PRADHAN MANTRI JEEVAN JYOTI BIMA YOJNA (PMJJBY)


INTRODUCTION

Pradhan Mantri Jeevan Jyoti BimaYojna is a life insurance scheme in India. It was originally mentioned in the 2015 by Finance minister late Arun Jately.It was formally launched by Prime minister Narendra Modi on 9th May in Kolkata. As we all are aware of that only 20% of the people of India has any kind of Insurance. This scheme is for the people between 18 to 50 years old. It was annual minimum of Rupee 330. This scheme will be linked also to the bank account under the Pradhan Mantri JandhanYojnascheme . The government aims to reduce the number of seen zero balance account by using this scheme the scheme is being offered by life Insurance corporation and all other life insurance who are willing to offer the product or similar terms with necessary approach and tie up will the bank for this purpose.The central government of India has taken this step for the growth of poor and low income section of society.this scheme in a renewal term insurance policy that provides a fearly life insurance coverage 2 lakh incase of the demise of the unserved person.As a government backed insurance policy with the minimum rates this plan is very advantageous for those individuals who is willing to get the profit for their family. This plan provides security to the family of the observed to the cover any eventually. The sector plan has simplest process. This is one of the best scheme have ever made.

Who is eligiable
The Pradhan Mantri Jeevan Jyoti Bima Yojana will be made available to anyone between the age group of 18 to 50 years. The concerned person should also have a bank account. People, who avail this policy before they are 50 years old, will be allowed to enjoy the risk of life cover till the age of 55 years. However, they will need to pay the premium on a consistent basis in order to be provided that benefit
What is the premium
The policyholders will need to pay INR 330 per year. The amount will be deducted each year from their bank account in a single installment. This will be done by the bank from where the policy is being opened
How will the Premium be divided?
Out of the yearly premium of INR 330, INR 289 will go to the insurer and INR 30 will be reimbursed for the expenses incurred by the BCs, corporate or micro agents. The bank will get INR 11 as compensation for administrative costs incurred by them

What is the risk coverage
The risk coverage being provided in the Pradhan Mantri Jeevan Jyoti Bima Yojana is INR 2 lakh. Risk cover under PMJJBY is applicable only after the first 45 days of enrolment. In other words, insurers do not have to settle claims during the first 45 days from the date of enrolment. However, deaths due to accidents will be exempt from the lien clause and will still be paid.


Who will offer the program
Life Insurance Corporation of India (LIC) will be offering the plan. However, other life insurers, who are eager to take part in the programme, can join it through tie-ups with specific banks. The banks, whose clients join the programme, will be deemed as the master account holders in case of the PMJJS. The LIC or the other insurers will finalise the claims settlement and administration procedures, which are expected to be simple and friendly towards the subscribers. This will be done in consultation with the banks.
How can one enrol
PMJJBY is administered through LIC and other Indian private life insurance companies. One may also approach their bankers as for the process of enrolment banks have tied up with insurance companies. In a case of multiple bank accounts held by an individual in one or different banks, the person would be eligible to join the scheme through one bank account only.

The enrolment process has been kept simple and easy. To enrol, you can download the form from


When will the policy be terminated
The policy will come to an end once the holder reaches the age of 55 years. However, for this to be effective the policyholder will need to keep renewing the policy till that time. If the account holder has to close his or her account in the bank, where the policy is being maintained, because of paucity of sufficient funds to even maintain the minimum balance needed to ensure the policy is active, then the insurance policy will be closed as well. If the concerned person has taken more than one such account and the insurer gets the money in an unintended manner, then the said premium will be forfeited.

What Role will the Bank play?

Apart from being the master account holders and deducting the premium each year, the banks will need to play some other roles as well. Their primary duty will be to transfer the deducted premium to the insurers. They will also have to take care of the following: • Enrollment forms • Authorisation of auto-debit • Providing declaration-cum-consent form in the exact shape that they are supposed to be done. They will get it and keep it as well since at time of claims, or any other occasion as required by the insurer, they will be supposed to provide it to the insurer

Need/Reasons of Pradhan mantrijeewanjyotibima Yojana
1) Increase Penetration of Life Insurance: As i mentioned that penetration of Life Insurance is very low at around 3% in India. Therefore, one of the reasons which i can think off is that Pradhan Mantri Jeevan Jyoti Bima Yojana is launched with an objective to increase life insurance penetration. Here penetration should not be considered quantitatively. There is a social message behind it. Assuming that something happens to an insured than the financials of the family goes haywire. Therefore, this term insurance cover will act as an immediate relief and provide financial security to the family of the insured.
2) Increase Awareness: By providing a basic cover of 2 lakh, Government of India would like to increase the awareness about the importance of Life Insurance (read Term Insurance). Once people will start realizing the benefits of an Insurance then they will definitely opt for personal cover to increase the insurance coverage depending on the requirement. Moreover, the USP of a scheme is Life Cover of 2 Lakh in less than Rs 1 per day. I think, this is the best way to spread the message and create awareness.
3) To activate accounts opened under Pradhan Mantri Jan Dhan Yojana: The biggest problem faced by the Govt of India is inoperative accounts under Pradhan Mantri Jan Dhan Yojana. Bank incur a certain cost to maintain the savings account, but inoperative accounts are basically a burden on the banking system. By introducing an auto debit facility for all 3 newly launched social security schemes, Govt will ensure that accounts will remain operative. By doing this govt, has hit 2 birds with a single stone.
4) Tax Benefit- The premium paid towards the policy is eligible for tax deduction under section 80C of Income Tax Act. In case the insurance holder fails to submit form 15 G/15 H then any life insurance proceeds exceeding Rs. 1,00,000 will be taxable by 2%.
5) Death Benefit- In case of demise of the insured person the PMJJBY provides a death coverage of Rs2,00,000 to the beneficiary of the policy.
DATA ANALYSIS OF SUM ASSURED.
Maximum Sum Assured under Pradhan Mantri Jeevan Jyoti Bima Yojana is capped to only 2 lakhs while there is no capping with other products available in the market and discussed above as product feature. But it is good for those who want very small term insurance as normally companies are providing term insurance starting from 5 lac and there are no options which provide term insurance of 2 lac.
Below Table-1 representing comparison of few available term products of four different sample companies in the Indian market showing respective premium at different age.
Table-1
Age
 LIC
 SBI
 KOTAK
 MAX
 PMJJBY
 Mean
 Population(%)
18
 262
 205
 174
 265
 330
 226.5
 9.95%
25
 326
 274
 186
 276
 330
 265.5
 9.2%
30
 379
 369
 203
 290
 330
 310.25
 8.35%
35
 456
 381
 245
 335
 330
 354.25
 7.32%
40
 565
 463
 331
 470
 330
 444.75
 7.03%
45
 723
 578
 449
 565
 330
 578.75
 5.98%
50
 1108
 754
 665
 816
 330
 835.75
 5.15%

