Create Special Alert in Banking System To Ensure Benefits of PMJJBY and PMSBY Reach Families of Policyholders: AIBEA

Moneylife Digital Team 09 June 2023

The All India Bank Employees' Association (AIBEA) has urged the Indian Banks' Association (IBA) to create a special alert in bank accounts to ensure the benefits of Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and Pradhan Mantri Suraksha Bima Yojana (PMSBY) reach the families of victims in the Odisha train accident.

CH Venkatachalam, general secretary of AIBEA, in a letter to Sunil Mehta, chief executive officer (CEO) of IBA, says, "Since separate insurance policies are not being issued to the account holder who is members of these two schemes, their family members are mostly unaware that the deceased person had subscribed to these insurance schemes and hence are eligible to claim the insured amount. Hence these benefits will remain unclaimed."

"To ensure that the family of those who died in the accident get the benefit of the insurance scheme, a special alert can be made available in the bank account in the CBS system so that when the nominee or family of the deceased person comes to the bank to wind up the account or to delete their names from the joint account, the alert will help the branch staff to inform the nominee or claimants that the deceased account holder was a subscriber to the insurance scheme, which will help them to initiate the process to claim the amount," he says.

At least 288 passengers died in the horrific train accident on the evening of 2nd June near Balasore in Odisha.

While PMJJBY provides a life insurance cover of Rs2 lakh, PMSBY provides the policyholder Rs2 lakh accident insurance cover. Banks do auto debit from the accounts of the account holders towards the premium payable for these policies. Under these policies, the victims' family is eligible to claim the insurance amount in case of death or death due to accidents or even loss of limbs in such accidents.

However, at present, banks do not have the facility of automatic alerts about the existence of the two policies -- PMJJBY and PMSBY when the nominee or legal heir intimates the account holder's death. Often, the account holder or the legal heir is unaware of the insurance coverage.

Automatic alerts about the existence of the two policies -- PMJJBY and PMSBY, would help the families of the deceased persons to claim the insurance, not just in the Odisha train accident case, but even in other cases.

Separately, the insurance regulatory and development authority of India (IRDAI) has instructed life and general insurers to settle the claims of the Odisha train accident victims. "IRDAI has sent instructions for quick settlement of claims pertaining to life and accident insurance for the victims of the rail accident by dispensing some of the requirements or relying on alternate documents," Debasish Panda, chairman of IRDAI told IANS.

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