FinMin working to double the life insurance cover under the PMJJBY

The Union finance ministry is working on a proposal to double the life insurance cover under its flagship financial inclusion insurance scheme, the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), said a senior government official. 

 

As part of this revamp, a revision in premiums is also under consideration. “Under the proposed plan, the life insurance cover under PMJJBY, which currently provides a one-year term life cover of ₹2 lakh for individuals aged 18-50 years, may be doubled to ₹4 lakh.  

However, the annual premium, which is currently ₹436 per subscriber, could also be increased to ₹700–800,” the official said. The official said the government was also considering expanding coverage under the Pradhan Mantri Suraksha Bima Yojana (PMSBY), details of which are yet to be finalised. 

“The government is still in the process of gathering feedback and assessing the feasibility of the proposed enhancements,” the official said. An email sent to the finance ministry remained unanswered till the time of going to press.The official added that the key concern being examined was the affordability of higher premiums, especially among low-income segments. 

“Feedback from public-sector banks (PSBs) indicates there is already some resistance from customers to the existing ₹436 premium. Without an upward revision, it would be difficult to sustain or expand the scheme,” the official added.The PMJJBY is a government-backed life insurance scheme aimed at providing coverage for death due to any reason.  

It offers a one-year renewable cover, administered through Life Insurance Corporation (LIC) and other approved life insurers in partnership with participating banks or post offices. As on April 23, 2025, more than 236.3 million people had enrolled, and ₹18,398 crore had been disbursed for 920,000 claims. 

The PMSBY is an accident insurance scheme that provides coverage of up to ₹2 lakh for accidental death or disability at a nominal premium of ₹20 per annum. It offers a one-year renewable cover and is administered through Public Sector General Insurance Companies (PSGICs) and other approved general insurers in collaboration with participating banks or post offices. 

Individuals aged 18-70 years holding a bank or post office account and who give consent to auto debit are eligible to enrol through only one account, even if they have multiple.As of April 23, 2025, over 510.6 million people have enrolled under the scheme, and ₹3,121 crore has been paid out against 157,000 claims. 

The PSBs have fallen short of achieving the annual targets of the two flagship insurance schemes for social security, PMSBY and PMJJBY, according to government data reviewed by Business Standard. 

Till October 2024, while PSBs had achieved only 40 per cent of their annual enrolment target of 64 million for PMSBY, they had met just 30 per cent of the 41 million target for PMJJBY. 

Among PSBs, Bank of India had the lowest achievement with only 11 per cent of the target, followed by UCO Bank (14 per cent), Bank of Maharashtra (24 per cent), and Union Bank of India (24 per cent). State Bank of India (SBI) and Indian Bank had the highest enrolment percentages, 60 per cent and 45 per cent, till October 2024, respectively. 

The annual report of the Insurance Regulatory and Development Authority of India (Irdai) reported a worrying fall in insurance penetration, including both life and non-life, which fell to 3.7 per cent in financial year 2023-24 from 4 per cent in the preceding year.  

Life insurance penetration declined to 2.8 per cent of GDP in FY24, compared to 3 per cent in FY23.  India's insurance penetration remains significantly lower than the global average of 7 per cent in 2023, which rose from 6.8 per cent in 2022. 

Insurance penetration peaked at 4.2 per cent during the pandemic in 2021-22 but has since declined. The Irdai report highlighted that low penetration reflects a lack of widespread insurance coverage, which is a concern in a rapidly  developing economy.   

Coverage boost 

As part of the revamp, revisions in PMJJBY premiums are  under consideration 

Annual premium of PMJJBY, currently at ₹436 per subscriber; it may be increased to ₹700-800 

The government is also mulling expanding the coverage under the Pradhan Mantri Suraksha Bima Yojana 

Insurance penetration in India peaked at 4.2% in 2021-22 but has since declined