Keen to push through its financial inclusion plan, the government has finalised the life insurance cover to be provided under the Pradhan Mantri Jan Dhan Yojana. But unlike expectations, the cover has several riders, meaning that not all those who have opened an account under the scheme would be eligible for life insurance.
For starters, the Rs 30,000 life insurance cover would be limited to just one account holder per family. “The person should normally be the head of the family or an earning member of the family and should be in the age group of 18 to 59,” the guidelines state.
While the beneficiary will have to mandatorily exit the life insurance scheme at the age of 60 years, the cover is at present available only for a period of five years till 2019-20, after which it will be reviewed.
In addition, the eligibility criteria state that life insurance would be available only to those people opening a bank account for the first time between August 15, 2014 and January 26, 2015.
Further, the person must have a valid RuPay Card and biometric Card linked to the bank account or in the process of being linked to the bank account.
The Centre has also excluded various categories of people from the scheme, including Central and state government employees, people whose income is taxable under the Income Tax Act, 1961 or TDS is being deducted from the income, and their families.
“Persons who are included in the Aam Aadmi Bima Yojana covering 48 occupations defined under the Scheme, and their families” have also been excluded. Further, other eligible account holders who have life cover on account of any other scheme of the Bank against the account will have to choose between the two life covers.
Prime Minister Narendra Modi had launched the scheme on August 28, this year with the intent of financially empowering the people by opening bank accounts for two persons in every household.
Additionally, they are to be given a RuPay debit card, accidental insurance cover of Rs 1 lakh and an overdraft facility.
The government has targeted 7.5 crore households under the scheme. At present, 9.04 crore accounts have been opened with total deposits of Rs 7,006 crore. However, 6.68 crore accounts continue to be dormant. Life Insurance Corporation of India is responsible for the life insurance cover through a special fund for the purpose which has an initial corpus of Rs 100 crore from the Social Security Fund.
* Insurance would be available only to those people opening a bank account for the first time between August 15, 2014 and January 26, 2015.
* While the beneficiary will have to mandatorily exit the scheme at the age of 60 years, the cover is at present available only for five years till 2019-20 after which it will be reviewed.
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