PM to launch insurance and pension schemes in Kolkata

New Delhi, May 8:

Prime Minister Narendra Modi will launch three ambitious social security schemes pertaining to the insurance and pension sector on Saturday at Kolkata, the finance ministry announced.

In a statement issued here, the ministry said the initiative will be path breaking in the provision of social security in a convenient way like auto-debiting of a bank account towards premium payment.

“The two insurance schemes to be launched, namely Pradhan Mantri Suraksha Bima Yojana (PMSBY) and Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), would provide insurance cover in the unfortunate event of death by any cause/death or disability due to an accident,” the statement said.

The pension scheme, Atal Pension Yojana (APY), would address old age income security needs and mitigate the longevity risk.

The three products and their convenient mode of delivery is expected to increase the insurance and pension coverage in the country.

Further, as the young population of India ages, it is also going to be without any formal pension provision. It is estimated that the unorganised sector workers, which constitute 88 percent of the total labour force of 47.29 crore, as per the 66th Round of NSSO Survey of 2011-12, do not have any formal pension provision.

Under the PMSBY scheme, a person will provided personal accident insurance cover for Rs.200,000 for an annual premium of Rs.12. The cover is for accidental death or permanent total disablement.

The scheme will be available to people in the age group 18 to 70 years with a savings bank account, who give their consent to join and enable auto-debit on or before May 31 for the coverage period – June 1 to May 31 – on an annual renewal basis.

The second scheme PMJJBY, will offer a renewable one year life cover of Rs.200,000 to all savings bank account holders in the age group of 18 to 50 years, covering death due to any reason, for a premium of Rs.330 per annum per subscriber.

On the other hand, the pension scheme APY focuses on the unorganised sector and provides subscribers a fixed minimum pension of Rs.1,000, 2,000, 3,000, 4,000 or 5,000 per month starting at the age of 60 years, depending on the contribution option exercised on entering at an age between 18 and 40 years.

Thus, the period of contribution by any subscriber under APY would be 20 years or more.

The benefit of fixed minimum pension enjoys the sovereign guarantee.

While the scheme is open to bank account holders in the prescribed age group, the central government would also co-contribute 50 percent of the total contribution or Rs. 1,000 per annum, whichever is lower, for five years.

The government contribution will be for those joining the scheme before Dec 31, 2015, are not members of any statutory social security scheme and are not income tax payers.

The three schemes will be simultaneously launched at 112 centres in different states and union territories attended by respective chief ministers/governors and the union ministers. (IANS)