This perhaps would qualify as the best move by the BJP government and clearly deserves praise, not only for the foresight of the powers that be, but also because at the ground level, this step may go a long way in turning around the lives of the nation's citizens for generations to come.
Prime Minister Narendra Modi, on Saturday unveiled three ambitious Social Security Schemes pertaining to the insurance and pension sector. In his inaugural address he said that the poor citizens would be given empowerment and not help. And that in my opinion is exactly what India needs to do.
The three ambitious Social Security Schemes are definitely a path breaking initiative towards providing affordable universal access to essential social security protection in a convenient manner linked to an auto-debit facility from the bank accounts of the subscribers, who wish to avail of the scheme.
The three schemes launched, namely Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and Pradhan Mantri Suraksha Bima Yojana (PMSBY would provide insurance cover in the unfortunate event of death by any cause or disability due to an accident respectively , whereas the pension scheme, Atal Pension Yojana (APY), would address old age income security needs.
Simply put, the PMSBY will offer a renewable one year accidental death cum disability cover of Rupees Two Lakh (Rupees One Lakh for partial permanent disability) to all savings bank account holders in the age group of 18 to 70 years for a premium of Rs. 12/- per annum per subscriber. The scheme would be offered / administered through Public Sector General Insurance Companies (PSGICs) or other General Insurance companies willing to offer the product on similar terms on the choice of the Bank / RRB / Cooperative Bank concerned.
The PMJJBY on the other hand will offer a renewable one year life cover of Rupees Two Lakh to all savings bank account holders in the age group of 18 to 50 years, covering death due to any reason, for a premium of Rs. 330/- per annum per subscriber. The scheme would be offered / administered through LIC or other Life Insurance companies willing to offer the product on similar terms on the choice of the Bank / RRB / Cooperative Bank concerned.
While APY, the third scheme, will focus on the unorganised sector and provide subscribers a fixed minimum pension of Rs. 1000, 2000, 3000, 4000 or Rs. 5000 per month starting at the age of 60 years, depending on the contribution option exercised on entering at an age between 18 and 40 years. Thus, the period of contribution by any subscriber under APY would be 20 years or more. The fixed minimum pension would be guaranteed by the Government.
While the scheme is open to back account bank account holders in the prescribed age group, the Central Government would also co-contribute 50% of the total contribution or Rs. 1000 per annum, whichever is lower, for a period of 5 years for those joining the scheme before 31st December, 2015 and are not members of any statutory social security scheme and are not income tax payers.
The convenient delivery mechanism of the schemes are also well designed and is expected to address the situation of very low coverage of life/accident insurance and old age income security products in the country.
All said and done, this is a masterstroke. The only thing the government will here-forth have to insure is that claim settlements will come with the same ease as that of taking the policy. Perhaps a 15 days deadline for claim settlements should be made mandatory. Then it would qualify to become a 'Super Masterstroke'.