Thursday, 26 October 2017

Have you read the T & C of Pradhan Mantri Jeevan Jyoti Bima Yojana?

Pradhan Mantri Jeevan Jyoti Bima Yojana
Our beloved Prime Minister Narendra Bhai Modi has launched the Pradhan Mantri Jeevan Jyoti Bima Yojana as a measure of providing social security and life cover to individuals between the age of 18 years to 50 years. The scheme has been launched with much fanfare to make it successful. The nationalized banks are making all-out efforts to make the scheme successful as it is the cheapest Life Insurance Cover for any individual. The Bank customers are not being provided any Insurance Policy individually as the issuing bank will manage the Master Policy for its customers. 

Neither the customers are aware of the "Terms and Conditions" nor the hidden clauses. To create awareness among the prospective buyers of PMJJBY I was prompted to write this article as I enquired about the "Terms and Conditions" of the very cheap and popular social security measure. Though I am not eligible under the scheme, having crossed the maximum age bar of 50 years, though I thought it my duty to share the "Terms and Conditions" with public audiences so that they do not feel cheated as is the case with such popular schemes. While taking the Life Cover under PMJJBY from your Bank, please keep the following things in mind:

  1. Bank People may get your signatures in the prescribed form to debit the cost of insurance that is Rs.330-00 + Service Tax for life cover of Rs.2.00 lac. Before signing debit voucher please ensure that your bank balance does not go below the "Minimum Balance" prescribed by your bank lest you may feel cheated when subsequently minimum balance charges are debited to your account.
  2. Please ensure that correct "Date of Birth" is incorporated in your Bank Records so that your nominees do not get into any difficulty if at a later stage it is found that you were not eligible under the scheme as per Clause which reads as "The savings bank account holder of the participating banks aged between 18 years (completed) and 50 years (age nearer birthday) and who have given the consent to join the scheme during the ‘enrollment period’ are eligible to join the scheme".
  3. As per clause (5) of the scheme which reads "Satisfactory evidence of health as required by the Corporation shall be furnished by every eligible member, at the time of his entry into the Scheme, after the ‘ Enrollment Period’, as incorporated in the “Consent-cum-Declaration Form” for joining the scheme". As evidence of health is to be provided by the Saving Bank account holder - ask your bank as to who will bear the cost of - medical checkup if any to prove evidence of health lest the heavy cost may be debited to your saving account without your knowledge and you may feel cheated once again.
  4. Clause (6) of the scheme reads as " Renewal premium is chargeable as per the rate decided from time to time on Annual Renewal dates". It clearly indicates that rate of Insurance Premium can be increased forcing you to opt out of the scheme. Ask your bank that there will be no change in Renewal Premium. Further Clause (19) which reads as "The rate of premium and conditions of Assurance under which the Corporation is prepared to arrange the Scheme shall be subject to an agreement between the Bank and the Corporation. The conditions of acceptance of risks and rates of premium may be amended by the Corporation from time to time on any Annual Renewal Date subject to 3 months notice being given to the Bank" also deprives the Bank customers of its right to argue.
  5. Make Proper Nominations to receive the insured amount of Rs.2,00,000/- in case of any eventuality.
  6. Please ensure that your bank account remains active and has sufficient balance on the renewal date lest the Life Risk gets suspended due to either insufficient balance or inactive account.
  7. Clause (12) of the scheme stipulates that "The “Bank” or “Corporation” reserves the right to discontinue the Scheme at any time or to amend the Rules thereof on any Annual Renewal Date subject to giving one month’s notice. Any amendment to the Rules of the Scheme will be done based on mutual agreement between “Corporation” and “Bank”. This Clause reminds me of the Rajalakshmi Unit Scheme of UTI (RUS-92) in which the UTI in connivance with the then Government of India under the Finance Ministry of Ex-Prime Minister Manmohan Singh cheated the minor girl child through legislation passed in a way determinantal to the interests of the beneficiaries of the RUS-92 scheme.
I also caution my fans, audiences, and the public, in general, to check the "Terms and Conditions of Insurance" as I am of the confirmed opinion that Insurance is no substitute to Social Security.
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