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Dvara Analysis Weblog | Challenges 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. Introduction

Life insurance coverage can function a crucial product within the portfolio of low-income households (LIHs) to tide over adversarial earnings shocks. Occasions similar to lack of life or accident of the first earnings earner of the household, mixed with insufficiency and unpredictability in cashflows can have an enormous adverse influence on the monetary stability of those households. Subsequently, serving to low-income households handle and get well from shocks is a crucial coverage mandate. With this agenda in thoughts, the Authorities of India launched 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 life insurance coverage cowl of as much as ₹2 lakhs for a premium of ₹436 (paid yearly) for people within the age group of 18 to 50 years.[3] PMSBY provides unintentional loss of life and incapacity protection of as much as ₹2 lakhs for unintentional loss of life and full incapacity and ₹1 lakh for partial incapacity for a premium of ₹20 every year, for people within the age group of 18 to 70 years.[4] PMJJBY and PMSBY are provided by Life Insurance coverage Company and public sector normal insurance coverage firms, respectively, together with different insurance coverage firms keen to offer the merchandise on phrases mandated by the Authorities, with obligatory approvals and tie-ups with banks (Inclusive Finance Report, 2021).[5]

The reasonably priced and accessible nature of those insurance coverage merchandise makes them related to the wants of low-income households. But, the take-up of those schemes stays low. In response to the 2019 All-India Debt and Funding Survey (AIDIS),[6] lower than 5% of Indian households have PMJJBY and PMSBY accounts, with the possession being lower than 1% for low-income households.[7]

This analysis transient goals to synthesize current proof on the efficiency of PMJJBY and PMSBY since their inception, the explanations for low participation in these schemes, and the boundaries to their profitable implementation. We do that by specializing in the supply-side points that give rise to buyer safety considerations and that cut back the effectiveness of those schemes. We break down and consider every step of the client journey- from entry and possession of accounts to claims settlement and the mechanisms accessible for grievance redress. We additionally briefly describe the demand-side elements which have a bearing on the take-up of those schemes, such because the buyer’s context and preferences and attitudes in direction of insurance coverage.[8]    

We depend on current datasets to judge the penetration of those merchandise and converse to sector specialists from grassroots organisations, suppose tanks, and the monetary business to furnish a holistic perspective on the effectiveness of those schemes in assembly their targets.

We discover that the client journey in buying and availing the advantages of PMJJBY and PMSBY is marred by quite a few process-level inefficiencies. These inefficiencies end in buyer harms and provides rise to varied buyer safety considerations. These considerations relate to practices adopted by Monetary Service Suppliers (FSPs) within the sale and servicing of those merchandise that put the client’s curiosity and wellbeing in danger and due to this fact fail to ‘defend’ the client.

Click on right here to entry the complete analysis transient.

[1] We’re grateful to the Gates Basis for funding this venture as a part of Dvara Analysis’s Buyer Safety Program (CPP). We thank the advisory committee members of CPP and particularly Pawan Bakhshi, India Nation Lead at BMGF. We thank Indradeep Ghosh, Govt Director and Deepti George, Head of Technique and Deputy Govt Director at Dvara Analysis for his or her suggestions and inputs all through the course of the research. We additionally thank Shreya Tiwari who interned with us on this venture from April to Might 2022. Lastly, we wish to thank a number of business specialists we spoke to to be able to construct our understanding of the challenges in delivering the insurance coverage schemes beneath 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 premium quantity of PMJJBY was elevated from an annual quantity of ₹330 to ₹436 in Might 2022.

[4] The premium quantity of PMSBY was elevated from the preliminary ₹12 every year to ₹20 every year in Might 2022.

[5] Inclusive Finance India Report, 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 family wealth, we additionally calculated the online price of households by estimating the distinction between their worth of property and liabilities. We discovered that 75% to 80% of PMSBY and PMJJBY account possession comes from households that fall within the prime 60% of internet price distribution, whereas the underside 40% of households personal solely 20% to 25% of the entire pie. These numbers point out that the protection of those schemes stays insufficient amongst low-income households.

[8] A number of of those elements are, nonetheless, intricate and are extra complicated than what they appear on the floor. Subsequently, a neat bifurcation of demand versus provide aspect points won’t at all times be doable. Nonetheless, you will need to talk about these elements as they affect the uptake of those schemes. Furthermore, a number of of the ‘demand-side elements’ are additionally a end result of the present distribution realities of insurance coverage merchandise amongst low-income households, notably in rural settings. For instance, lack of know-how could possibly be considered as each a provide and a requirement aspect subject. One might argue that FSPs haven’t made sufficient effort to teach and inform potential clients, particularly amongst low-income, rural communities, about a wide range of insurance coverage merchandise accessible out there. This could possibly be a cause for the dearth of demand for time period life insurance coverage merchandise amongst low-income households. On the similar time, one might additionally argue that restricted publicity to the formal monetary system and low ranges of schooling of LIHs hinders their information concerning the formal insurance coverage markets at giant.

Cite this transient:


Agrawal, N., & Sharma, M. (2023). Challenges 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. “Challenges 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. “Challenges within the supply of Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and Pradhan Mantri Suraksha Bima Yojana (PMSBY).” Dvara Analysis.



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