscribed to the scheme through more than one bank account. In this case, coverage from only one bank account would be allowed. Coverage availed from other bank accounts would be terminated and the premium that you paid would be forfeited

If the coverage under Pradhan Mantri Suraksha Bima Yojana has been terminated due to closure of bank account or insufficient balance, you can revive the coverage. To revive you would have to pay the full annual premium and also submit a declaration of good health. Upon your revival request, the insurance company would allow coverage if satisfied of your continued good health.

Making a claim under PMSBY

In case of accidental death or disablement, the claim needs to be made by filling up a claim form. Death claims should be made by your nominee or legal heirs if you did not nominate anyone. Disability claims, however, would have to be made by you. The claim form is available at http://www.jansuraksha.gov.in/Forms-PMSBY.aspx. You should download the form, fill it up and submit it with your bank. Documentary evidence of the claim would also be required. The documents which would be required, besides the claim form, include the following –

• For deaths or disablements due to accidents, drowning, criminal activities, etc., police FIR would be required
• Death certificate
• Post mortem report
• Hospital records in case of accidents or deaths due to animal bites, fall, etc.
• Disability certificate (which has been issued by a civil surgeon) and discharge summary from the hospital in case of disability
• Bank account details of the nominee or legal heirs for receiving the claim
• Identity proof of the nominee or legal heirs in case of death claims

You should make a claim within 30 days of the accident. The death claim amount is paid to the bank account of the nominee or legal heir. Disablement claims, however, are paid to the account of the insured member.

How to buy PMSB?

As mentioned earlier, you can apply for the PM Suraksha Bima Yojana scheme through a bank where you have an account. To apply, you have the following three options –

• Through your bank’s branch

You can visit the nearest branch of your bank and apply for the scheme. There would be an application form which you would have to fill up and submit. The bank would, then, process your form, deduct the premium from your bank account and allow you coverage

• Through SMS banking 

Various banks also allow you to apply for PMSBY through SMS banking facility. You would have to send a text to the bank’s SMS banking number to apply for the scheme. The bank would acknowledge your text message and let you know the formalities to apply for the scheme. You can fill the application form and submit it to the nearest branch and apply for insurance

• Through internet banking 

The modern and easier way to apply for the scheme is through internet banking facility allowed by most banks. Just log into your internet banking account and there you can choose the PMSBY scheme. Fill up the application form online, submit it, pay the premium online and your coverage would start

You can choose any of the above-mentioned ways to apply for PMSBY scheme and avail coverage. The documents required to buy the scheme include your Aadhar Card, bank passbook and the application form for the scheme.

Things to remember

The Pradhan Mantri Suraksha Bima Yojana is a simple scheme of insurance which you can avail easily through a bank account. However, here are some important facts which you should remember about the scheme –

• You can enrol for the coverage any time. However, since the coverage duration is fixed, whenever you apply, the coverage would expire on 31st May.
• The full premium would  have to be paid even when you apply for the scheme any time after 1st June
• In case of NRIs, the claim would be paid in Indian currency only
• For renewals, your consent for auto-debit should be given before 31st May
• Even if you have other personal accident insurance schemes, the claim under the PMSBY scheme would be payable
• All the account holders of a joint account can apply for the scheme from the same account
• The premium might change in subsequent years depending on the claims experience of the insurance company

The Pradhan Mantri Suraksha Bima Yojana is a great step by the Government to boost accident insurance coverage among Indians. The cases of road accidents are increasing as more and more vehicles are being run on Indian roads. Accidents cause financial loss both to the victim as well as the family. With the PMSBY scheme, the Government aims to provide financial assistance to the victim and his family in case of accidental contingencies. The scheme is a step towards social welfare and since it is open to all, you can also benefit from the coverage offered by the scheme. The premiums are very low making the scheme accessible even to the lower-income class individuals for whom insurance is all the more necessary. Crores of Indians have already subscribed for the scheme. What are you waiting for?

Frequently Asked Questions

1. If I am hospitalised due to an accident, would the scheme cover my hospitalisation expenses?

No, the PMSBY scheme does not cover hospitalisation expenses. It pays a lump sum benefit in case of accidental death or disablement.

2. Are there any tax benefits of the scheme?

Premiums paid would be allowed as a deduction under Section 80C. Claims received, up to INR 1 lakhs, would be allowed as a tax-free income under Section 10 (10D). For higher claim amounts, 2% of the claim amount would be deducted as TDS.

3. How is the premium paid divided between the bank and the insurance company?

Out of the premium of INR 12 that you pay, INR 10 is paid to the insurance company for providing coverage. INR 1 is paid to the agent as a reimbursement for the expenses it incurred in selling the coverage. INR 1 is paid to the bank as the reimbursement of its administrative expenses.

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Courtesy Article: Supramind / October 10, 2019