 Below Graph-1 shows the understanding of above comparison of all the five products considered for study between age and cost. This graph shows clear picture to compare these products at any age for their cost comparison along with the mean of all the five. It shows that mean of all is better cost effective till age if 33 years as compared with PMJJBY.

OBJECTIVE OF PMJJBY
  • Increasing the penetration of life insurance to the poor people who are otherwise not able to avail life insurance policies (in fact health/accidental) due to high insurance premiums and providing Jan Suraksha i.e. social security to all Indians.
Also as India’s younger generation don’t have any pension to take care after retirement, securing financial future of their family in their absence will be of utmost important which would be taken care under PM Jeevan Jyoti Bima Yojana.
  • Life insurance corporation of india will offer this scheme .
  • Other insurers are also eligible to participate
  • Insurance companies will tie-up the banks for this purpose
Performance of PMJJBY towards it objective

According to recent data analysis we can see , PMJJBY is almost equally popular in rural and urban males whereas in the case of rural and urban females, there is slight difference in the choices.
Scheme Name
 Rural Male
 Rural Female
 Urban Male
 Urban Female
 Grand Total
PMJJBY
 89,49,121
 55,29,696
 89,76,381
 50,74,277
 2,85,29,475
1These figures are for the period 1st June 2017 to 31st May 2018.
PMJJBY
 2015-16
 2016-17
 2017-18
Gross Enrolment(in crore)
 2.96
 3.12
 5.33
Total no. of. Claims paid
 25555
 62479
 89766
Claim Amount paid(in crore)
 511.10
 1249.58
 1795.32

A dvantage of PMJJBY
1. Highly Flexible.
2. Easy to apply for and continue.
3. Highly reliable.
4. Very low cost.
5. Clear cut claim settlement process.
Disadvantage of PMJJBY
1. Insurance is only provided for Rs 2 Lakhs only, which is not sufficient.
2. Existing terms insurance are more competitive.
3. Investors greatest barriers lies within themselves such as, least interest in analysis different types of available term insurance schemes, prone to procrastination and laziness, less futuristic and planning for future expenses, unable to understand concept of inflation and volatility of returns.
RECOMMENDATION
Insurance coverage recommendation problem in which the most suitable coverage for customers is suggested is an essential issue for an insurance company. ICRP helps insurance companies to give suitable services to their customers. In ICRP, the insurance company tried to mine the features and records of data associated with the customers to suggest them the most economic and fitted insurance plan. The insurance companies have large databases which are considered as a proper infrastructure to analyze, model and predict the customer behavior. In this paper, a two-stage clustering-classification model is proposed to suggest suitable insurance coverage for customers. The first stage addresses a data pre-screening phase and clustering of customers based on the record of insurance coverage. Well-known clustering algorithms are employed. The superior clustering algorithm is selected based on Davies-Bouldin metric. In the second stage, several filter and wrapper methods are implemented to select proper features. The selected features are assumed as inputs of K-nearest neighbor classification algorithm. The proposed approach is applied in a real case study for clustering the customers and recommend insurance coverage. The results show that the model is capable of suggesting suitable insurance coverage based on customers’ characteristics.

CONCLUSION
Pradhan Mantri Jeevan Jyoti Bima Yojana is focused to provide insurance coverage for death due to any reason to all the citizen of India especially unorganized sector workers with motto of “Jan-Dan se Jan Surakhsa”. Under Pradhan Mantri Jan Dhan Yojana existing channels of banking industry is very well utilized and still there is good scope for innovation and marketability. Pradhan Mantri Jeevan Jyoti Bima Yojana is attractive due to its flexibility, throughout easy and clear process, easy claim process, highly reliable and economical term insurance service. But due to its limited amount of coverage, existing competition and lack of investor‟s interest, act as barriers in the success road of the scheme.
REFERENCE
https://financialservices.gov.in/insurance-divisions/Government-Sponsored-Socially-Oriented-Insurance-Schemes/Pradhan-Mantri-Jeevan-Jyoti-Bima-Yojana(PMJJBY)

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