October 2019 - Page 4 of 8

Complete Guide on Insurance Underwriter – Role & Responsibilities

October 20, 2019February 25, 2022 Ankita Sejpal

Insurance plans undertake to compensate you for the financial loss that you suffer in case of eventualities and emergencies. The policy covers a specific type of risk and when you suffer from the covered risk, the loss suffered is covered under the plan. The risks covered by insurance policies should be uncertain in nature. When the risks are certain, the loss is certain which results in claims. Too many claims result in a loss for the insurance company. That is why the insurance company tries to find out the probability of claims in a policy before issuing it. This is where the underwriter comes into the picture.

Underwriting of an insurance policy means assessing the risk under the policy. When you approach the insurance company to buy an insurance policy, the company would, first, assess the risk that the company is undertaking to ensure. This assessment of risk is done by an insurance underwriter. An insurance underwriter, therefore, is the individual tasked with the duty to assess the risk of the insurance proposal before issuing the policy.

To assess the risk, the insurance underwriter peruses the details mentioned in the proposal form. After checking the details and verifying the documents that you submit, the insurance underwriter takes a decision to accept or reject the policy. The aim of the insurance underwriter is to judge how profitable the policy would be for the insurance company. Profitability depends on the probability of a claim. The lower the chances of claim in the insurance policy the higher would the policy be profitable.

Role of an insurance underwriter:

An insurance underwriter performs the following roles –

Assesses the proposal of insurance to determine whether the policy would be issued or not
Fixing the premium for the policy depending on the underlying risk
Finding additional information, if required, before issuing the policy to determine the risk correctly
Imposing coverage limitations in case the underlying risk is higher
Ascertaining the best coverage terms and premium rates at which the policy can be issued so that the policy is profitable for the insurance company

Insurance underwriter vis-à-vis broker or advisor

An insurance underwriter is often confused with a broker/advisor. However, underwriters are different from brokers/ advisors in the following respects –

Insurance underwriter	Insurance brokers/advisors
An underwriter is a person responsible for the insurance policy to be issued	An insurance broker/advisor is the person responsible for the sale of the insurance policy
The underwriter represents the insurance company and aims to increase the profitability of the company	The broker/advisor represents you, the policyholder, and aims to help you fulfil your insurance needs
The insurance underwriter fixes the premium to be charged	The advisor has no control over the premium of the policy
The underwriter can reject the issuance of the policy	The agent cannot control whether the policy is issued or not
Insurance underwriters are highly trained individuals with complete knowledge of insurance and its technical aspects	Insurance brokers/advisors are also trained but, compared to underwriters, they have limited knowledge and skills

Insurance brokers/advisors are tasked with sourcing an insurance policy while insurance underwriters determine whether the sourced policy would be accepted by the insurance company or not. Thus, underwriters are different from insurance advisors or brokers and should not be confused with them.

Difference between insurance underwriter and surveyor

Another common misconception that many have is that insurance underwriters and surveyors are the same. They are not. Both insurance underwriters and surveyors are different from one another and they have different roles to play. Let’s understand the difference –

Insurance underwriters	Insurance surveyors
The job of insurance underwriters is at the time of issuance of the policy	Insurance surveyors come into the picture when there is a claim
Underwriters determine the risk under a proposal for insurance.	Surveyors determine the cause of claim and the loss suffered
Insurance underwriters determine the coverage terms and the premium rate of an insurance policy	Insurance surveyors determine the amount of claim which would be paid by the insurance company

Both insurance underwriters and surveyors are expert individuals trained in their respective fields however their jobs are different. Insurance underwriters are concerned with the issuance of policy while surveyors are concerned with policy claims.

Underwriting of an insurance policy can be done by an individual or a team of underwriters but the policy is issued only when underwriting is done. The need for underwriting arises both at the time the policy is bought as well as on renewals. On renewals, the insurance underwriter rechecks the risk under the policy and offers the renewal terms and conditions.

Any type of insurance policy that you buy, remember that the policy would be issued to you after it has been underwritten. Insurance underwriting is an important step of the purchase process and you should, therefore, understand what it means.

Frequently Asked Questions

Can an underwriter increase the premium rate?
Yes, if the underwriter feels that the risk is high, he/she might increase the premium rate by charging an additional loading on the premium.
Does the underwriter determine the coverage level?
The coverage level under general insurance policies depends on the value of the asset. However, under life insurance plans, where human life cannot be valued, the maximum coverage level which would be allowed to you is judged by the insurance underwriter. The underwriter does financial underwriting to check your income and estimate the maximum life cover that you can avail. Based on the underwriter’s estimation the maximum coverage level for your life insurance policy is determined.
How long does it take for underwriting an insurance policy?
The time taken for underwriting depends on the type of policy that you buy and the risk factors. In case of insurance plans which have a lower coverage level, underwriting is done quickly and the policy is issued. However, in cases where the coverage level is very high, the insurance underwriter has to make sure that the risk is not very high because in case of claims the company would face a substantial financial loss. Thus, for high-risk cases or for cases when the coverage level is high, insurance underwriting takes time.

What Is Co-pay, Deductible & Coinsurance and How They Work?

October 20, 2019April 21, 2021 Rupanjali Mitra Basu

Health insurance is an important aspect of financial planning. When it comes to buying health insurance, terminologies used in health insurance products can be confusing. If you have to buy the best health insurance plan at a cost-effective rate, it’s important to understand various terms used such as co-pays, deductibles and coinsurance and how these elements are going to affect your insurance cost.

In many health insurance policies, you are allowed to share the cost with the insurance company in various ways. Co-pay, deductibles and coinsurance are the terms that are associated with the concept of ‘cost-sharing’ in health insurance. In this article, let’s learn more about these concepts, how they work, how they are different from each other and how these are going to affect your health insurance cost.

Co-pay

What is co-pay in health insurance?

Co-pay or co-payment in health insurance is the fixed amount paid by the insured for certain healthcare services when you avail them. The amount for each service will vary as specified in the policy document. That means, if your health insurance policy has a co-payment clause, you agree to pay a part of healthcare expenses out of your own pocket. And, the remaining cost will be covered by the insurance company. Co-payment will usually be made after the deductibles.

How does co-pay work?

Co-pay can be a fixed amount set for specific medical procedures/treatments/services or it can be mentioned in fixed percentages.

Let’s take an example to understand this. Let’s say your health insurance policy has a co-pay clause of 20% on healthcare expenses. Suppose, during a medical emergency your healthcare expenses amounts up to INR 70,000 for which you are claiming insurance. In this case, you will have to pay INR 14,000 (20% of 70,000) out of your pocket as insurance co-pay. The remaining INR 56,000 in your total healthcare expenses will be paid by the health insurance provider.

