Pradhan Mantri Suraksha Bima Yojana (PMSBY) is a government-backed life insurance scheme that provides financial protection to the family of the policyholder in the event of their untimely death. The scheme is available to individuals between the ages of 18 and 70 and offers different levels of coverage at an affordable premium. An investment calculator for PMSBY can help investors estimate the premium amount and the sum assured under the scheme.
Pradhan Mantri Suraksha Bima Yojana, often referred to as PMSBY, is an insurance scheme initiated by the Government of India. It was launched to provide affordable accident insurance to Indian citizens. The scheme aims to offer financial support to individuals and their families in the event of accidental death or disability.
Affordable Premium : One of the most attractive features of PMSBY is the low premium cost. For a nominal premium amount, individuals can avail of substantial insurance coverage.
Accidental Death Coverage : In case of accidental death, the nominee receives a substantial sum assured, providing financial relief to the insured person's family.
Total and Partial Disability Coverage : PMSBY also covers total and partial disabilities resulting from accidents, ensuring financial assistance during recovery.
Easy Enrollment : Enrolling in PMSBY is a hassle-free process, making it accessible to a wide range of individuals.
High Entry Age : The scheme accepts participants up to the age of 70, allowing a broader demographic to benefit from this insurance.
The Pradhan Mantri Jeevan Jyoti Bima Yojana (PMSBY) is a government-backed life insurance scheme in India, aimed at providing life insurance coverage to individuals at an affordable premium. It is not primarily designed to provide tax benefits, but it does offer a few indirect financial advantages. Here's what you need to know about the tax implications of PMSBY:
1. Income Tax Benefit : The premium paid for PMSBY is not eligible for any income tax deduction under Section 80C of the Income Tax Act, 1961. This means you cannot claim a tax deduction for the premium amount paid for this policy.
2. Death Benefit : In case of the unfortunate demise of the insured person, the nominee (beneficiary) receives the sum assured under the scheme. This payout is tax-free under Section 10(10D) of the Income Tax Act, meaning the amount received by the nominee is not subject to income tax.
3. Tax on Interest : Any interest or returns earned on the bank account where the premium is auto-debited or where the insurance payout is credited may be subject to income tax as per the applicable income tax rules.
4. Service Tax and GST : The premium paid for PMSBY includes service tax or Goods and Services Tax (GST), which is charged by the insurance provider. This is not a tax benefit but a part of the premium cost.
PMSBY is designed to be inclusive and accessible to a vast portion of the Indian population. For this scheme, individual must meet the following criteria to be eligible:
Age Limit : Individuals between the ages of 18 and 70 years can participate in PMSBY.
Bank Account : Applicants must have a savings bank account with a registered bank. This account is used for premium deductions and claim settlements.
Consent : Enrolment requires the participant's explicit consent to auto-debit the premium from their bank account.
In the unfortunate event of an accident, the claim process for PMSBY is designed to be efficient and user-friendly. Here's how it works:
Report the Incident : As soon as an accident occurs, inform your bank about the incident.
Claim Form Submission : Submit a duly filled claim form along with the necessary documents to your bank.
Verification : The bank will verify the details and documents submitted.
Settlement : If the claim is approved, the insurance amount will be disbursed to the nominee's bank account.
Enrolling in PMSBY is a straightforward process. Here are the steps to follow:
Visit a Registered Bank : Locate a bank where you have a savings account, and inquire about the PMSBY scheme.
Fill the Application Form : Obtain the PMSBY application form, fill it out with the required information, and provide your bank details.
Nominate a Beneficiary : Designate a nominee who will receive the insurance amount in case of an unfortunate event.
Pay the Premium : The annual premium for PMSBY is typically very affordable, making it easy for individuals from all walks of life.
Auto-Debit Authorization : Provide consent for auto-debit of the premium from your bank account.
Confirmation : Once your application is processed, you will receive a confirmation from your bank.
A PMSBY investment calculator is a tool that takes into account two main inputs: the age of the investor and the sum assured. Based on these inputs, the calculator estimates the premium amount that the investor will need to pay to receive the chosen sum assured. To calculate the premium amount for a PMSBY policy, the calculator uses a formula that takes into account the age of the investor, the sum assured, and the mortality rate.
Estimating the Premium Amount : By using a PMSBY investment calculator, investors can estimate the premium amount they will need to pay to receive their desired life insurance coverage.
Understanding the Impact of Age : The age of the investor can have a significant impact on the premium amount and the sum assured under PMSBY. By using a PMSBY investment calculator, investors can determine the impact of different ages on their premium and coverage.
Choosing the Right Sum Assured : The PMSBY scheme offers different sum assured options that investors can choose from. By using a PMSBY investment calculator, investors can compare the premium required for different sum assured amounts and choose the one that best fits their financial goals.
Planning for the Future : By using a PMSBY investment calculator, investors can plan for their future and ensure that they have sufficient life insurance coverage to protect their loved ones in the event of their untimely death.
Taking Advantage of Tax Benefits : PMSBY offers tax benefits under Section 80C of the Income Tax Act, which allows investors to claim deductions on the premium amount paid for the scheme. By using a PMSBY investment calculator, investors can ensure that they take full advantage of these tax benefits.
Premium = (Sum assured * Mortality rate) / 1000
Premium = the premium amount to be paid
Sum assured = the amount of life insurance coverage chosen by the investor
Mortality rate = the rate of death among the population of the investor's age group
A PMSBY investment calculator is a useful tool for investors looking to secure their future and protect their loved ones from financial hardships in the event of their untimely death. By using a PMSBY investment calculator, investors can estimate the premium amount and sum assured they will receive under the scheme, make informed decisions about their investments, and plan for their future. Whether you're an investor looking to secure your future or someone interested in investing in PMSBY, a PMSBY investment calculator can help you achieve your financial goals. So if you're ready to start investing in your future, start using a PMSBY investment calculator today!
Is there any time limit to claim PMSBY?
Claim form must be obtained from the bank or designated insurance companies or via the website. The form is to be duly filled. The completed claim form is to be submitted to the bank branch within 30 days from the day of occurrence of the accident.
Does PMSBY cover natural death?
What about coverage of suicide / murder? Natural calamities being in the nature of accidents, any death / disability (as defined under PMSBY) resulting from such natural calamities is also covered under PMSBY. While death due to suicide is not covered, that from murder is covered.
What are the terms and conditions of PMSBY?
The Scheme is available to people in the age group 18 to 70 years with a bank account who give their consent to join / enable auto-debit on or before 31st May for the coverage period 1st June to 31st May on an annual renewal basis. Aadhar would be the primary KYC for the bank account.