Government Life Insurance Schemes in India

Government Life Insurance Schemes

Government life insurance schemes are designed and implemented by state or central government to offer financial security to individuals and their families in the unfortunate event like death. There is no denying that there is a limited accessibility of life insurance in India, especially in rural areas. With this keeping in mind, the Government of India has taken steps to introduce a multitude of life insurance policies. 

The primary objective behind these government life insurance plans is to make insurance affordable and accessible to people from all socio-economic backgrounds. By offering reasonably priced premiums, these schemes ensure that individuals from every background can avail themselves of adequate coverage. This approach helps bridge the gap in life insurance penetration and offers a safety net to citizens who are unable to afford expensive private insurance policies. 

Interested in knowing the schemes? This post will highlight the best government life insurance schemes and how they can benefit you and your family.

Types of Government-Backed Life Insurance Schemes

It is no secret that Governments worldwide recognize the importance of life insurance in providing financial security to individuals and families. Thus, the Indian Government launched various life insurance schemes to provide a substantial sum assured at an affordable rate.

1. Aam Aadmi Bima Yojana

The AABY (Aam Aadmi Bima Yojana) is a social security scheme specifically aimed at rural landless households in India. This government-backed initiative focuses on providing life and disability coverage to the primary breadwinners of these families. Its primary objective is to offer financial support to the insured and their families in the unfortunate event of death or disability. Under the scheme, the insured individual receives an insurance cover of Rs. 30,000 in case of natural death and Rs. 75,000 in case of accidental death or permanent disability.

Parameters Details 
Minimum Entry Age 18 Years
Maximum Entry Age 59 Years
Sum Assured Rs. 30000/Rs. 37000/Rs. 75000
List of Documents Required 
  • Aadhar Card
  • Age Proof
  • Address Proof
  • Bank Account Details
  • Income Certificate
  • Occupation Proof

Key Features & Benefits:

These are as follows:

  • Affordable Premiums

One of the key features and benefits of the Aam Aadmi Bima Yojana (AABY) is that it is not only accessible but also affordable to individuals with different economic backgrounds. Another key factor that makes it easily accessible is the government’s subsidy which helps reduce the premium amount and anyone with limited money can choose the policy. 

  • Protection Against Natural Calamities 

The AABY scheme offers protection against natural calamities such as floods and earthquakes. This feature is particularly important for individuals living in vulnerable areas prone to such disasters. 

  • Women-Centric Plan

Another major feature and benefit of this scheme is that it perfectly understands the needs of women and thus, offers special coverage benefits, including Maternity Benefits.

2. Pradhan Mantri Suraksha Bima Yojana

Since its launch, the Pradhan Mantri Suraksha Bima Yojana (PMSBY) is a government-term insurance plan that has been recognized to increase the number of insured individuals in India. This scheme is available to all Indian citizens between the ages of 18 to 70. In the unfortunate event of accidental death or disability, the scheme provides a sum assured of up to Rs. 2 lakhs to the insured’s nominees. In case of partial disability, a sum assured of Rs. 1 lakh is provided.

Parameters Details 
Minimum Entry Age 18 Years
Maximum Entry Age 70 Years
Sum Assured Rs. 1 lakh/Rs. 2 Lakh
Insurance Provider Banks & Other General Indian Insurance Companies

Key Features & Benefits: 

The following are the major features and benefits of the plan. 

  • Maximum Coverage 

One of the major features and benefits of this scheme is that the insured will receive a coverage amount of Rs. 2 Lakhs in case of death or permanent/total disability. This amount will provide financial support to the insured person or their family during difficult times. 

  • Disability & Death Coverage

The plan covers many forms of disabilities which include death, total and permanent loss of sight in both eyes, loss of both hands, loss of both legs or loss of one leg or one limb. 

  • Affordable Premium 

One of the notable aspects of the scheme is that it offers affordable premiums so that anybody can afford it. The plan is available at a small premium fee of Rs. 12 per annum.

3. Pradhan Mantri Jeevan Jyoti Bima Yojana

Launched in 2015, the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) is a dedicated government term insurance plan that aims to provide affordable life insurance coverage to all Indian citizens. The scheme provides a one-year term life insurance policy with coverage for death due to any reason. This comprehensive coverage offers financial security to the insured’s family in the unfortunate event of their demise. The plan is available for citizens between the ages of 18 to 50 years.

Minimum Entry Age 18 Years
Maximum Entry Age 50 Years
Sum Assured Rs. 2 lakhs
Premiums Paid Rs. 436 per annum

Key Features & Benefits:

Here are the key features and benefits. 

  • Annual Renewal Benefit

One of the notable features and benefits of the scheme is that it offers an annual renewal benefit which allows individuals to extend the coverage provided by the plan until the age of 55 years. However, the renewal is not possible beyond the age of 50. 

  • Automated Premium Payment 

To facilitate hassle-free premium payment, the plan can be integrated with the policyholder’s bank account. This integration enables automated premium deductions which ensures timely payment without requiring the need for manual effort.

  • Tax Benefits 

Another notable feature of this government plan is that it offers tax benefits to insured individuals. The premiums paid towards the policy are eligible for tax deductions under applicable income tax regulations.

4. Pradhan Mantri Jan Dhan Yojana

In 2014, the Indian government introduced the Pradhan Mantri Jan Dhan Yojana (PMJDY) scheme to address the lack of access to banking services among a large portion of the population. The primary objective of the scheme is to extend banking services to the underbanked and unbanked individuals in the country. Each bank account comes with a Rupay debit card. This card enables account holders to make cashless transactions and access ATM services. Additionally, the RuPay debit card includes a built-in accidental cover of Rs. 1 lakh.

Minimum Entry Age 18 Years
Maximum Entry Age 59 Years
CoverageOne person per family will get a single cover of Rs. 30,000

Key Features and Benefits: 

These are as follows:

  • Life & Accidental Insurance Coverage 

One of the biggest features and benefits of this plan is that it offers accidental cover through the RuPay debit card. 

  • Basic Bank Account Provision 

Under the scheme, every family that previously had no bank account is provided with a basic bank account. It ensures that individuals have access to formal banking services which include deposit & withdrawal facilities. 

  • Security for Underprivileged 

Another major highlight of the plan is that it provides security to families who are unable to afford direct insurance or lack coverage under social security schemes. The scheme primarily focuses on the urban poor and rural poor to ensure that they have access to life insurance protection.

Final Thoughts

So, there you have it! It comes as no surprise that the government offers multiple life insurance schemes tailored for individuals belonging to different economic backgrounds. These initiatives play a crucial role in improving the overall financial status of the country. Individuals from diverse socioeconomic backgrounds need to take advantage of the benefits provided by these government-led schemes. Investing in government-term insurance plans not only facilitates structured savings but also ensures financial security for the insured individual’s dependents in the event of their unfortunate demise.

Frequently Asked Questions

In general, cosmetic surgeries are not covered under any of the government life insurance plans.

As per income tax laws, government life insurance schemes offer tax benefits to policyholders under sections 80C and 10 (10D) in addition to insurance coverage.

The rules of the plan and the benefits of the policy determine the amount insured. Every customer needs to verify the individual sum insured for each plan.

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