Features of co-pay health insurance

Insurance co-pay is applicable as a fixed amount or as a fixed percentage of total cost in a health insurance policy. A major part of the healthcare expenses will be covered by the insurance provider.
Higher the insurance co-pay amount or the percentage, lower will be your premium for the health insurance plan
Co-pay feature is usually applicable for almost all the senior citizen health insurance plans
Co-pay clause is applicable in different ways by various insurers depending on the scenarios.

Some insurance companies apply co-pay clause for treatments availed at the non-network hospitals.
Some insurers may apply co-pay clause depending on the city where the treatment is received.
In some health insurance policies, the co-pay clause is applicable only for the treatment of pre-existing illnesses that are covered after a specified waiting period.

Deductibles

What are deductibles in health insurance policy?

Deductibles are the amount that you have agreed to pay for covered healthcare services even before the insurance benefit kicks in. For example, if you have a health insurance plan with INR 4,000 deductibles, you need to first bear the healthcare expenses of INR 4,000 before you make a claim with your insurance company. Once, deductible amount INR 4,000 is met, if the co-pay or coinsurance is applicable for your policy that needs to be paid. And the remaining cost will be settled by the insurance company. Policies with higher deductibles will have a relatively lower premium and vice versa.

Coinsurance

What is coinsurance in health insurance policy?

Coinsurance is an agreement between the insurance company and the insured to share the cost of covered healthcare services in a certain percentage such as 70/30, 80/20 and 90/10. Coinsurance will be applicable after the payment of deductibles if any. For example, your health insurance policy has a coinsurance ratio of 90/10. In a medical emergency let’s say your medical bill amounts up to INR 50,000. In this case, as per coinsurance clause applicable, INR 45,000 will be paid by your insurance company and INR 5,000 will be paid by you.

Difference between co-pay and coinsurance

In India, co-pay and coinsurance are used interchangeably. Basically, co-pay is sharing the fixed amount (percentage of total cost) of healthcare services out of claim amount with the insurance company. Coinsurance is an agreement between the insurer and insured in a ratio of a certain percentage to share the covered healthcare services.

List of health insurance plans with co-pay feature

Name of the Company	Co-payment
Bajaj Allianz General Insurance Company	20% co-payment for policyholders of Zone B (non-metro) cities
National Health Insurance Company	20% co-payment for admissible claims at non-network hospitals and co-payment is applicable for policyholders aged 60 years and above
Aditya Birla Health Insurance Company	20% co-payment for policyholders aged 61 years and above
Oriental Health Insurance Company	20% co-payment in Health of Privileged Elders plan
SBI General Insurance Company	10% co-payment

To sum up, health insurance has become an important necessity with the rapidly rising healthcare cost. These cost-sharing methods need to be carefully considered with its pros and cons to choosing the right health insurance product at an affordable range.

Frequently Asked Questions (FAQs)

What is ‘network hospital’ in health insurance?
The insurance company is tied up with various hospitals across the country to provide cashless facility to their policyholders and these list of hospitals are called network hospitals.
What is ‘pre-existing illnesses’ in health insurance?
Pre-existing illness is a medical condition that is already present at the time of taking the health insurance policy.
What is ‘waiting period’ in health insurance?
Pre-existing illnesses and specific treatments in health insurance policies are covered only after a certain period of enrolling into the health insurance policy. This period for which benefit cannot be availed is called the waiting period.
Why do insurance companies have ‘co-pay’ clause?
Insurance companies have introduced an insurance co-pay clause for the following reasons
- Insurance co-pay clause discourages people from making unwanted claims as they need to share the fixed expenses
- Insurance co-pay clause encourages proper use of health insurance policies and its benefits
- It reduces the risk burden for the insurer
- Co-pay clause will try to prevent people from undergoing treatments in expensive hospitals just to reap the benefits of insurance.
What are the cons of insurance co-pay clause in health insurance?
Following are the cons of co-pay clause in a health insurance policy
- Co-pay health insurance policies are less popular among people as for many the clauses are confusing and difficult to understand
- For people who may have to make claims in the near future, co-pay feature can turn out to be expensive even though a premium is relatively lower

What Is Insurance Deductible and How Does It Work?

October 20, 2019April 21, 2021 Sidharth Hampanavar

Insurance works on different types of technical concepts. While the policy promises to pay you the compensation for a financial loss that you suffer, the claim involves some technical details which many of you might overlook. As a result, when the claim is delayed or not paid in full, you are disappointed. That is why it becomes important to understand all the technical terms and conditions with respect to your insurance claims. A deductible is one such concept which needs your attention. Do you know what insurance deductibles are?

What is an insurance deductible?

An insurance deductible represents the amount of claim which you have to pay. The deductible, therefore, is your out-of-pocket expenses in each and every instance of claim. The insurance company pays the claim which is in excess of the deductible limit. For instance, if, in an insurance policy there is a deductible of INR 3000 and you make a claim of INR 10,000, the insurance company would pay only INR 7000 while you have to foot the deductible of INR 3000.

How do insurance deductibles work?

In many types of insurance policies, there is a predefined deductible limit. This limit is communicated to you through the policy brochure and policy wordings when you buy the plan. The company states that claims exceeding the deductible would be paid. When you suffer a loss, the claim for the insurance company would be triggered only if the claim exceeds the deductible. In such cases, the insurance company would pay the excess claim and you shoulder the deductible amount yourself.

Where are insurance deductibles applicable?

The following types of insurance policies have insurance deductibles built into their terms and conditions:

Motor insurance policies
Travel insurance policies
Fire and property insurance policies
Health insurance policies, etc.

Types of insurance deductibles

Insurance deductibles can be of two types – compulsory and voluntary. Compulsory deductibles are those which are compulsorily applied by the insurance company. You have no control over them and have to bear them in case of claims. Voluntary deductibles, on the other hand, are those which you can choose yourself. If you choose a voluntary deductible limit, you choose to pay a part of the claim yourself. In such cases, the insurance company allows you a premium discount as you reduce the claim liability for the company. Voluntary deductibles are, however, treated over and above the compulsory deductible. If the plan already has a compulsory deductible and you also choose a voluntary deductible, you would have to bear both the deductibles at the time of claims. Choosing a voluntary deductible does not remove the compulsory deductible.

Why insurance deductibles are relevant?

There are two main reasons why insurance companies impose a deductible under the policy. These reasons include the following –

To discourage you from making smaller claims on your policy. Since you would have to bear the deductible, companies believe that smaller claims would not be made on them and they can reduce their claim liability
To prevent reckless claims from policyholders and to minimise losses due to moral hazard. When there is a deductible, you would be careful in raising a claim as you would also incur out-of-pocket expenses. Moreover, people intending to profit from insurance claims would be discouraged in buying the policy

Deductibles vis-à-vis co-payment – meaning and difference

In health insurance plans the concept of co-payment is applicable in many cases. Co-payment also means paying a part of your health insurance claim yourself. However, co-payment and deductibles are different. Here’s how –

Insurance deductible	Co-payment
Deductible, if applicable under the policy, would be applicable for all customers	Co-payment is applicable only in certain instances. It is not applicable to all policyholders
Deductibles are usually found in top-up or super top-up health insurance plans. Under these plans, the choice of the deductible is in your hands.	Co-payment is found in almost all health insurance plans. This is usually applicable if the insured member is aged 60 years and above
Under normal health insurance plans, deductibles might be offered as an option and if you choose the deductible you can avail premium discounts	There are no premium discounts for co-payment and co-payment is not optional. It is compulsory for the cases where co-payment is applicable. For instance, if the insured is aged 60 years and above or if the policy is bought in a non-metro city and the claim is made in a metro city the co-payment would be compulsory.

