Spend, Save and Invest Smartly
You must have heard the famous saying
" You don’t need to pray to God any more when there are storms in the sky, but you do have to be insured "
You work from dawn to dusk to provide a good life for your family. Unfortunately things are so expensive these days. You want to buy a new car for your family. A good education for your children. New clothes for your spouse for the upcoming festival. But what if something untoward were to happen to you? How would your family take care of themselves? Things would continue to remain expensive. The need for life insurance is too great these days. Fortunately a term life insurance comes at a cheap price. A few thousands paid in premiums each year for a term life insurance plan means your family could get lakhs of rupees (sum assured) on your God forbid… untimely demise. Of course… if you survive the plan you and your family get nothing. But what about your poor driver or household help? What if something were to happen to them? How would their families survive? For the poor people of the nation and to promote financial inclusion in the country the Government has launched a low cost life insurance scheme called the Pradhan Mantri Jeevan Jyoti Bima Yojana.
This is a life insurance policy which covers death due to
If you are an Indian citizen in the age group of 18-50 years you can avail life insurance under this scheme. If you join the scheme before completing 50 years of age you can continue to avail life insurance under this scheme till you attain the age of 55 years provided you pay the premiums regularly. You need to have a bank account linked to your aadhaar number. You will have to subscribe to this scheme on the 1st of June every year.
This scheme is expected to be launched on 1st June 2015.
You will have to pay a premium of INR 330 a year if you want to avail life insurance under the Pradhan Mantri Jeevan Jyoti Bima Yojana.
You will have to pay this premium each year and it will be automatically debited (auto-debited) from your bank account. You can also opt for a longer time frame of 2-4 years and each year the premium will be auto-debited from your bank account.
Your nominees (family) get a sum assured of INR 2 Lakhs if you (policyholder) die of natural causes or an accident. It looks a very small amount for a life insurance policy….just a sum assured of INR 2 Lakhs. But you are paying a mere 1 Re a day (INR 330 a month).
You might not require life insurance of such a small amount but your driver might. You would be contributing to the nation by ensuring financial inclusion to all its citizens.
Yes…you can nominate your family members to enjoy the death benefits of the life insurance scheme. Nomination is compulsory under the Pradhan Mantri Jeevan Jyoti Bima Yojana. You need to specify the name of your nominee in the form along with his/her relationship to you. In case your nominee is a minor you also need to specify the name of the guardian
All the PSU general life insurance Companies such as LIC offer this scheme. Private insurers who are willing to join the scheme and tie up with banks such as SBI can do so. You have to fill a simple application form of the Pradhan Mantri Jeevan Jyoti Bima Yojana scheme and submit it at any branch of LIC of India.
The amount of INR 330 you pay as a premium towards the Pradhan Mantri Jeevan Jyoti Bima Yojana is eligible for tax deduction under Section 80 C of the income tax act. The death benefit of INR 2 Lakhs your nominees (family) get from this life insurance scheme are tax free under Section 10(10D) of the income tax act. If your nominee’s get more than INR 1 Lakh from the life insurance policy as death benefit then TDS (Tax Deducted at Source) will be deducted at the rate of 2% from the total proceeds you get from the life insurance policy. No TDS will be deducted from the proceeds of the life insurance policy if the form 15 G or form 15 H in case of senior citizens, is submitted to the Insurer.
The Pradhan Mantri Jeevan Jyoti Bima Yojana is a low cost term life insurance scheme.
If you are under 50 years of age and you are not eligible to get term life insurance (say you suffer from lifestyle diseases or the premiums you have to pay for term life insurance cover are ridiculously high) you can subscribe to the Pradhan Mantri Jeevan Jyoti Bima Yojana.
You can also take this scheme as a backup term life insurance cover.
Remember : You don’t buy life insurance because you are going to die, but because those you love are going to live.