Pradhan Mantri Jeevan Jyothi Bima Yojana – a challenge for Insurance Companies

Life insurance products are supposed to offer financial security to the families of the individuals buying them, in case they pass away. Being one of the cheapest instruments available in the market, it is known to provide extensive insurance cover to the insured for a small amount of premium.

To make these schemes attractive as well as to offer investment benefits, several companies such as MaxLife, ICICI Prudential, and SBILife have launched different types of life insurance policy contracts in the market. Selling these schemes have always been a challenge for the companies, so they have been holding insurance training programs for agents. However, the challenge just got tougher after Prime Minister Narendra Modi announced the launch of Pradhan Mantri Jeevan Jyothi Bima Yojana.

What is Pradhan Mantri Jeevan Jyothi Bima Yojana?

It is a life insurance scheme launched by the Government for the people wherein a life cover of Rs. 2 lacs is available for a person against the payment of Rs.330 as annual premium. This scheme can be availed by any person holding a savings account with banks. Any person within the age group of 18 to 50 years is eligible to purchase this policy.

Why it is a challenge for other insurance companies?

Several Life insurance companies in India are known to offer different plans in the country. Several of these insurers are known to offer entry-level plans with extensive amount of insurance cover, but are known to cost high.

However, the PMJJBY is known to provide the same extent of cover for a lesser premium. Thus, agents are finding it difficult to sell other insurance products to people. Even corporate agents of insurers who are known to solicit business on behalf of insurance companies are known to complain that their costs have increased. Thus insurance companies are facing a lot of problem for selling their products.