So, though both concepts infer your out-of-pocket expenses, they are quite different from one another in terms of their relevance and meaning.

Amount of insurance deductible

The amount of deductible applicable to insurance plans depends on the type of plan that you buy and the insurance company’s discretion. Only in case of motor insurance plans, the deductible limits are fixed. For two-wheeler insurance plans the deductible is INR 50 and for four-wheelers, the limit is INR 500 for cars with engine capacities up to 1500 cc and INR 1000 for cars having a higher capacity. In other types of insurance plans, the deductible limits vary across plans and companies.

What you should do?

When you are buying an insurance policy, check for insurance deductibles. If the policy has deductibles, compare and choose a plan which has the lowest deductibles. A lower insurance deductible means a lower out-of-pocket expense for you and so you should try and choose plans which have limited or low deductibles to reduce your claim burden.

Frequently Asked Questions

Can I avoid insurance deductibles?
No, you cannot. If the insurance policy has deductibles those deductibles would be compulsory and you would have to bear them. You can only avoid voluntary deductibles, not compulsory ones.
Are deductibles expressed only in amount?
No, deductibles can be expressed as a percentage of the total claim or in hours also. For instance, in travel insurance policies, a deductible of 6 to 12 hours is applicable in case of delay of checked-in baggage or missed flight connection. In such cases, the delay should be more than the specified deductible period for your claim to be valid. Similarly, in fire insurance policies, architect, surveyor’s or engineer’s fee can be covered as an optional cover if it is in excess of 3% of the claim amount. In these cases, the deductible is expressed in a percentage of the claim amount.
Do life insurance plans have deductibles?
No, deductibles are not applicable for life insurance plans.
How do deductibles work under top-up health plans?
Under top-up health plans, you choose a sum insured and a deductible limit. If any claim exceeds the chosen deductible limit, the policy pays the excess claim. For instance, if you choose a deductible of INR 1 lakh and you face a claim of INR 1.5 lakhs, the top-up plan would pay INR 50,000 as a claim.

Types of Car Insurance Plans

October 20, 2019April 21, 2021 Rupanjali Mitra Basu

If you own a car in India, you would have to get your car covered under a car insurance policy. This rule has been made mandatory as per the Motor Vehicles Act, 1988. As per the Act, every vehicle, including a car, should have a valid insurance cover on it. If not, you, the owner would be held responsible for violating traffic rules and face heavy penalties.

Given the necessity of a valid insurance cover, there are different types of car insurance policies available in the market. Let’s understand what these policies are –

Types of car insurance based on the type of car

There are two types of car insurance policies based on the type of car that is being insured – private car insurance policy or commercial vehicle policy. Private car insurance plan covers privately owned four-wheelers while commercial car insurance plans cover taxis and other commercially used cars.

Types of car insurance based on coverage

This is, perhaps, the most common and popular basis on which car insurance policies are differentiated. Based on the coverage offered, there are two types of car insurance plans –

Third-party liability only plans
Comprehensive plans

Let’s understand these plans in details –

Third-party car insurance plans

Third-party policies cover the legal and financial liability that you face when you hurt or damage another individual due to your car. The policy covers the following types of claims –

Financial liability faced when an individual gets killed due to your car
Financial liability faced when an individual gets hurt by your car
Financial liability faced when you damage an individual’s property

Third-party plans are mandated by the Motor Vehicles Act, 1988. If you have third party coverage on your car, you are fulfilling the required rule of the Act.

Comprehensive car insurance plans

While third party plans are legally compulsory, comprehensive car insurance plans are voluntary in nature. You can choose to buy the policy for a wider coverage on your car. Comprehensive car insurance plans are recommended because they also cover the damages suffered by your car beside the third party liability that you face. Thus, in comprehensive plans, you get coverage for the following contingencies –

Financial liability faced when an individual gets killed due to your car
Financial liability faced when an individual gets hurt by your car
Financial liability faced when you damage an individual’s property
Financial loss suffered when the car is damaged by natural causes like lightning, earthquake, floods, storms, cyclones, landslides, etc.
Financial loss suffered when the car is damaged by man-made causes like explosion, implosion, fire, malicious activities, riots, etc.
Financial loss suffered when the car is stolen
Financial loss suffered when the car is damaged while being transported

Comprehensive car insurance plans, therefore, have a wider scope of coverage and cover third party liability as well as damages suffered by the car.

There is also a mandatory personal accident cover which is available in both third-party and comprehensive car insurance policies. This cover is available for INR 15 lakhs and covers accidental death and permanent disability suffered due to an accident.

Types of car insurance plans based on coverage duration

As per a rule passed by the Insurance Regulatory and Development Authority of India (IRDAI), if you buy a car on or after 1st September 2018, you would have to buy a long-term car insurance plan on it. The rule mandates a long-term third party cover for three years and so, based on the rule, the following types of car insurance plans are available in the market –

Long term liability-only policy

This policy covers only third party liabilities for a continuous period of three years

Long term comprehensive policy

This policy is a comprehensive car insurance plan which is offered for a period of three years

Bundled policy

Since a long-term comprehensive cover might prove unaffordable for car owners, a bundled policy is also issued. Under the bundled policy, third party liability cover is allowed for three years while the comprehensive cover is allowed for one year.

For cars bought before 1st September 2018, one-year third party or comprehensive cover is valid.

