*For more information on tax benefits please contact your Tax Advisor.
Pradhan Mantri Suraksha Bima Yojana (PMSBY):
PMSBY or Pradhan Mantri Suraksha Bima Yojana is a government backed scheme. It is an Accident Insurance Scheme that offers accidental death and disability cover in case of death or disability due to an accident. The scheme is offered through public sector insurance companies and general insurance companies.
The scheme is available for individuals between the age of 18 and 70 years with bank accounts and the premium for the scheme will be deducted from the savings account of the insured. As of February 26, 2016, 124 million Indians have opted for the scheme.
Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY):
PMJJBY or Pradhan Mantri Jeevan Jyoti Bima Yojana is a government backed insurance scheme that was launched in 2015. The offers life cover for death of the insured. The scheme will be offered through LIC and other Life Insurance companies and banks that are willing to offer the scheme on similar terms.
Indian residents between the age of 18 and 50 years with a bank account are eligible for the scheme. In case the insured owns multiple savings bank accounts with different banks, they can join the scheme through a single savings bank account of their choice.
Related Read: Health Insurance Plans
Similarities between PMSBY and PMJJBY:
|Type||Government backed insurance scheme|
|Minimum age at the time of entry||18 years|
|Eligibility||Should have a savings bank account|
|Sum assured||Rs. 2,00,000|
|Insurance period||June 1st to May 31st|
|Number of policies||An individual can hold only one policy and cannot opt for the same policy in different banks|
|Mode of payment||The premium amount will be deducted from the savings bank account linked to the scheme|
|Purchasing the scheme||The schemes are available in public and private sector banks. One can purchase the scheme from the same bank where they hold a savings bank account|
|Refund||The money is not refunded in case there is no claim made|
|Tax benefit||The premium paid is tax free|
|Benefit||In case of death of the insured, nominee will be paid the money|
|Lapse of the policy||The policy will not lapse in case of non-payment of premium|
|Re-joining||One can re-join the scheme if they leave the scheme|
Differences between PMSBY and PMJJBY:
|Factor||Suraksha Bima Yojana (PMSBY)||Jeevan Jyoti Bima Yojana (PMJJBY)|
|Type of insurance scheme||Accident Insurance scheme||It is a life insurance scheme|
|Cover||Cover for death or disability by an accident||Cover for death of the insured Regardless of the cause of death|
|Age limit||18 years to 70 years||18 years to 50 years|
|Premium payment||70 years||50 years. The insured can however choose to pay the premium till they reach the age of 55 years given that they pay premium every year|
Both of the PMSBY and PMJJBY schemes are available to all Indian residents regardless of the income that they earn. The plan is very beneficial to the backward sections of the society as it offers cover for a very minimal amount. Applying for the schemes is very easy and one has to just fill in a form in order to apply for the scheme.
GST rate of 18% applicable for all financial services effective July 1, 2017.
Disclaimer: Premiums may vary depending upon factors like age, location and prevailing taxes/GST.