Two Micro-Insurance Schemes at a Village Camp
A financial-literacy camp is held at a village where the branch has been enrolling residents in the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and the Pradhan Mantri Suraksha Bima Yojana (PMSBY). Both schemes operate through the savings bank account with auto-debit consent, and neither requires a medical examination. Four residents approach the desk. Shanti, 46, wants a ₹2 lakh cover payable on death from any cause. Mohan, 58, a truck driver, wants cover only against accidents. Kiran, 24, wants the maximum cover available from both schemes. Ramesh, 72, also wants to enrol in both. Later, a fifth resident, Devi, 52, produces a completed PMJJBY form with the ₹436 annual premium already deposited and insists on enrolment. The branch has also received a claim: a resident enrolled in both schemes died in a road accident, and the family has been told by a relative that only one of the two schemes will pay.
1. Which of the four residents can be enrolled in which scheme, and what is the total annual premium the branch will collect from them?
Read the worked answer
Eligibility bands to apply. PMJJBY: entry age 18–50, cover ₹2 lakh on death from any cause, premium ₹436 per year. PMSBY: entry age 18–70, cover ₹2 lakh for accidental death or total disability and ₹1 lakh for partial disability, premium ₹20 per year.
| Resident | Age | PMJJBY (18–50) | PMSBY (18–70) | Premium |
|---|---|---|---|---|
| Shanti | 46 | Yes - this is the cover she wants | Eligible but unnecessary | ₹436 |
| Mohan | 58 | No - above entry age | Yes | ₹20 |
| Kiran | 24 | Yes | Yes | ₹456 |
| Ramesh | 72 | No | No - above 70 | Nil |
Total premium = 436 + 20 + 456 = ₹912 per year.
Why the reasoning matters. The two schemes are often treated as a single bundled product at camps, and the common error is to enrol everyone in both. Mohan is the instructive case: he is insurable, but only under the accident scheme, and enrolling him in PMJJBY would create a deduction without cover and a certain grievance at claim stage. Ramesh is above both entry bands and must be refused politely, with the reason recorded.
2. In the death claim, the relative says only one scheme will pay. Is that correct? Explain what the nominee is entitled to and how the claim should be processed.
Read the worked answer
The relative is wrong. Both schemes pay, independently.
Reasoning. PMJJBY is a one-year renewable term life cover that pays ₹2 lakh on death from any cause, and accidental death is simply one cause of death within its scope. PMSBY is a separate accident cover that pays ₹2 lakh on accidental death. They have separate enrolment forms, separate premiums (₹436 and ₹20), separate master policies and separate claim processes. Nothing in either scheme makes it secondary to the other, so the nominee of a member enrolled in both is entitled to ₹2 lakh + ₹2 lakh = ₹4 lakh on an accidental death.
Processing. The claim travels through the bank where the account is held: the nominee submits the claim form with death certificate, FIR or post-mortem report where required, and account details; the bank forwards it to the respective insurer. The two claims should be filed together so that one set of documents serves both, and the branch should record that both were intimated on the same date to avoid a limitation dispute later.
One caution to state at the camp. The cover is only as good as the auto-debit - an account with insufficient balance at the debit date lapses for that year, so the family should verify the debit each year.
3. How should the branch deal with Devi, aged 52, who has already deposited ₹436 for PMJJBY?
Read the worked answer
She cannot be enrolled as a fresh member, and the premium cannot be retained.
Reasoning. PMJJBY specifies an entry age of 18 to 50 years. Devi is 52, so she falls outside the entry band and her form cannot be accepted into the master policy whatever her fitness or willingness to pay. Accepting the ₹436 would create a deduction with no risk cover - the exact failure that produces mis-selling complaints and adverse audit observations. The rules on continued renewal apply to members who joined inside the entry window; they do not reopen enrolment for a new entrant above 50.
Action. (1) Do not add her name to the enrolment data. (2) Refund or reverse the ₹436 the same day and give her a written acknowledgement of the reversal. (3) Explain the entry-age condition in her own language, showing the form's age field so the refusal is not read as a branch decision. (4) Offer PMSBY, for which she is eligible at 52, with ₹2 lakh accidental death cover for ₹20 a year, and record that the alternative was offered. (5) Brief the camp volunteers, since the deposit suggests someone accepted the form without checking age at the counter.