Thus, car insurance policies can be differentiated on the following types –

Making a claim under different types of car insurance plans

Claims under car insurance policies depend on the coverage offered by the policies. Thus, it is important to know the process of making a claim under each type of plan. So, here’s a brief look into the claim process of the third party and comprehensive plans –

Claim under third party policies

In the case of third party policies, the claim is reported to the Motor Accidents Tribunal where the financial liability is decided. The process is as follows –

- Inform the insurance company as soon as the claim occurs
- File a police FIR and the claim would be taken to the tribunal
- The tribunal rules out the liability that you face and the insurance company pays the liability to the third party

Claim under comprehensive policies

Under comprehensive policies, third party claims are made as per the above-mentioned process. However, if your car suffers damage, the claim process is as follows –

- Inform the insurance company immediately. The company then tells you the location of the nearest garage where you can claim cashless repair services
- Take your car to the networked garage of the company where a surveyor would assess the damage and prepare a claim report
- Based on the surveyor’s report the insurance company approves the claim. Once the claim is approved, repairs on your car begin
- After the repairs are done the insurance company settles the bill directly with the garage. You might have to pay a part of your claim after which you can take delivery of your car
- In case you get the repairs done at a non-networked garage, you have to bear the repair costs and then get the costs reimbursed by the insurer

Customising your car insurance policy through add-ons

Comprehensive policies offer different types of car insurance add-ons. You can add these add-ons to increase the coverage benefits of your policy. Some of the most common and popular add-ons include the following –

Roadside assistance

Under this add-on, you get the promise of round the clock assistance from the insurance company for any car breakdowns that you face

Zero depreciation

This add-on enhances the claim payable under the policy by removing the deduction for depreciation on the parts of the car which have been repaired or replaced

No Claim protect

This add-on protects the accumulated no claim bonus under your car insurance policy even after you make a claim

Engine protect

The add-on covers engine damages which happen due to water seepage into the engine

Return to invoice

The add-on pays the invoice value of the car in case of theft

Medical expenses

In case of an accident involving your car if you are hospitalised and incur medical expenses, the expenses would be covered under the add-on

Amidst the different types of car insurance plans available in the market, choose the policy which suits your coverage needs. A comprehensive cover is recommended as it pays for the repair costs of your car. You can also increase the coverage with available add-ons and enjoy a wider insurance cover. Since car insurance is mandatory, choose the best plan and avoid legal hassles.

Frequently Asked Questions

Do add-ons require additional premiums?

Yes, since add-ons provide additional coverage, they require additional premiums. For each add-on that you choose you would have to pay an additional premium.

Will there be premium discounts if I buy three-year comprehensive coverage?

Yes, various types of premium discounts are allowed under comprehensive car insurance plans. You can claim a discount for the following –

- Long term coverage
- Installing safety devices
- Becoming a member of automobiles associations
- Modifying the car for disabled users
- Choosing voluntary deductible
- Existing no claim bonus

What is the premium for personal accident cover?

A personal accident cover for INR 15 lakhs costs INR 750

If I don’t buy comprehensive plan would I face a penalty?

No, if you have bought only a third party liability policy, you would not suffer any penalty for not buying a comprehensive plan. However, if your car faces any damage, you would incur huge repair costs in the absence of a comprehensive car insurance policy.

Compare PMJJBY And PMSBY

October 20, 2019April 21, 2021 Ankita Sejpal

The Government of India has come up with many social security schemes for individuals and households in order to provide financial security. Pradhan Mantri Bima Yojana is mainly introduced with an objective of providing financial protection against illness, accident or death, specifically for an underprivileged and uninsured section of the society. There are mainly two Bima Yojanas introduced by the Modi-led government.

You can apply for Pradhan Mantri Bima Yojana online through authorised bank’s net banking facility. Let’s take a look at the various Pradhan Mantri Bima Yojana available for enrolment.

Pradhan Mantri Suraksha Bima Yojana

Pradhan Mantri Suraksha Bima Yojana is introduced by the Government of India to provide accidental death coverage to a larger uninsured section of the society.

Highlights of Pradhan Mantri Suraksha Bima Yojana

Any Indian citizen between the age of 18 years and 70 years can enrol into this scheme
Individual must have a savings account from where he can give consent to auto-debit the premium amount
The policy is issued for one year period starting from 1st June to 31st May of the next year. Yearly renewal can be done. You can also opt for long-term enrolment with auto-debit of premium every year.
The premium for the policy is a minimal amount – INR 12 per annum. The contribution has to be made for a minimum of 20 years
Aadhaar details and mobile number are important KYC requirement for the enrolment

- The scheme provides coverage of INR 1 lakh for partial disability and INR 2 lakhs for complete disability or death. The amount will be paid to the designated nominee in case of death
- Total risk coverage provided under the scheme is INR 2 lakhs
- Following are the benefits offered by the scheme:

Events insured	Amount of sum insured
Accidental death	INR 2 lakhs
Total and permanent loss of both eyes or loss of both hands/feet or loss of sight of one eye and loss of one hand/feet	INR 2 lakhs
Total and permanent loss of sight of one eye or loss of one hand/feet	INR 1 lakhs

Main exclusions under the scheme are – suicide or attempted suicide, alcohol and drug abuse, self-inflicted injury and breach of law

Pradhan Mantri Jeevan Jyoti Bima Yojana

Pradhan Mantri Jeevan Jyoti Bima Yojana is a life insurance scheme introduced by the Government of India. Basically, this ambitious social security scheme of the Modi Government is renewable life insurance issued for a period of one year. The coverage is offered against life risk. Pradhan Mantri Jeevan Jyoti Bima Yojana is a pure term plan with no savings component attached. That means, the benefits will only accrue to the designated nominee.

Highlights of Pradhan Mantri Jeevan Jyoti Bima Yojana

- Any Indian Individual Resident between the age of 18 years and 50 years can enrol into this scheme. The maximum maturity age under the scheme is 55 years
- Individual must have a savings account from where he can give consent to auto-debit the premium amount
- The policy is issued for one year period starting from 1st June to 31st May of the next year. Yearly renewal can be done.
- Aadhaar details and mobile number are important KYC requirement for the enrolment
- Risk cover under the scheme will commence from 45 days of enrolment into the scheme
- Simple enrolment process without any medical examination requirement
- Annual premium for Pradhan Mantri Jeevan Jyoti Bima Yojana was INR 330 for one year period. However, the premium is revised on a quarterly basis now. Following are the details:

Period	Amount of premium payable
1st quarter – June, July and August	INR 330
2nd quarter – September, October and November	INR 258
3rd quarter- December, January and February	INR 172
4th quarter- March, April and May	INR 86

Sum assured under the scheme is INR 2 lakhs which is payable to nominee in case of death of the subscriber

To sum up, Pradhan Mantri Bima Yojana helps larger section of the Indian population to cope up with the uncertainties of life. The social security net provided to people of the country will, in turn, boost the growth of the country’s economy.

Premium calculation of Postal Life Insurance (PLI) and Rural Postal Life Insurance (RPLI) plans

October 20, 2019May 9, 2022 Sidharth Hampanavar

Postal Life Insurance policies have been in effect from the year 1884 when they were launched with the approval of the Secretary of State under the British Empire. Postal Life Insurance (PLI) policies were intended to provide affordable insurance coverage to the population of India. Rural Postal Life Insurance (RPLI), on the other hand, was launched in the year 1995 as per the recommendations of the Malhotra Committee. These policies were designed to offer low-cost insurance to the rural population. Both PLI and RPLI offer a range of life insurance plans which have low premiums and offer good coverage.

