Dvara Analysis Weblog | Demanding situations within the supply of Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and Pradhan Mantri Suraksha Bima Yojana (PMSBY)[1]







Niyati Agrawal
Misha Sharma[2]

1. Creation

Existence insurance coverage can function a important product within the portfolio of low-income families (LIHs) to tide over antagonistic revenue shocks. Occasions reminiscent of lack of existence or coincidence of the principle revenue earner of the circle of relatives, mixed with insufficiency and unpredictability in cashflows may have an enormous unfavorable have an effect on at the monetary steadiness of those families. Subsequently, serving to low-income families organize and get well from shocks is crucial coverage mandate. With this schedule in thoughts, the Executive of India introduced the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and the Pradhan Mantri Suraksha Bima Yojana (PMSBY) in Might 2015 as a part of the Jan-Dhan Se Jan Suraksha program. PMJJBY provides a sponsored existence insurance coverage quilt of as much as ₹2 lakhs for a top rate of ₹436 (paid once a year) for people within the age team of 18 to 50 years.[3] PMSBY provides unintended demise and incapacity protection of as much as ₹2 lakhs for unintended demise and whole incapacity and ₹1 lakh for partial incapacity for a top rate of ₹20 consistent with annum, for people within the age team of 18 to 70 years.[4] PMJJBY and PMSBY are presented by means of Existence Insurance coverage Company and public sector normal insurance coverage firms, respectively, together with different insurance coverage firms keen to give you the merchandise on phrases mandated by means of the Executive, with vital approvals and tie-ups with banks (Inclusive Finance Record, 2021).[5]

The inexpensive and available nature of those insurance coverage merchandise makes them related to the desires of low-income families. But, the take-up of those schemes stays low. In step with the 2019 All-India Debt and Funding Survey (AIDIS),[6] not up to 5% of Indian families have PMJJBY and PMSBY accounts, with the possession being not up to 1% for low-income families.[7]

This analysis transient targets to synthesize current proof at the efficiency of PMJJBY and PMSBY since their inception, the explanations for low participation in those schemes, and the boundaries to their a hit implementation. We do that by means of that specialize in the supply-side problems that give upward thrust to buyer coverage considerations and that cut back the effectiveness of those schemes. We destroy down and assessment each and every step of the buyer journey- from get entry to and possession of accounts to claims agreement and the mechanisms to be had for criticism redress. We additionally in brief describe the demand-side elements that experience a bearing at the take-up of those schemes, reminiscent of the buyer’s context and personal tastes and attitudes in opposition to insurance coverage.[8]    

We depend on current datasets to judge the penetration of those merchandise and contact sector mavens from grassroots organisations, assume tanks, and the monetary trade to furnish a holistic standpoint at the effectiveness of those schemes in assembly their goals.

We discover that the buyer travel in buying and availing the advantages of PMJJBY and PMSBY is marred by means of a large number of process-level inefficiencies. Those inefficiencies lead to buyer harms and provides upward thrust to quite a lot of buyer coverage considerations. Those considerations relate to practices followed by means of Monetary Provider Suppliers (FSPs) within the sale and servicing of those merchandise that put the buyer’s passion and wellbeing in danger and due to this fact fail to ‘offer protection to’ the buyer.

Click on right here to get entry to the overall analysis transient.

[1] We’re thankful to the Gates Basis for investment this challenge as a part of Dvara Analysis’s Buyer Coverage Program (CPP). We thank the advisory committee contributors of CPP and specifically Pawan Bakhshi, India Nation Lead at BMGF. We thank Indradeep Ghosh, Government Director and Deepti George, Head of Technique and Deputy Government Director at Dvara Analysis for his or her comments and inputs during the process the find out about. We additionally thank Shreya Tiwari who interned with us in this challenge from April to Might 2022. In any case, we wish to thank a number of trade mavens we spoke to to be able to construct our working out of the demanding situations in handing over the insurance coverage schemes underneath the Jan Suraksha program.

[2] Niyati Agrawal, Analysis Affiliate, Family Finance Analysis Initiative, Dvara Analysis (niyati.agrawal@dvara.com); Misha Sharma, Apply Head, Family Finance Analysis Initiative, Dvara Analysis (misha.sharma@dvara.com)

[3] The top rate quantity of PMJJBY used to be higher from an annual quantity of ₹330 to ₹436 in Might 2022.

[4] The top rate quantity of PMSBY used to be higher from the preliminary ₹12 consistent with annum to ₹20 consistent with annum in Might 2022.

[5] Inclusive Finance India Record, 2021- https://www.indiaspend.com/uploads/2021/12/19/IFI_Report_2021.pdf

[6] Insights from the AIDIS 2019- https://www.dvara.com/analysis/wp-content/uploads/2022/02/AIDIS-Slide-Deck.pdf

[7] To check the distribution of policyholders by means of family wealth, we additionally calculated the web price of families by means of estimating the adaptation between their worth of property and liabilities. We discovered that 75% to 80% of PMSBY and PMJJBY account possession comes from families that fall within the best 60% of web price distribution, while the ground 40% of families personal handiest 20% to twenty-five% of the whole pie. Those numbers point out that the protection of those schemes stays insufficient amongst low-income families.

[8] A number of of those elements are, then again, intricate and are extra advanced than what they appear at the floor. Subsequently, a neat bifurcation of call for as opposed to delivery aspect problems may no longer at all times be conceivable. Then again, it is very important speak about those elements as they affect the uptake of those schemes. Additionally, a number of of the ‘demand-side elements’ also are a outcome of the present distribution realities of insurance coverage merchandise amongst low-income families, in particular in rural settings. For instance, lack of understanding might be seen as each a delivery and a requirement aspect factor. One may argue that FSPs have no longer made sufficient effort to coach and tell doable shoppers, particularly amongst low-income, rural communities, about plenty of insurance coverage merchandise to be had out there. This generally is a reason why for the loss of call for for time period existence insurance coverage merchandise amongst low-income families. On the identical time, one may additionally argue that restricted publicity to the formal monetary device and coffee ranges of training of LIHs hinders their wisdom in regards to the formal insurance coverage markets at massive.

Cite this transient:


Agrawal, N., & Sharma, M. (2023). Demanding situations within the supply of Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and Pradhan Mantri Suraksha Bima Yojana (PMSBY). Retrieved from Dvara Analysis.


Agrawal, Niyati and Misha Sharma. “Demanding situations within the supply of Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and Pradhan Mantri Suraksha Bima Yojana (PMSBY).” 2023. Dvara Analysis.


Agrawal, Niyati, and Misha Sharma. 2023. “Demanding situations within the supply of Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and Pradhan Mantri Suraksha Bima Yojana (PMSBY).” Dvara Analysis.

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