Aam Aadmi Bima Yojana: Helping Low-income Families in India

In order to fight the grave issue of poverty in India, the Indian Government has introduced various schemes for the citizens to provide financial aid in time of need. One such scheme is the Aam Aadmi Bima Yojana which translates as ”Common Man’s Insurance Scheme” to make the economical wheel of the country keeps moving.

India is the second-most populous country in the world having a workforce of people belonging to different income groups. As a developing country, India has a large number of people belonging to low-income groups. In 2011, the Suresh Tendulkar Committee has defined the poverty line based on food, education, health, electricity, and transport. According to the Tendulkar Committee, a person who spends Rs. 27.2 in rural areas and Rs. 33.3 in urban areas in a day is defined as persons living below the poverty line.

About Aam Aadmi Bima Yojana

The Aam Aadmi Bima Yojana was launched on 2nd October 2007 as a social security scheme targeting India’s low-income families. The आम आदमी बिमा योजना aims to benefit those who are usually not on a payroll, such as auto drivers, cobblers, fishers, etc. Due to the low income, they might not think of saving money to face grave contingency like death or disability. Therefore, the Aam Aadmi Bima Yojana provides them with monetary aids to meet unfortunate conditions like death or disability.

The Aam Aadmi Bima provides a group insurance cover to individuals belonging to the specified groups and provides insurance coverage against natural and accidental deaths and disablements.

 Features  

Following are the features of the Aam Aadmi Bima Yojana-

1. The Aam Aadmi Bima Yojana covers accidental death, natural death, permanent partial disability caused due to accident, and permanent total disability suffered due to an accident.
2. The आम आदमी बिमा योजना covers the members of 48 groups that have been identified for coverage under the Yojana.
3. The amount of coverage under the आम आदमी बिमा योजना is fixed, and the amount depends on the contingency suffered.
4. In case of a claim, the lump sum amount of coverage is paid.
5. The Nodal Agency is responsible for implementing the आम आदमी बिमा योजना. A Nodal Agency can be a State Government, a Department of Central Ministry, Union Territory, an institutionalized arrangement, or a registered NGO that has been appointed for implementing the scheme.
6. The आम आदमी बिमा योजना can be bought through the Life Insurance Corporation of India (LIC). The Life Insurance Corporation is the only insurance company offering the scheme presently.
7. The charge of premium varies from one state to another, out of which 50 percent is subsidized and paid from the Government’s social security Fund. The rest 50 percent is paid either by the Nodal Agency, Union Territory, State Government, or Central Government, depending on which occupational cluster a beneficiary belongs. Thus, the premium of the Aam Aadmi Bima Yojana is sponsored by the Government.
8. No lengthy paperwork or complicated procedures is involved in the Aam Aadmi Bima Yojana. The beneficiaries have to show their identity proof to get enrolled for the आम आदमी बिमा योजना.
9. The process for claiming the insurance under the Aam Aadmi Bima Yojana is straightforward. All the policyholders have to produce the AABY card, and the claim will be settled automatically.
10. The policyholders can contact the nearest LIC (Life Insurance Corporation) branch by making a call to the contact person or sending an email.

Coverage under the Aam Aadmi Bima Yojana 

The eligibility parameters for availing coverage under the Aam Aadmi Bima Yojana scheme are as follows-

1. One member per family is covered under the scheme. The coverage allowed is either for the earning family member or the family head chosen by the family members.
2. The age of the insured person be between 18 years and 59 years.
3. The individual must belong to a Below Poverty Line (BPL) family or a family above the poverty line belonging to the vocational group identified under the Aam Adami Yojana or rural landless household.
4. The Aam Adami Bima Yojana has identified about 48 vocational groups, and all the members belonging to those groups can be covered.

Following are the identified groups-

1. Beedi workers
2. Cobblers
3. Carpenter
4. Fishermen
5. Brick kiln workers
6. Handloom weavers
7. Hamals
8. Handicraft artisans
9. Handloom and khadi weavers
10. Leather and tannery workers
11. Lady tailors
12. Physically handicapped people who are self-employed
13. Milk producers
14. Forest workers
15. Papad workers
16. Safai karamchari
17. Hilly areas women
18. Textile
19. Printing
20. Women associated with self-help groups
21. Overseas Indian workers

Significant Coverage

1. Natural death
2. Accidental death
3. Accidental permanent partial disability where the insured person loses one limb or sight of one eye
4. Accidental permanent total disability.

What is not covered under Aam Aadmi Bima?