Before understanding how the premiums for PLI and RPLI policies are calculated, let’s have a look at the different types of life insurance plans offered under both these categories –

Life insurance plans under Postal Life Insurance:

Name of the plan	Type of plan	Salient features
Suraksha	Whole life plan	Coverage up to 80 years The plan earns bonus Sum assured and bonus are paid either on maturity after attaining 80 years of age or on earlier death
Santosh	Endowment plan	The loan can be availed after 3 years The plan earns bonus
Suvidha	Convertible whole life plan	The plan is a whole life plan which can be converted to endowment after five policy years Bonus is added to the plan
Sumangal	Money-back plan	Policy term can be 15 or 20 years 20% of the sum assured is paid as money back benefit periodically
Yigal Suraksha	Joint life endowment plan	Both husband and wife can be covered under a single plan The death benefit is paid if either of the spouses dies
Bal Jeevan Bima	Child plan	The policy covers minor children Premiums are waived if the parent dies The plan continues until maturity even after the parent’s death and pays the maturity benefit The policyholder’s two children are eligible for coverage

Life Insurance plans under Rural Postal Life Insurance

Name of the plan	Type of plan	Salient features
Gram Suraksha	Whole life plan	Whole life insurance plan that can be coverted to an endowment plan after 5 years Coverage up to 80 years of age On maturity the sum assured and bonus is paid On death before 80 years, the sum assured and accrued bonus are paid A loan facility is available after 4 years of the policy term
Gram Santosh	Endowment plan	Sum assured of up to INR 10 lakhs can be availed Bonus is added under the plan Loan facility after 3 years
Gram Suvidha	Convertible whole life plan	The plan can be converted to endowment after five years of buying the policy Bonus is added to the plan’s benefits A nominee will receive the assured sum in case of death
Gram Sumangal	Money-back plan	Money-back benefits pay a part of the sum assured at periodic intervals In case of death, the full sum assured with bonus is paid irrespective of money back benefits already paid
Gram Priya	Money-back plan	The policy has a fixed tenure of 10 years 20% of the sum assured is paid at the end of the 4th and 7th policy years Bonus is also added to the plan There will be no interest on premiums during year of flood, drought, or earthquake
Bal Jeevan Bima	Child plan	Up to two children can be covered under the plan If the parent dies the premiums are waived off but the coverage continues

Who can buy Rural Postal Life Insurance and Postal Life Insurance plans?

Indian citizens who are employed with any of the following organisations can buy PLI insurance plans –

Central or State Government
Defence services or para military forces
RBI
Local bodies
Education institutions which are aided by the Government
Public sector companies
Financial institutions
Autonomous bodies
Banks which have been nationalised
Scheduled commercial bank employees
Co-operative society employees
Employees working in deemed universities
Professionals
Employees who work in companies listed in the NSE or BSE in specified sectors

For RPLI insurance plans, the individual should live permanently in a rural area and should be an Indian citizen.

Rural Postal Life Insurance and Postal Life Insurance calculators

RPLI and PLI calculators can be of two types – RPLI and PLI maturity calculator and RPLI and PLI premium calculator. Let’s understand these two calculators in details –

RPLI and PLI maturity calculator

On maturity of both RPLI and PLI insurance plans, the sum assured chosen and the accrued bonuses are paid. Since bonus is not guaranteed or fixed, the exact maturity amount cannot be calculated in advance.

RPLI premium calculator

There is no specific RPLI calculator to calculate the premiums of RPLI insurance plans. There are, however, premium tables which give the monthly premiums payable for RPLI plans. The premium tables for different plans are different. For instance, the premium tables of Gram Suvidha and Gram Sumangal are as follows –

How to use PLI & RPLI calculators?

In order to use the PLI insurance calculator, follow the below-given steps-

Visit the official website of Postal Life Insurance
Next, click on the ‘Buy Policy’ button which is placed in the right-hand corner of the page
You will be redirected to a new page where you will need to fill in your details correctly
Once the form is filled up, enter the captcha image and click on the ‘Get Quote’ button
The postal life insurance website will now display the monthly premium on the policy

For accessing the RPLI calculator, the following steps are needed to be followed:-

Visit the official website of India Post
Scroll down to Postal Life Insurance and click on it
Once you click on ‘Ok’, you will be redirected to an external website
Click on ‘Quote’ under the Purchase a Policy tab
Next, fill up all the required details like Name, Occupation, Age, product type (RPLI in this case), etc along with the name of the policy
Then fill up the image captcha and click on ‘Get Quote’
The page with monthly, quarterly, half-yearly, and yearly premium details opens up

Premium table for Gram Suvidha for sum assured of INR 1 lakh

Entry age	Monthly premium per INR 1000 sum assured if the plan is converted to endowment	Monthly premium per INR 1000 sum assured if the plan is not converted and matures at 60 years of age
30 years	INR 205	INR 305
35 years	INR 250	INR 395
40 years	INR 325	INR 535
45 years	INR 440	INR 80

Premium table for Gram Sumangal for sum assured of INR 1 lakh

Entry age	Monthly premium per INR 1000 sum assured for a term of 15 years	Monthly premium per INR 1000 sum assured for a term of 20 years
30 years	INR 660	INR 500
35 years	INR 665	INR 510
40 years	INR 675	INR 530

Postal Life Insurance Premium Calculator

Just like RPLI has no specific premium calculator, there is no postal life insurance calculator too. However, like RPLI, there is also a PLI premium table for different types of insurance plans. As per the available PLI premium table, here are the sample premium rates for Santosh and Sumangal –

PLI Premium table for Santosh for sum assured of INR 1 lakh

Entry age	Monthly premium per INR 5000 sum assured if maturity age is 50 years	Monthly premium per INR 5000 sum assured if maturity age is 60 years
30 years	INR 400	INR 260
35 years	INR 560	INR 320
40 years	INR 860	INR 420
45 years	INR 1740	INR 580

PLI Premium table for Sumangal for sum assured of INR 1 lakh

Entry age	Monthly premium per INR 5000 sum assured if term is 15 years	Monthly premium per INR 5000 sum assured if term is 20 years
19 to 36 years	INR 660	INR 500
37 to 42 years	INR 680	INR 520
43 to 45 years	INR 700	INR 540

Factors affecting PLI and RPLI premiums

The premium rate of PLI and RPLI insurance plans depend on the following factors –

Age of the insured – higher the age higher would be the premium and vice-versa
Term selected – higher the term lower would be the premium payable and vice-versa
Sum assured – higher the sum assured higher would the premium payable and vice-versa
Type of policy – the type of policy selected determines the premium rate
Mode of premium payment – RPLI and PLI premiums can be paid monthly, quarterly, half-yearly or annually. Monthly premiums are higher than annual premiums because they involve additional administrative costs

Details required for premium calculation

Now you know the factors on which the premium of RPLI and PLI insurance plans depend. So, for calculating the premium of these plans, the following details would be required –

Age of the insured
Term of the plan
Sum assured that you want
Premium payment mode
Type of plan

Once you have all these relevant details, you can use RPLI and PLI premium tables and calculate the premiums payable for the policy yourself.

