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What is Pradhan Mantri Suraksha Bima Yojana?

You must have heard the famous saying “Accidents can happen to anyone”. A fall from the stairs. A car hitting your bike. Even slipping on a banana peel. All these are accidents and you cannot prevent them. And there’s a bigger problem. Accidents mean costly medical treatment and your money is gone in a flash.

So what can you do about this? Can you just lie back and hope for the best? You might not be able to prevent an accident but you can monetarily prepare yourself for one. A personal accident policy would be the best way to do so. A personal accident policy can cost you as less as INR 200-500 a year for a sum assured (the policy will pay you in case of death or disability due to an accident) of INR 2-4 Lakhs .You could easily afford this. But what about your maid or driver. Could they pay so high a premium and take up a personal accident policy? To satisfy the insurance needs of the poor and needy in India the Government has started the Pradhan Mantri Suraksha Bima Yojana scheme. This policy has a ridiculously low premium and by availing it for your maid or driver you not only do a good deed but also help India achieve financial inclusion.

What is the Pradhan Mantri Suraksha Bima Yojana?

This policy covers you for death or disabilities you suffer in an accident or injuries caused by accidents.

How can you avail this policy?

You have to be between 18-70 years of age and need to have a bank account .Your bank account needs to be linked to your aadhaar number. You could then fill a simple form at the bank before the 1st of June each year and join the scheme.You have to specify a nominee (say a family member) when you fill up the form. You have to specify your relationship with the nominee. If your nominee is a minor you will have to give the name of the guardian.

What about the premiums for the Pradhan Mantri Suraksha Bima Yojana scheme?

The premium is ridiculously low and a mere INR 12 a year. This is just 1 rupee a month.

What is the sum assured you get for this premium under the Pradhan Mantri Suraksha Bima Yojana scheme?

For accidental death or full disability you (or your nominees/family) get INR 2 Lakhs as a lump sum payment. For partial disability you get INR 1 Lakh as a lump sum payment which you can use for treatment of the disability/injury.

How do you pay the premium for such a small amount?

  • You (subscriber) will have to renew your accidental cover under the Pradhan Mantri Suraksha Bima Yojana scheme before the 1st of June each year by filling up a simple form.
  • You can also opt for the long term option say 2 to 4 years by ticking it in the form. The bank will then auto debit the premium directly from your bank account each year. This saves you the hassle of renewing your accident insurance cover each year.

Where can you insure yourself under the Pradhan Mantri Suraksha Bima Yojana scheme?

The scheme is offered by all the Public Sector General Insurance Companies through tie ups with banks.

  • New India Assurance Company.
  • Oriental Insurance Company.
  • National Insurance Company.
  • United India Insurance Company.

Other insurers are also expected to join in the Pradhan Mantri Suraksha Bima Yojana scheme.

When will the Pradhan Mantri Suraksha Bima Yojana scheme be launched?

This scheme is expected to be launched on 1st June 2015.

What about the tax benefits you get under the Pradhan Mantri Suraksha Bima Yojana scheme?

The premiums you pay for the scheme will be tax free under Section 80 C of the income tax act. The death benefits your nominees get or the money you get on partial/full disability will be tax free (exempt from tax) under Section 10(10D) of the income tax act. If you/nominee’s get more than INR 1 Lakh from the insurance policy as death/disablement benefit then TDS (Tax Deducted at Source) will be deducted at the rate of 2% from the totalproceeds you get from the insurance policy scheme.No TDS will be deducted from the proceeds of the insurance policy(Amount you get on partial/full disability or the death benefits your nominees get)if the form 15 G or form 15 H in case of senior citizens, is submitted to the Insurer. Remember:You must never step out of your home without an accident insurance policy. If you need accident insurance, then so does your maid and driver and you must consider purchasing accident insurance under Pradhan Mantri Suraksha Bima Yojana scheme for them.

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