The coverage that is excluded from the Aam Aadmi Bima Yojana include death or disability arising out of the following-

• Self-inflicted injuries or attempt of suicide
• Insanity or mental disorders
• Childbirth 
• Pregnancy
• War
• Chemical, radioactive, or biological weapons
• Dangerous and adventurous sports activity
• Criminal acts or breach of law

Eligibility for Applying under the Scheme

Following are the eligibility for applying under the Aam Aadmi Bima Yojana-

1. The age of the applicant must be between 18 years to 59 years.
2. The applicant must belong to a rural landless household (RLH) and Below Poverty Line (BPL).
3. Only one member of the family will be eligible for the scheme and must be the head of the family or the earning member.
4. The applicant, along with the application form, provides the supporting documents like age proof, identity proof, address proof, and income certificate.

Benefits under Aam Aadmi Bima Yojana

Following are the benefits under the Aam Aadmi Bima Yojana-

1. If the insured person dies a natural death during the policy period, the assured sum of Rs. 75,000 will be paid to the nominee or the surviving member of the family.
2. If the policyholder dies due to an accident, the amount of Rs. 75,000 will be paid to the surviving beneficiaries or their family members.
3. In case of an accident, an insured person suffers a permanent partial disability; he will be entitled to Rs. 37,500 coverage. If such beneficiary suffers from any permanent total disability, he will be entitled to claim an amount of Rs. 75,000.
4. The Aam Aadmi Bima Yojana also provides a scholarship of Rs. 100 per child per month. Such scholarship will be given to a maximum of two children between 9^th and 12^th standard.

Premium under the Scheme

The premium amount of Aam Aadmi Bima Yojana is Rs. 200, where 50 percent of the premium will be subsidized and paid from the Social Security Fund of the government. In case an individual belongs to the rural landless households, the remaining 50 percent of such premium will be paid by State Government or Union Territory. If such an individual is of any recognized vocational group, the remaining 50 percent of the premium will be paid by the nodal agency or the member of the State Government or Union Territory.

Documents under Aam Aadmi Bima Yojana

The following documents are submitted to get covered under the Aam Aadmi Bima Yojana-

* A valid proof of age, including the following documents:

1. School certificate
2. Ration card
3. Voter’s ID Card
4. Birth register
5. Aadhaar card
6. Identity card issued by a reputed employer or by a government department

Procedure for Claiming

The procedure for claiming the Aam Aadmi Bima Yojana depends upon the gravity of the contingency suffered. The Life Insurance Corporation of India settles the claims by a direct NEFT to the beneficiary’s bank account. In case the NEFT facility is unavailable, the money is credited to the bank account after attaining approval from the competent authority. In case approval has been obtained, the claim can be paid through an account payee cheque or any other mode as referred by the Life Insurance Corporation of India.

Claim Procedure for Natural or Accidental Death

In case the insured dies during the tenure of coverage, the nominee should claim the Life Insurance Corporation of India (LIC). After filling up the death claim form the nominee should submit the form along with the death certificate of the insured to the designated personnel of the nodal agency. The designated officer after checking and verifying the claim form would submit the death certificate and a certificate stating the eligibility of the insured person.

The documents required for the death claim are as following;

• A filled-in claim form
• Original and attested copy of death certificate

The documents required in case of accidental deaths;

• A copy of am FIR filed with the local police
• Post-mortem report
• Police inquest report
• Final police report

Claim Procedure for Disability

The insured person can claim after submitting the following documents:

• The documentary proof of the accident
• Medical certificate issued by the Government Civil Surgeon or a qualified Government Orthopaedic. Such a certificate will certify that such insured person has suffered permanent total or partial disability.

Claim Procedure for the Scholarship

After qualifying for the scholarship benefit, the insured must fill in an application form for obtaining the benefit under the Aam Aadmi Bima Yojana. Such form is required to be filled half-yearly and then to the Nodal Agency.

The Nodal Agency will identify the eligible students to receive scholarship benefits and submit the list of such identified students to the Pension & Group Scheme unit of LIC containing the following details-

• Name
• Name of school
• Class
• Insured member name
• Policy number of the master policy
• Membership number
• NEFT details

Conclusion

The Government of India has launched the Aam Aadmi Bima Yojana to provide free or subsidized insurance cover to the rural population and the weaker sections of society. The आम आदमी बिमा योजना is a scheme aimed at the social welfare of the backward classes.

By March 2015, about 32.75 lakh lives were covered under the Aam Aadmi Bima Yojana.

The claims paid in the financial year 2014-15 under 42,000 policies was more than Rs. 14 lakhs. The claims of scholarships were paid about 6.20 lakh children more than Rs. 41.81 crores.

The Aam Aadmi Bima Yojana is expected to become popular among the poor and increase the penetration of insurance in India’s rural areas. Aatmnirbhar Sena is here to assist you in meeting all the needs to avail the benefits of the Aam Aadmi Bima Yojana scheme. In turn, it would increase the standard of living of the rural population and help in the growth of the Indian economy.