6 Things To Know About Modi Govt's Two Insurance Schemes
BENGALURU: As we all know that insurance plays a very important role in our day to day lives, as we have no idea what’s going to happen to us and our family members at the next movement. There are very few people in India who can afford to have insurance; keeping this in mind the government has announced two new insurance schemes as part of their social security program, according to yahoo.com.
The two insurance schemes introduced by the Modi Government is-‘The Pradhan Mantri Jeevan Jyoti Bima Yojna’ (PMJJBY) which is a life insurance policy, and the ‘Pradhan Mantri Jeevan Suraksha Bima Yojna’ (PMJSBM) is an accidental death and disability cover.
Problem of Pricing for Insurers And Banks:
Even though the schemes are a boon for the common man, the banks and insurance companies are not happy. The low premium rates mean they won’t be able to earn any revenue from these insurance policies, which the banks do not want to. Many banks believe at receiving reimbursement from the government, who will not even cover their service charges. Insurance companies fear whether they will be able to handle excessive claims in a year.
Governments Targets Towards the Banks:
The Modi government has set a target of covering about 40 crore bank account holders under these two schemes, but the banks were only able to enroll around 5.5 crore people into these schemes because of the limitations that these two schemes have within them.
Sure many lower classes and the middle class people will be benefitted by it but in the long run they themselves will be the sufferers because both these schemes won’t be able to give back your claims once you cross a certain age limit even though you had been paying the premium for it.
Importance of the Schemes:
We all know that India is a country run mainly by schemes and other budget related idea’s by the government. India still falls behind when it comes to the average insurance protected countries in the world. It is 3.9 percent in India while the world average is about 6.3 percent. Insurance penetration is calculated as the ratio of premium to the GDP, which is the measure of the economy.
This means that the percentage of people holding insurance of any kind is very low.
Read More: 6 Different Types Of Banks In India