Benefits of PLI calculator

Calculating the premiums for RPLI and PLI insurance plans is beneficial because of the following reasons:

You can ascertain the premium payable for the policy before you actually buy the policy. This way you can know exactly how much the policy would cost you
You can provision in your financial budget regarding the premiums payable so that the policy does not lapse
You can select the coverage level at which the premium would be the most affordable for you
By knowing the premium rates you can also compare PLI and RPLI insurance plans with other insurance plans offered by life insurance companies and find out which plan offers the lowest premium rate

Both Postal Life Insurance and Rural Postal Life Insurance plans offer good coverage at lower premiums. The bonus that these plans give is also attractive which helps in creating a substantial corpus over the policy tenure. You can, therefore, choose plan offered by PLI and RPLI (if you live in a rural area) to avail life insurance coverage as well as to create a good corpus on the maturity of the plan. The tables are readily available on the official website of PLI and the premiums can be calculated easily. So, calculate the premiums and invest in an RPLI or a PLI insurance plan at the earliest.

FAQs

What is the difference between PLI and RPLI plans?
In PLI plans, the sum assured or aggregate sum assured limit is more than INR 1 lacs while in RPLI plans, the sum assured or aggregate sum assured limit is more than INR 25,000.
What is the minimum and maximum sum assured with postal life insurance plans?
The PLI plans provide a minimum of INR 20,000 and a maximum of INR 50 lakhs. However, the Bal Jeewan Beema is an exception. It provides a maximum of INR 3 lakhs.
Can a person living in an urban area avail of the RPLI schemes?
N, individuals who reside in rural areas are only eligible to avail themselves of the RPLI schemes.
What is the maximum amount that can be availed under the RPLI insurance schemes?
You can obtain a maximum of INR 5.5 lakhs under the RPLI insurance schemes.
What is the interest rate against the loans taken under PLI schemes?
A 10% interest is charged against the loans taken under PLI schemes, which is charged at an interval of every 6 months.

Insured Declared Value (IDV) – Details and Calculator (Car)

October 20, 2019April 21, 2021 Rupanjali Mitra Basu

Motor insurance is a compulsory requirement to ply your vehicle on Indian roads. When it comes to buying motor insurance plans, brochures and the policy-related document is often loaded with many insurance jargons which can make it confusing for you to understand. Insured Declared Value or IDV is one such jargon which needs to be understood properly to make the right and informed buying decision. So, what is insured declared value or IDV? Let’s understand as to what insured declared value or IDV means, how it is calculated and how IDV is going to impact your vehicle insurance policy.

What is Insured Declared Value (IDV)?

Insured Declared Value or IDV means the current market value of your vehicle. IDV represents the maximum sum insured fixed by the insurance company that will be payable during the total loss of vehicle during an accident or on the theft of the vehicle. IDV is calculated after factoring in the depreciation.

Calculation of Insured Declared Value (IDV)

Insured Declared Value (IDV) = Manufacturer’s listed selling price (excluding insurance and registration cost) – a depreciation of the vehicle

Depreciation is deducted as per the schedule. Due to the depreciation factor, insured declared value (IDV) of the vehicle decreases as the vehicle ages. The insured declared value or IDV of the new car will differ from the car that is of four years old.

The Depreciation Schedule to fix the Insured Declared Value (IDV) of the vehicle:

Age of the vehicle	% of Depreciation for adjusting Insured Declared Value (IDV) of the car
New car – between o to six months	5%
Between six months to one year	15%
Between one year to two years	20%
Between two years to three years	30%
Between three years to four years	40%
Between four years to five years	50%
6th year onwards	IDV is mutually agreed between insured and insurance company

For accessories that are not factory fitted, insured declared value or IDV is calculated separately at an extra cost if you are seeking insurance for those accessories. For cars older than five years of age, insured declared value or IDV is fixed based on an assessment of the car’s condition by the surveyor and not by the depreciation.

Importance of Insured declared value or IDV

Insured Declared Value or IDV is important because it is an important consideration in the process of determining insurance premium. It’s important to declare the correct insured declared value or IDV while purchasing a car insurance policy. Declaring higher than or lower than market IDV will have an impact on your premium and claim amount. Following are the impact on IDV:

Declaring higher insured declared value (IDV): If you choose higher IDV, you may end up paying higher amount of premium even though the claim amount that you may receive is higher.
Declaring lower insured declared value (IDV): If you choose lower IDV, you may pay a lower premium but you will end up receiving a lower claim amount compared to your actual loss.

Hence, it’s important to declare IDV (insured declared value) close to the market value of your car so that in the situation of theft or constructive total loss to the vehicle can be compensated fairly.

How to calculate the insured declared value or IDV?

IDV in insurance means the current market value of the vehicle. IDV is calculated based on selling value of your car after factoring in the depreciation applicable on the vehicle parts (depending on the age of the vehicle).

Insured declared value or IDV = Manufacturer’s listed selling price – depreciation value based on the age of the vehicle

In case, your new car is equipped with additional accessories after the purchase, IDV is calculated as follows:

Insured declared value or IDV = (Manufacturer’s listed selling price – depreciation value based on the age of the vehicle) + (cost of extra accessories – depreciation value of these parts)

IDV can be calculated online also using insured declared value or IDV calculator.

Points to remember while calculating IDV

Following are the important points to be considered while assessing insured declared value (IDV) of your car:

Do your homework. Check with the manufacturer before you give a nod to IDV fixed by your car insurance provider.
IDV is the most important component while calculating the renewal premium for car insurance. Hence ensure the cost of the premium is determined based on your car’s IDV.
Greater the IDV higher is the premium. Lesser the IDV lesser will be your compensation amount. Hence, declare the right amount of IDV to get the rightful claims.

To sum up, it’s important to know that your car insurance policy runs around IDV. Hence, to choose the best and right insurance for your car, ensure to check IDV before purchase, declare the right IDV.

Frequently Asked Questions (FAQs)

What is ‘depreciation’ in car insurance?The loss of value of your car with time is known as depreciation. Wear and tear of the vehicle with its age is common which reduces the value of car parts and the car.
How can you protect your car’s sum insured from the rate of depreciation? Vehicle’s value diminishes every year with the general wear and tear of its part. Depreciation rates are applicable as per the policy schedule while calculating the sum insured in a policy. However, there is add on called ‘zero depreciation’ available with every car insurance provider to protect your sum insured from the rate of depreciation. However, this add-on benefit is not applicable in case of a total loss to the vehicle.
What is the information based on which IDV is calculated by the car insurance provider?Car insurance provider calculates the insured declared value or IDV based on various information provided by you as an insured. The information that is considered in the calculation of IDV is vehicle make and model, registration details, cubic capacity and vehicle variant etc.
What is IDV calculator?IDV value calculation is pretty simple with IDV calculator. It is an online tool to calculate or assess insured declared value of your car. All you need to do is provide few basic information related to your vehicle online and IDV calculator instantly calculates the IDV for you. You may need to provide details of make and model of your car, registration date, city of registration, fuel type, age of your car, policy type and policy period.

