Life insurance is one of the most crucial financial tools, ensuring financial safety for families in any critical situation. In this regard, the Indian Government has instituted various life insurance schemes to provide affordable coverage.

Let's explore government health insurance schemes in India, focusing on their key features, benefits, and the critical role they play in ensuring affordable healthcare for millions.

The Indian Government initiates, funds, or backs government life insurance schemes. Like conventional life insurance policies, government life insurance schemes provide financial protection to people and their families in case of the policyholder’s death, accidents, or disabilities.

However, government health insurance policies are designed for the marginalised or economically weaker sections of society to ensure that insurance benefits are accessible through financial inclusion.

The primary objectives of such schemes include:

Financial Security

Government life insurance schemes provide a crucial safety net for families, ensuring financial stability in case of the policyholder’s demise. For example, under the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), beneficiaries receive a sum assured of ₹2 lakh, helping dependents manage immediate expenses and future financial needs.

Welfare for Underprivileged Communities

 These schemes play a significant role in uplifting economically weaker sections by offering low-cost insurance. For instance, the Aam Aadmi Bima Yojana (AABY) provides coverage for landless rural workers, ensuring their families are not left without support in times of crisis.

Accessibility & Affordability

Unlike private insurance policies that may have high premiums and complex eligibility criteria, government schemes like PMJJBY and PMSBY (Pradhan Mantri Suraksha Bima Yojana) require minimal documentation and offer coverage at extremely low annual premiums—₹330 and ₹20, respectively—making them accessible to even daily wage earners.

Social Safety Net

Government-backed schemes act as a buffer against financial distress. PMJJBY, for instance, covers individuals aged 18-50 and ensures that their families receive financial aid upon their untimely demise, reducing the risk of poverty caused by loss of income.

Savings Promotion with Insurance Benefits

Some government insurance programs integrate savings components, helping policyholders build financial discipline. The Postal Life Insurance (PLI) scheme, originally designed for government employees and now extended to professionals and self-employed individuals, combines life coverage with attractive maturity benefits, making it a viable long-term savings tool.

Rural Empowerment & Financial Inclusion

Reaching underserved areas is a key focus of government life insurance. Rural Postal Life Insurance (RPLI) caters specifically to rural populations, ensuring even those in remote villages can access life insurance without needing to visit urban financial institutions. This helps bridge the gap between rural and urban financial security.

Consider the Coverage Amount

The coverage amount or sum assured should be sufficient to meet the financial needs of your dependents. Assess your family's current and future expenses, including education, housing, and daily living costs, to ensure an adequate sum.

A well-calculated coverage ensures your family is financially secure in your absence, covering all essential liabilities without financial strain.

For instance, Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) offers a coverage amount of ₹2 lakhs, which can help with immediate financial support. However, individuals with higher financial responsibilities may need additional coverage through schemes like Postal Life Insurance (PLI) or private plans.

Look for Affordability

Assess whether the premium amount suits your pocket. It is important to select a policy whose premium you can pay without neglecting other important financial commitments. A relatively cheap premium guarantees you can sustain the policy for a long time, offering uninterrupted protection for your family.

Government schemes like PMJJBY (₹330 per year) and PMSBY (₹20 per year) are designed to be cost-effective, making them accessible even to low-income individuals.

Check Additional Benefits

Look for schemes that offer more than basic life coverage, such as scholarships for children or savings components. Such value-added features enhance the overall utility of the policy, making it more beneficial for your family's future needs. Policies with such benefits can provide a dual advantage of insurance and savings.

For example, Aam Aadmi Bima Yojana (AABY) provides a scholarship of ₹100 per month per child (for up to two children) to help with education expenses.

Choose an Easy Application Procedure

Here is the eligibility criteria set by the government for availing of the above life insurance schemes:

• You must be an Indian citizen with valid ID proof
• You must be within the range of 18 to 70 years
• You must have a bank account with the debit facility to enable premium payments

Here are the advantages of government life insurance programs:

Income Replacement

Education Funding

Many government life insurance schemes have provisions for funding children's education. This ensures that dependents can pursue their educational goals without financial hindrance, securing a brighter future even in the policyholder's absence.\

For example, the Aam Aadmi Bima Yojana (AABY) offers a scholarship of ₹100 per month per child (for up to two children) studying in classes 9 to 12, helping families manage educational expenses even in the absence of the policyholder.

Tax Benefits

Premiums paid to government-sponsored life insurance plans are eligible for tax deductions in the Income Tax Act through Section 80C. In most cases, the death benefits received by the beneficiaries will be tax-free, providing further financial benefit to policyholders and their families.

Economic Inclusion

Double Profit

Affordability

Follow the below-mentioned steps to claim against a government life insurance plan:

Step 1: As soon as the policyholder passes away, it is essential to inform the insurance company or the bank where the policy is held. This can often be done by phone or by visiting a local branch.

Step 2: Request the necessary claim forms from the insurer. These forms can usually be obtained online from the insurer's website or directly from their office.

Step 3: Complete the claim form with accurate details, including information about the policyholder and the claimant and any other relevant information requested.

Step 4: Fill out the form and keep the documents handy, including the original policy document, an official death certificate, valid ID proof of the claimant (e.g., Aadhaar card or PAN card), relevant medical records (if applicable), and, in case of accidental death, an FIR or post-mortem report.

Step 5: Submit all completed forms and documents to the insurer. It’s advisable to keep copies of all submitted documents for your records.

Step 6: After submission, monitor the status of your claim by contacting customer service or checking online if such facilities are available.

Follow the below-mentioned steps to apply for a government life insurance plan:

Step 1: Go to a participating bank (like State Bank of India) or an insurance company that offers government life insurance schemes.

Step 2: Fill out and complete the application form with personal details such as name, age, address, income details, and nominee information.

Step 3: Submit all necessary documents, including proof of identity (Aadhaar card, passport), proof of age (birth certificate), income proof (salary slips, income tax returns), passport-size photographs, etc.

Step 4: Pay the required premium amount as specified in your chosen plan. Payment methods may include cash, cheque, or online transfer.

Step 5: Once your application is processed and approved, you will receive your policy document detailing coverage terms and conditions.