Pradhan Mantri Suraksha Bima Yojana – important facts you need to know

One of the most important investments we can ever make in life is insurance. We need to invest in a wide range of insurance policies that provide us a sense of financial and legal relief when we find ourselves in stressful situations. But the fact of the matter is that these insurance policies come at a heavy price, setting us back by thousands, if not lakhs of rupees every year. Thankfully, in 2015, the Government of India introduced the Pradhan Mantri Suraksha Bima Yojana, an accidental insurance scheme that is deemed as the most inexpensive insurance scheme in the world. In this article, we have highlighted some important facts about this policy.

Policy application

Interested applicants between the ages of 18 and 70 can apply for insurance under the PMSBY policy by approaching one of the banks participating in the scheme. You can also look online for specific insurance companies providing this scheme in association with the Indian government. All you need is an operating savings bank account and Aadhaar Card to apply for this policy. You must visit the bank/insurance provider and fill the policy application form in order to subscribe to this scheme. The policy can also be purchased through net banking.

Benefits

Here are some of the benefits of applying for the PMSBY scheme.

• The scheme offers the cheapest accidental insurance in the world with an annual premium of ₹12 i.e. a monthly premium of just ₹1, making it the most inexpensive insurance policy; one that every single person can afford.
• The insurance amount of ₹12 is auto-debited from the policy holder’s account on an annual basis, so there is no possibility of missing premium payment and being uninsured at any given time.
• For this small premium amount, the Pradhan Mantri Suraksha Bima Yojana provides accidental death and full disability cover of ₹200,000.
• In case of partial disability, the insured party is provided a partial disability cover of ₹100,000.
• The insured party can also avail tax deduction under Section 80C for the payment of insurance premiums.
• In case a claim is filed, then as per Section 10 (10D) of the Income Tax Act, the sum of ₹100,000 received under the scheme is tax-free.

Inclusion in the policy

The PMSBY policy is a rather straightforward policy. There are a number of situations under which coverage is offered. They are:

• The policy offers coverage against partial and complete disabilities and/or death caused due to accidents or natural calamities.
• The policy offers coverage due to instances of disabilities caused due to attempted murder or death caused as a result of murder.
• PMSBY offers coverage owing to loss of one or both limbs and eyesight as a result of an accident.

That said, an insurance claim can be rejected if the insured party attempts suicide or dies as a result of suicide.

Clauses of termination

The government reserves the right to terminate your PMSBY policy in case of the following below mentioned situations:

• The insurance policy is only available for individuals between the ages of 18-70. Once the applicant turns 70, the insurance policy will be terminated automatically.
• The government reserves the right to terminate the policy if the policy holder closes his/her bank account linked to the scheme.
• The insurance policy may also be terminated if the policy holder fails to maintain sufficient balances in this account to keep the insurance policy valid and active.

The PMSBY policy can be terminated if the beneficiary has opted for coverage under one than one policies provided by the same insurance company.