Buy Commercial Vehicle Insurance Online in India – Full Policy List

October 20, 2019February 25, 2022 Ankita Sejpal

Every vehicle plying on the Indian road needs to be mandatorily insured. If you are running a business, Insurance required is needed for commercial vehicles also such as passenger-carrying vehicles, goods carrying vehicles, miscellaneous vehicles such as Cranes, Trailers and tractors. It is important to have comprehensive coverage for commercial vehicles as road mishaps can result in heavy liability and make your business suffer.

What is commercial vehicle insurance?

Commercial vehicle insurance is a type of motor insurance policy that provides coverage against liabilities arising out of third-parties when involved in an accident, loss or damage to the insured vehicle against various man-made and natural calamities along with personal accident coverage to the owner and paid driver. This coverage is also referred to as commercial car insurance and commercial truck insurance as insurance is most commonly associated with company cars and goods carrying trucks.

Why do you need commercial vehicle insurance?

Commercial vehicles are an important part of many businesses. If you are running a business and using vehicles for business purposes, it’s important to insure them adequately. Following are the main reasons why you need to insure your commercial vehicle:

In case your commercial vehicle is involved in any road accidents and causes bodily injury or property damage to the third party, then you will have to bear the liability arising out of the accident. Commercial vehicle insurance will shield your business against such liabilities.
If your commercial vehicle gets damaged in a road accident, commercial vehicle insurance can help you get the financial aid to get the vehicle repaired.
The commercial vehicle insurance plan also safeguards the paid driver and his family in case of accidental death or disability.

Coverage offered under a commercial vehicle insurance policy

Coverage under commercial vehicle insurance can be customised as per requirement. Comprehensive commercial vehicle insurance offers the following coverages:

Third-party liability cover: Under this, liabilities arising out of the third party involved in the accident for bodily injury, death or property damage caused by the insured vehicle are covered.
Own damage cover: Under this, coverage is offered to the insured commercial vehicle against the following perils
- Man-made perils such as housebreaking, theft, strike, riot, burglary and terrorism
- Natural calamities such as fire, explosion, lightning, self-ignition, storm, flood, typhoon, hurricane, hailstorm, tempest, cyclone, rockslide and landslide
- Coverage is provided for damages caused while in transit by road, rail, inland waterways, air, lift or elevator
Personal accident cover: During road accident, if the owner or paid driver dies or gets injured resulting in a disability, commercial vehicle insurance plan provides coverage for the loss. Accidental death and disability cover is an in-built feature for any comprehensive commercial vehicle insurance policy.
Towing coverage: Many commercial vehicle insurance policies offer towing coverage as part of a comprehensive policy in order to provide support for disabled vehicles. Some policies may offer this as an add-on.

Exclusions in commercial vehicle insurance

Following are the exclusions under commercial vehicle insurance:

War and nuclear risks
Ionizing radiation
Accidental damage or liability arising out of the non-geographical area for the vehicle
A vehicle driven by someone other than the driver, as stated in the ‘Driver’s Clause’.
Vehicles being used other than in accordance with the limitations as to use.
Consequential loss

What the factors that influence commercial vehicle insurance premium?

Following are the main factors that influence commercial vehicle insurance policy’s premium:

Insured declared value (IDV) of the vehicle
Age of the vehicle
Make and model of the vehicle
Fuel type and capacity of the vehicle
Place of registration
Vehicle usage purpose
Business liability limit required

Premium rates for commercial vehicle insurance (for third party liability cover)

Description of Vehicle Class	Premium with effect from 16th June 2019 (INR)
Goods Carrying Vehicles Public Carriers (other than 3 wheelers)
GVW not exceeding 7500 kgs	15,746
Exceeding 7500 kgs but not exceeding 12000 kgs	26,935
Exceeding 12000 kgs but not exceeding 20000 kgs	33,418
Exceeding 20000 kgs but not exceeding 40000 kgs	43,037
Exceeding 40000 kgs	41,561

Goods Carrying Vehicles Private Carriers (other than 3 wheelers)
GVW not exceeding 7500 kgs	8,438
Exceeding 7500 kgs but not exceeding 12000 kgs	17,204
Exceeding 12000 kgs but not exceeding 20000 kgs	10,876
Exceeding 20000 kgs but not exceeding 40000 kgs	17,476
Exceeding 40000 kgs	24,825

Goods Carrying Motorized Three Wheelers and Motorized Pedal Cycles – Public Carriers
Except for e-carts	4,092
e-carts	2,859

Goods Carrying Motorized Three Wheelers and Motorized Pedal Cycles – Private Carriers
Except e-carts	3,914
e-carts	3,204
Trailers
Agricultural Tractors up to 6 HP	857
Other vehicles including Miscellaneous & Special Type of Vehicles (Class-C), (For each trailer, for more please multiply by no. of trailers)	2,341

How to find the best commercial vehicle insurance?

To find the best commercial vehicle insurance, you can compare various policies available online on various parameters. Compare the policies on the basis of the cashless facility, network garages, claim settlement ratio and no claim bonus and many more such features. On insurance technology firm’s website, you can compare these plans on side by side basis and buy a plan that is best suited for your business. Cost-benefit analysis in the process of comparing and buying can help you make an informed choice.

Documents required for buying commercial vehicle insurance

The policy can be bought online also. Following are the documents required:

Vehicle registration number, chassis number and the engine number
The manufacturing date of the vehicle
Date and city of the vehicle purchase
Registration book copy
Name and contact details of the owner

Frequently Asked Questions (FAQs)

What is no claim bonus?
No claim bonus is a reward from the insurance company for not making any claims during the policy period. No claim bonus benefit can range from 20% to 50% on the premium. The benefit can be accumulated over the years.
What is a consequential loss
Consequential losses are the damage or loss resulting as a consequence of certain actions of the insured or third party in an accident. For example, engine damage due to hydrostatic loss due to parking the vehicle in the water-logged area during monsoon.
Which are the most common add-ons offered under commercial vehicle insurance plans?
Depreciation waiver cover and windshield cover are the two main add-ons offered under the commercial vehicle insurance policy.
What is depreciation waiver cover?
Depreciation waiver cover gives protection in the event of an accident by compensating the full value of vehicle parts without factoring in depreciation.
What is the windshield cover?
If the windscreen glass breaks or gets damaged during an accident, windshield cover compensates for repair or replacement cost. This will not be treated as own damage cost and hence your no claim bonus will not be affected by this claim.

