The government is considering higher insurance cover under its flagship Jan Suraksha schemes. As the schemes complete a decade, the question is no longer whether low-cost risk protection is needed. It is whether the original cover still offers meaningful protection to low-income households facing inflation, health shocks and unstable incomes.
The Department of Financial Services has confirmed that a proposal to raise the cover under the Pradhan Mantri Jeevan Jyoti Bima Yojana and the Pradhan Mantri Suraksha Bima Yojana from Rs 2 lakh to Rs 5 lakh is under review. A final call will depend on affordability, premium costs and intermediation expenses.
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Jan Suraksha schemes and financial inclusion
Launched in 2015 as part of the broader financial inclusion push under the Pradhan Mantri Jan Dhan Yojana, the Jan Suraksha schemes were designed to give low-cost insurance to households outside formal safety nets. Claims worth about Rs 25,000 crore have been paid under the two major schemes across life cover, accident insurance and pension claims.
PMJJBY offers life insurance cover for death due to any cause to individuals aged 18 to 50. PMSBY provides accidental death and disability cover to those aged 18 to 70. Both operate through annual auto-debit from linked bank accounts and rely on the banking network created by Jan Dhan.
The scale is large. PMJJBY has recorded enrolments of more than 274 million, while PMSBY has crossed 580 million. Along with the Atal Pension Yojana, which has over 90 million subscribers, the Jan Suraksha framework has become one of the world’s largest contributory social protection systems.
The annual premium of Rs 436 for PMJJBY and Rs 20 for PMSBY made insurance accessible to households that would otherwise remain uninsured. Public sector banks, led by the State Bank of India, and business correspondents have played a central role in enrolling rural and semi-urban customers. For many first-time users, trust in the local correspondent has mattered as much as the product.
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PMJJBY and PMSBY cover needs revision
The Rs 2 lakh cover may have appeared adequate in 2015. It looks thin today. Living costs have risen, medical expenses have increased, and income volatility among informal workers remains high. A death or disability in a low-income household can wipe out savings, force distress borrowing, and push dependants into long-term insecurity.
A higher cover can restore the relevance of these schemes. But insurance is a risk-priced product. Raising the sum assured to Rs 5 lakh will almost certainly require higher premiums unless the government absorbs part of the cost. The trade-off is clear. Higher cover improves welfare and risk protection. Higher premiums can weaken participation among the very households the schemes are meant to serve.
The Department of Financial Services is examining these scenarios. That is necessary. A poorly priced expansion can either drive users away or make the schemes unattractive for insurers.
Insurance premium and scheme viability
Insurer viability cannot be treated as a footnote. The government has tried to ensure that life and general insurers do not incur underwriting losses on these policies. That has helped sustain participation and claims settlement.
If cover is revised upwards, actuarial assumptions, risk pools and administrative costs will need recalibration. The industry has welcomed the proposal as a natural progression in a maturing social security framework. That support will hold only if pricing remains credible.
The first phase of financial inclusion brought people into the formal system through bank accounts, basic insurance and pension products. The next phase must ensure that these instruments provide adequate protection.
Informal workers need stronger social security
India’s informal workforce remains highly exposed to income shocks. The Atal Pension Yojana targets unorganised workers and has enrolled more than 9.04 crore individuals. It offers a guaranteed monthly pension of Rs 1,000 to Rs 5,000 after the age of 60. Yet the ground-level impact of such schemes is still limited by irregular incomes, weak awareness and low persistence.
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Low-cost insurance under PMJJBY and PMSBY is therefore a critical safety net. Higher cover can support household resilience and, indirectly, consumption stability. But the design must avoid attrition. Micro-insurance schemes are sensitive to price changes. When premiums rise sharply, enrolment weakens.
The government may have to consider differentiated pricing, targeted subsidies or limited cross-subsidisation to retain low-income subscribers. The objective should not be nominal expansion. It should be durable participation.
Social protection reform must preserve simplicity
There is also a case for administrative integration across insurance, health protection and pension initiatives. Such integration can reduce duplication and improve delivery. But it must not turn simple products into complex welfare architecture. The strength of Jan Suraksha has been affordability, ease of enrolment and automatic renewal.
That should not be sacrificed. A cover increase is justified, but only if the schemes remain easy to understand, cheap to maintain and viable for insurers. The policy task is not merely to raise the sum assured. It is to update India’s basic social protection compact without pricing out the people who need it most.