PSBs, insurers seek higher sum assured for social security schemes

PSBs and insurers have urged the finance ministry to raise the sum assured under PMJJBY and PMSBY, citing inflation and household vulnerabilities, as India targets "Insurance for All by 2047"

Stakeholders, including public sector banks and insurance companies, have urged the finance ministry to increase the sum assured under key social security insurance schemes, such as the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and the Pradhan Mantri Suraksha Bima Yojana (PMSBY), amid inflationary pressure and increasing household vulnerabilities.

 

The meeting convened by the Department of Financial Services (DFS) last month was also attended by the Insurance Regulatory and Development Authority of India (Irdai) and ministries including the Ministry of Rural Development (MoRD) as part of the government’s push to achieve the goal of “Insurance for All by 2047”.

 

“There is a clear view that while coverage has expanded significantly, the sum assured under micro-insurance products may need an upward revision to remain meaningful,” a senior government official said.

 

An email sent to the Finance Ministry remained unanswered until press time.

 

PMSBY has recorded enrolments of 562 million, while PMJJBY enrolments stand at 263 million. Digital enrolments through the Jan Suraksha portal have further streamlined access to these schemes.

 

In the agriculture segment, the Pradhan Mantri Fasal Bima Yojana (PMFBY) has provided coverage to 55 million farmers, including 53 million during the Rabi season, reflecting continued participation in crop insurance. Meanwhile, Ayushman Bharat IDs have crossed 80 million, strengthening the health insurance ecosystem.

 

However, sources indicated that despite progress, “substantial gaps” remain in achieving comprehensive insurance inclusion. 

 

"Suggestions received during deliberations noted that schemes such as Jan Jeevan Bima Yojana (JJBY), Suraksha Bima Yojana (SBY), Fasal Bima and Ayushman Bharat are enhancing inclusion, but more needs to be done to deepen penetration, particularly in underserved regions," said the official.

 

The official further added that expanding insurance options beyond the basic coverage offered by the Ministry of Rural Development (MoRD) and increasing coordination with state governments to drive enrollment are also under discussion. “Involving the state machinery more actively can significantly improve coverage penetration,” the official said.

 

Another critical area flagged was the need to make claim settlements more hassle-free. “Ease and timeliness of claim payments are central to building trust among beneficiaries,” an official noted, adding that simplifying documentation and leveraging digital platforms would be vital.

 

"Government may think to subsidise micro-insurance premiums further, with support from both central and state governments, to prevent drop-offs due to affordability concerns," the official added.

 

The official also underlined that the role of the regulator and industry bodies would be crucial in the next phase of expansion. The involvement of Irdai, along with the Life Insurance Council and the General Insurance Council, was described as “critical” for designing innovative products, improving grievance redressal, and ensuring sustainable growth.

 

“The objective is not merely enrollment numbers but meaningful financial protection,” another government official emphasised. “As we move towards 2047, insurance coverage must be adequate, accessible and affordable.”