All you need to know about Pradhan Mantri Jeevan Jyoti Bima Yojana

October 18, 2019April 21, 2021 Rupanjali Mitra Basu

Life insurance is very essential to provide a sense of financial security to the family members in case of your unfortunate demise. To stress upon the importance of life insurance, the Prime Minister of India, Mr Narendra Modi has launched the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY). The PMJJBY scheme offers term life insurance coverage at affordable premiums. Let’s understand what the PMJJBY scheme is all about.

What is PMJJBY?

PMJJBY full form is Pradhan Mantri Jeevan Jyoti Bima Yojana. This scheme provides a one-year renewable term insurance coverage for a sum insured of INR 2 lakhs.

Features of Pradhan Mantri Jeevan Jyoti Yojana

The PMJJBY scheme has various salient features which are discussed below –

PMJJY offers pure term insurance cover. If you die during the term of the plan, the sum assured of INR 2 lakhs would be paid to your family. In case you survive the coverage tenure of one year, no maturity benefit is paid
You can renew the plan every year till you reach the maximum coverage age
Coverage starts from 1st June every year and continues till 31st May of the following year
You can buy the plan after 1st June but coverage would cease on 31st May after which you would have to renew. Moreover, even if you buy mid-way, you would have to pay the premium for the full year
Accidental deaths are covered from Day 1 of the policy
In case of death due to an illness, there is a waiting period of 45 days from the date that you buy the policy. If you die due to an illness during the waiting period of 45 days, no claim would be paid under the policy
You can buy the plan through your bank account
Premiums are deducted through auto debit from your bank account. As such, to get coverage you have to opt for the auto debit facility in your bank account

Eligibility parameters for Jeevan Jyoti Bima Yojana Scheme

If you want to buy the PMJJBY scheme, you would have to fulfil the following eligibility parameters –

You should have a bank savings account
Joint account holders can also apply for the scheme
You should be aged between 18 years and 50 years. Coverage is allowed up to a maximum age of 55 years

What is covered under PMJJBY?

PMJJBY covers deaths during the policy tenure. Death can be accidental or due to an illness.

What is the premium amount of PMJJBY?

As mentioned before, PMJJBY is a very affordable scheme. The premium for one-year term insurance coverage is only INR 330. You have to pay the premium directly from your bank account through the auto-debit facility.

The insurance cover is available through your bank account however the bank ties up with an insurance company to provide you with the insurance coverage. That is why the premium that you pay is divided between the bank and the insurance company. Here’s how the division takes place –

INR 289 of INR 330 is paid to the insurance company for providing you with the term insurance coverage
INR 30 of the remaining amount is paid to the bank or agent through which you buy the PMJJBY scheme
Lastly, the remaining INR 11 is also paid to the bank to meet the administrative expenses incurred by the bank in issuing you the policy

How to buy Pradhan Mantri Jeevan Jyoti Bima Yojana?

You have to buy the PMJJBY scheme from a bank where you hold an account. Almost all banks offer coverage under the scheme. Each bank is tied-up with the insurance company to provide you coverage.

To apply for the scheme, you have to fill up an application form for the same. The form is available at the branches of your bank. If you are enrolled with the bank’s net banking facility then you can find the form online on the bank’s website. Alternatively, you can also download the form from the website of the Government which is Janasuraksha.gov.in

After getting the form you can fill it in any language. The complete details of the insured and the nominee should be clearly mentioned. You should also give your consent for auto debit of the premium for the scheme.

Submit the filled form along with the consent for auto debit. The bank would verify your form and send it to the insurance company. Once the company approves coverage, the premium would be debited from your account and the coverage would start.

How to claim under the PMJJBY scheme?

Just like applying for the Pradhan Mantri Jeevan Jyoti Bima Yojana is easy, making a claim is also simple. To make a claim under the scheme, take the following steps –

As the insured dies, the nominee should intimate the bank about the death of the insured
The nominee should then fill up a claim form and a discharge receipt for getting the claim
The form and the receipt should be submitted to the bank from where the scheme was bought
The bank, then, verifies the claim
After verification, the bank sends the claim form and related documents to the insurance company which provides insurance coverage
The insurance company would also verify the claim at its end and check the authenticity of the documents submitted
If the insurance company is satisfied with the authenticity of the claim, the claim amount is directly credited to the bank account of the nominee

Documents required for making a claim under PMJJBY

To support the claim, the nominee should submit the following documents along with the claim form and the discharge receipt –

Death certificate of the insured
Copy of his cancelled cheque which would provide the insurance company with the bank account details of the nominee wherein the claim would be credited
Claim occurs when the insured dies. In that case, the nominee should approach the bank and intimate the death of the insured. A claim form and a discharge receipt should be filled in by the nominee and submitted to the bank along with the death certificate of the insured. The nominee should also submit a copy of his cancelled cheque for furnishing his bank account details wherein the claim would be credited

Things to keep in mind

The PMJJBY scheme is quite a straightforward scheme of term insurance where the coverage is provided for one year for a sum assured of INR 2 lakhs at a premium of INR 330. However, there are some things which you should remember about the scheme –

The PMJJBY scheme can be applied from one bank account only. If you have multiple bank accounts you cannot apply for the scheme through each of them
If you have applied for the scheme through multiple bank accounts, the scheme would be terminated when the multiple coverages are discovered. The premium that you paid would also be forfeited
The scheme would be terminated if you close the bank account from where you applied
The scheme would also be terminated if your bank account does not have sufficient balance to pay the premiums
You can voluntarily opt out of the scheme whenever you want

Benefits of PMJJBY

Now that you know all the important aspects of the Pradhan Mantri Jeevan Jyoti Bima Yojana, let’s see the benefits which the scheme promises –

The scheme is available to everyone holding a valid bank account and who fulfils the age criterion
The premiums are extremely low and affordable making the scheme accessible to all
The coverage amount is decent providing the family with the much-needed financial assistance in case of premature death of the breadwinner
Since the scheme is easily accessible, it increases the penetration of insurance in India and highlights the importance of having a term insurance plan

What are you waiting for?

The PMJJBY scheme is simple and easily accessible. You can opt for the scheme even when you have other insurance policies to your name as the premiums are low. So, apply for the scheme and get covered against the risk of premature death.

Frequently Asked Questions

What would be the claim amount if I have multiple term plans and also the PMJJBY insurance?
PMJJBY can be bought in addition to any other insurance policy that you have. In case of a claim, you would get the claims from all the policies that you have including PMJJBY cover.
What would happen once I attain 55 years of age?
If you are covered under the PMJJBY scheme and you attain 55 years of age, the coverage would automatically terminate.
Are any documents required to apply for the scheme?
Your KYC documents would be required when you apply for the scheme. These include your identity proof, age proof, address proof and photographs. However, since you already have a bank account, your identity is established. Your bank might, therefore, allow you to apply for the scheme without submitting additional documents.
Can I apply for the scheme through SMS?
Yes, you can if your bank allows you to apply for PMJJBY through an SMS. You would, however, have to fill the application form and submit it to avail coverage.