Pradhan Mantri Suraksha Bima Yojana – 13 Points to know

Finance Minister Arun Jaitley in Budget 2015-16 announced a
low-cost personal accidental cover called Pradhan Mantri Suraksha Bima Yojana
to increase the insurance penetration level in the country.

1. What is personal accidental and full disability cover: It is an
insurance policy which covers death or disablement of the policyholder caused
due to accident or accidental injuries.

2. Risk coverage: The
Pradhan Mantri Suraksha Bima Yojana will offer an accidental death and full
disability cover of Rs. 2 Lakh and for partial disability cover of Rs. 1 Lakh.

3. Eligibility: This
cover is available to people in age group 18 to 70 years.

4. Premium: Rs.12 per

5. What Experts Say: Financial planners say it is a good option for those without
an insurance cover but for the middle class the cover is inadequate. Suresh
Sadagopan, the founder of Ladder 7 Financial Advisories, says an equivalent
cover in the market would cost higher (around Rs. 100) but the cover itself is not meaningful for most in the
middle class. A cover of nearly Rs. 50 lakh can be bought for Rs. 6000, he added.

6. Payment Mode: The
premium will be directly auto-debited by the bank from the subscribers’ account.

7. Renewal: Subscribers
have to renew this accidental cover every year. If they don’t want to have the
hassle of renewing the cover every year, they can give an instruction for
auto-debit of bank account every year.

8. Who will offer this scheme? The
scheme will be offered by all public sector general insurance companies – New
India Assurance Company, National Insurance Company, The Oriental Insurance Co,
and United India Insurance Co – through tie-ups with banks. The government also
plans to rope in other insurers as well.

9. How to opt: Any
person having an Aadhaar-linked bank account can join the scheme by submitting
a form to the bank.

10. Launch date: Pradhan Mantri Suraksha Bima Yojana is expected to be
launched on June 1 this year.


11. Where to get this
All the public sector general insurance
companies such as LIC will offer this scheme. Other private insurers can also
offer this scheme but has to tie-up with the banks such as SBI.
12. Any Contribution by the Government?
Government contribution towards this
scheme will be decided separately each year. The contribution will come from
the unclaimed money lying idle in various public welfare fund.
13. Taxation
The premium paid will be tax-free under section
80C and also the proceeds amount will get tax-exemption u/s 10(10D). But if the
proceeds from insurance policy exceed Rs.1 lakh and no Form 15G or Form 15H is
submitted to the insurer, there shall be deduction of TDS at the rate of 2%
from the total proceeds.

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