Financial planning through government schemes

K. ARAVIND

It is not easy for the financially backward to have adequate investment and insurance. However, through schemes introduced by the government for social security, the lower strata of society can be assured of investment and insurance to some extent. But unfortunately there is limited awareness among them about such schemes.

The benefit of all such welfare schemes is available to an individual only if he has a bank account. Most welfare schemes pay only through a bank account. So the first thing to do is to open a bank account under the Pradhan Mantri Ja Dhan Yojana, which was started to expand financial inclusion. Account holders under Pradhan Mantri Jandhan Yojana will get life insurance coverage of Rs.30,000 and accident insurance coverage of Rs.1 lakh. The next step is to make sure you have an Aadhaar card.

The Central Government has made it possible to take out a term insurance policy with a small premium. Under the Pradhan Mantri Jeevan Jyothi Bhima Yojana, coverage of Rs.2 lakhs is available to persons between 18 and 50 years of age. The annual premium for this is Rs.330. Premium can be paid from the bank account every year through auto debit system.

Currently, there are certain conditions for taking out a term policy from insurance companies. Insurance companies only offer term insurance to those who have a job or business in the organised sector and have an annual income of over Rs.2 lakh. At the same time, Jeevan Jyothi Bhima Yojana provides insurance cover to the lower strata of the society.

Personal Accident Insurance is available under the Pradhan Mantri Suraksha Bhima Yojana. With a premium of Rs.12 a year, coverage ranges from Rs1 lakh to Rs.2 lakhs.

Free health insurance coverage of up to Rs.5 lakhs is also available under Pradhan Mantri Jan Arogya Yojana. No premium is required to get coverage under this scheme. Coverage under this scheme is available only to those who are financially backward. This policy only allows unskilled workers in the unorganised sector.

Pradhan Mantri Sram Yogi Mandan Pension Yojana also provides pension planning to the unorganised sector workers. People between the ages of 40 and 60 can get a pension of Rs.3,000 every year from the age of 60 if they pay a premium of Rs.200 a year.

While term insurance, personal accident insurance, health insurance and pension planning are almost inaccessible to the financially backward, such social security schemes can make it a reality to some extent.