Salient Features of The Pradhan Mantri Jeevan Jyoti Bima Yojana

When we begin earning, we are taught about the importance of investing in different insurance policies. We buy insurance to protect the financial interests of our loved ones in the form of life insurance as well as health, medical, vehicle and accidental insurance. Paying the premiums of these insurance policies can set us back by several thousands. However, there are certain sections of the society who cannot afford insurance at all since every rupee earned goes towards sustenance. Keeping this in mind, the Prime Minister of India, Shri Narendra Modi launched the Pradhan Mantri Jeevan Jyoti Bima Yojana in 2015. Here are the salient features of the scheme.

Your family gets life insurance coverage of ₹200,000 under the policy

As is apparent by the words ‘Jeevan’ and ‘Bima’, The PM Jeevan Jyoti Bima Yojana is a life insurance policy. Life insurance policies are those that are meant to benefit the kin of the policy holder, and not the policy holder per se. The policy holder’s kin is provided with a maximum amount of ₹200,000 in the event of the untimely death of the policy holder under natural circumstances or due to accident or murder.

The policy can be purchased by paying a very small annual premium

The PMJJBY insurance scheme is perhaps the most affordable life insurance scheme in the world. You can purchase this life insurance policy by paying a tiny sum of ₹330 annually. The premium amount was decided keeping in mind that insurance should be made affordable for people of the lowest income groups across India.

The eligibility criteria are quite basic

In order to be eligible for the PMJJBY scheme, you need to be a resident Indian, belonging to the age group of 18 and 50 years. You also need to have any active savings bank account, including accounts like the PM Jan Dhan Yojana Account – a zero balance savings account provided by the government. Furthermore, you need to link the savings account (for premium deduction purposes) and your Aadhaar card to the scheme. Since this is an insurance scheme, you might be required to provide a self-attested medical certificate stating that you are in good health, to qualify for this scheme.

The policy is a term policy with validity of 1 year

The PMJJBY policy is a limited period, annual insurance policy, with a validity period of one year. This means that you need to renew the policy every year. The renewal amount remains the same every year. In case you are unable to renew the policy, you do not have to worry about paying any penalties. The policy will simply be suspended and you can renew the same policy once again whenever you have the financial resources to do so.

You can avail tax benefits under this scheme

The Government of India offers tax benefits of ₹150,000 on all kinds of investments, as per Section 80C of the Income Tax Act of India. Since insurance is regarded as an investment, you can get tax benefits for investing in the Pradhan Mantri Jeevan Jyoti Bima Yojana as well. Note that you need to provide the relevant Form 15G/15H to get this benefit, failing which you would be required to pay a tax of 2% on all insurance premiums, if the premium amounts exceed the sum of ₹100,000 per annum.

Final Word: The PMJJBY scheme has indeed made it possible for people from all economic backgrounds to afford insurance. Life insurance helps safeguard the financial interest of your loved ones in your absence, so you must considering investing in this policy.