Fact Check: Misleading Viral Post Claims Government Insurance Scheme May Be Availed for COVID-19 Deaths
A message is being circulated widely on WhatsApp and other social media with a claim that the benefits under two of the prime minister's (PM's) schemes—the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and Pradhan Mantri Suraksha Bima Yojana (PMSBY)—can be claimed for COVID-related deaths. 
 
The advisory post reads “If someone in close relative/friends circle has died due to Covid-19 or for any reason, ask the bank for an account statement or passbook entry from 01-04 to 31-03 of the financial year. Seeing the entry of Rs. 12/- or Rs. 330/- , mark it, Go to the bank and Claim for Insurance Rs 200000." 
 
We found out that the viral message is misleading and only partially true. It is distressing to note that fake news is being widely spread across all social media platforms at a time when the country is battling the current COVID crisis accompanying the second wave. 
 
 
Let us fact-check the claims made in the now viral post. The message claims that the benefits under the PMJJBY and PMSBY schemes can be claimed for COVID-related deaths.
 
In 2015, the government had launched these two schemes under Jan Dhan - Jan Suraksha Yojana initiatives for providing social security at affordable premiums for citizens across the country having savings bank accounts.
 
While it is true that the PMJJBY scheme is applicable to COVID deaths (subject to eligibility and claims process), the PMSBY offers insurance cover of Rs2 lakh for accidental death or total permanent disability to people in the age group 18 to 70 years. Moneylife contacted the national-toll free helpline of PMSBY wherein the operator stressed that COVID-19 deaths are not considered accidental under the current guidelines. Thus the maximum benefit under the scheme (PMJJBY) is Rs2 lakh, not Rs 4 lakh as mentioned in the viral post.
 
However, this scheme ceases to function if the claimant does not have a bank account or does not belong to the 18-55 age group. COVID-19 deaths of people older than 55 are not eligible to benefit from this scheme. Nominees claiming for compensation under this scheme need to file their claims with their respective banks (same branch having the underlying bank account) within 30 days of the unfortunate death.
 
On the ‘Jan-Dhan Se Jan Suraksha’ portal, we checked the rules for PMJJBY scheme and found that the PMJJBY scheme offers life insurance cover for ‘death due to any reason’. The Life Insurance Corporation of India (the administrator for the policy) too issued a press release last year saying, “the Death claims arising due to COVID-19 shall be treated at par with other causes of death and payments shall be made on an urgent basis. Already death claims due to COVID-19 under 16 policies have been settled without losing any time.”  The Life Insurance Council too stated, "the clause of ‘Force Majeure’ will not apply in case of COVID-19 death claims. All life insurance companies will process COVID-19 death claims.”
 
A fact check by the Press Information Bureau (PIB) too debunked the fake claims and stated that the the PMSBY does not cover covid related deaths, while PMJJBY covers covid deaths with certain conditions. In fact, the PIB handle even put out a tweet on Twitter last year clarifying the details and urging people not to fall a prey to such misleading posts.
 
 
 
About PMJJBY
The Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) is a one-year life insurance scheme, renewable every year, offering coverage for death due to any reason and is available to people in the age group of 18 to 50 years (life cover up to age 55) having a savings bank account who give their consent to join and enable auto-debit. Since the policy document says death due to any reason is covered, technically speaking covid is also covered. 
 
Under PMJJBY scheme, life cover of Rs2 lakhs is available for a one year period stretching from 1st June to 31st May at a premium of Rs330 per annum per member and is renewable every year. It is offered through LIC and other private life insurance companies. For enrollment, banks have tied up with insurance companies. Participating bank is the master policy holder.
 
The assurance on the life of the member shall terminate on any of the following events and no benefit will become payable thereunder: 
1) On attaining age 55 years (age near birthday) subject to annual renewal up to that date (but entry will not be possible beyond the age of 50 years). 
2) Closure of account with the bank or insufficiency of balance to keep the insurance in force. 
3) A person can join PMJJBY with one insurance company with one bank account only.
 
The PMJJBY is available to people in the age group of 18 to 50 years having a bank account who give their consent to join/enable auto-debit. Aadhaar is used as the primary know-your-customer (KYC) document for the bank account.
 
The PMJJY is essentially a group term assurance product. In any group insurance policy, premium is usually very low because a very large number of lives are available and there is very little chance of large-scale adverse selection. As on 11 September 2020, 74.6 million people were enrolled under this scheme.
 
The risk cover under PMJJBY may not be sufficient for better-off people of the urban areas. But, it is really something for the poor people. The money can help the family of a deceased policyholder to be back on its feet very quickly.
 
As PMJJBY has become a popular protection plan among the masses, it can give a lot of financial security to the poorer section of society. In fact, it can be bought by any person in the age group of 18 to 50, with a bank account. 
 
It is understood that insurers are visibly shaken about the rising claims expenses on these products and want the prices to be revised. The government’s term insurance scheme, with Rs330 as premium, and its accident insurance scheme, with Rs12 as premium, are the cheapest life insurance and accident insurance products available in the Indian market. Regular term plans of the same size (Rs2 lakh cover) would cost up to Rs900-Rs1,000 per year while accident insurance covers would cost up to Rs600-Rs700 per annum.
 
Amidst rising claims under these two schemes, insurance companies have asked the finance ministry for an increase of at least 25%-30% in the premium rates for the PMJJBY and PMSBY. They argue that it has been five years since these schemes were launched but there has been no increase at all in the premium rates. One private insurance company head has admitted that it is not sustainable for insurers to continue offering these policies at such low rates and many will be forced to exit these schemes if premiums are not allowed to be hiked this year.
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