Aam Aadmi Bima Yojana (AABY): Eligibility, Features and Benefits

Table of Contents

What is Aam Aadmi Bima Yojana ?

The Government of India has introduced the Aam Aadmi Bima Yojana (AABY) which is a social security scheme focusing on the people living in rural areas of India. The Aam Aadmi Bima Yojana is a group insurance scheme which was introduced on 2nd October 2007. Further, the scheme started operating successfully in 2013. The operational activities related to the scheme are carried out by the Ministry of Finance of India under the supervision of the Government of India.

The Ministry of Finance of India had proposed for the merging of two social security schemes i.e. ‘Aam Aadmi Bima Yojana’ and the ‘Janashree Bima Yojana’. After the merging, this scheme is known as the ‘Aam Aadmi Bima Yojana’ which offers insurance coverage to the family head of a rural family or an earning member in the family. By this scheme, the beneficiaries of the scheme qualify to apply for this scheme without having to pay any money for this. The premium for this AABY insurance scheme is Rs. 200 and this amount is shared between the State Government and the Central Government.

The major objectives of the Aam Aadmi Bima Yojna (AABY) are:

To help the rural and landless people by providing them with social security and financial aid
To help in providing social security to those people who are below the poverty line.

Features of the Aam Aadmi Bima Yojana (AABY)

Let us list down some of the salient features of the Aam Aadmi Bima Yojana (AABY)

The major purpose of the Aam Aadmi Bima Yojana (AABY) is to make provisions for providing financial aid to the poor and rural people of the country
The scheme helps in providing social security not only to those people who are below the poverty line but also to those people who do not have access to modern health facilities
The Aam Aadmi Bima Yojna (AABY) also extends its scope to those middle-class people in the country who are not able to access improvised and good quality facilities related to health and medicines
The applicants while signing up for the scheme must provide the necessary documents and choose a nominee as well

Coverage Amount, Sum assured and premium rates of the Aam Aadmi Bima Yojana

The sum assured in case of the Aam Aadmi Bima Yojana is Rs. 30,000. This amount is received by the insured person at the time of maturity. In case of unfortunate death of the insured person when the Aam Aadmi Bima Yojna (AABY) is active, the sum assured is obtained by the nominee of the insured person
The premium in the case of the Aam Aadmi Bima Yojna (AABY) is Rs. 200 for each member. Half of the premium amount is paid by the Social Security Fund whereas the remaining half is paid by the State Government in case of rural households. If the insured person is not from a rural household, the remaining half of the premium is paid by the Nodal Agency or State Government or by the Union Territory
The Aam Aadmi Bima Yojna (AABY) provides coverage in the form of Death Benefit, Disability benefit or Accidental death benefit
- Death Benefit is payable in case of unfortunate death of the life insured. The death benefit payable is the sum assured amount i.e. Rs. 30,000
- In case of death of the life insured due to an accident, Rs. 75,000 is payable to the nominee of the life insured
- In case of permanent disability of the life insured due to an accident, Rs. 75,000 is payable to the life insured
- If the life insured has lost an eye or a limb in an accident, then he will receive Rs. 37,500 under the Aam Aadmi Bima Yojna (AABY)

Benefits provided by the Aam Aadmi Bima Yojana

Maturity Benefit

This can also be referred to as the sum assured amount obtained on the maturity of the scheme. An amount of Rs. 30,000 can be obtained by the life insured on the maturity of the Aam Aadmi Bima Yojana. In case of unfortunate death of the life insured, the nominee of the life insured will receive the maturity benefit if and only if the policy is kept active even after the death of the life insured

Scholarship Benefit

Scholarship benefit is an add-on included in the Aam Aadmi Bima Yojana (AABY). According to the provisions of the scheme, a maximum of two children of the insured person will be provided with a scholarship of Rs. 100 for each child in a month which will be payable on a half-yearly basis. The children must be studying between Standard 9th to Standard 12th to be eligible to avail this benefit.

Tax Benefit

By being a member of the Aam Aadmi Bima Yojna (AABY), an insured person can claim tax benefits under Section 80C and Section 10(10D) of the Income Tax Act, 1961.

Eligibility criteria for participating in the Aam Aadmi Bima Yojana (AABY)

The minimum age to become a member of the Aam Aadmi Bima Yojana scheme is 18 years and the maximum age is 59 years
The Aam Aadmi Bima Yojna (AABY) is available only to the head of a family or to the earning member of a family that lies below the poverty line
Necessary documents must be submitted for becoming a member of the Aam Aadmi Bima Yojna (AABY)

How the scheme helps Government efforts towards life insurance penetration?

The people of India belonging to the rural household and living in remote locations usually have to undergo several hardships including lack of good medical amenities and other basic facilities. The main objective of the Aam Aadmi Bima Yojana is to bring an improvement in the lives of these people. The scheme has provisions by which rural people can avail the benefits of AABY insurance coverage in case of unfortunate incidents like death accidents, permanent disabilities, etc. This scheme has been able to make rural India understand the importance of life insurance up to a large extent.

Claim procedure of the Aam Aadmi Bima Yojana (AABY)

Let us check out the details related to the Claim procedure of the Aam Aadmi Bima Yojana (AABY)

Claim procedure in case of death of an insured person

The nominee of the life insured must apply in case of the death of the insured person. The nominee will also have to submit a death certificate of the insured person. The Nodal Agency will appoint an officer who will be in charge of the verification of the claim made. Another document which is a certificate to confirm that the head of the family belongs to below the poverty line also needs to be submitted. After the verification of all the documents, the claim would be processed.

Claim procedure in case of Accidental death of the insured person

If the life insured meets with an accident, then a death certificate and the below-mentioned documents should also be submitted for claim settlement

Post mortem Report
A copy of FIR
Police Enquiry Report
Final Report of Police

Claim procedure for scholarship

For availing the benefits of the Scholarship Benefit, the child of the insured person should fill up an application form in every 6 months. This application form has to be submitted to the Nodal Agency for verification. Furthermore, the identification and verification of the child applying for the scholarship will be verified by the Nodal Agency.
After the verification procedure, the details of children qualified for scholarships such as name, school’s name, class, etc. would be declared by the Nodal Agency. After a tenure of every six months, the scholarship fee is credited into the bank account of the insured person for the child.

How to apply for the Aam Aadmi Bima Yojana ?

To apply for the Aam Aadmi Bima Yojana, the below-mentioned steps need to be followed.

The applicant should visit the Nodal Agency to apply for the Aam Aadmi Bima Yojana
The Nodal Agency might be an institution or an NGO which would have been appointed for carrying out the operations of the Aam Aadmi Bima Yojana (AABY)
The supervision might be under the central Government of India or the Union Territory of India
Suppose the applicant belongs to a Rural Household, he will have to connect with the appointed State Government or the Union Territory

There is a list of documents that need to be submitted for becoming a member of the Aam Aadmi Bima Yojna.

The Name of the applicant should be present in the Voters list
Aadhar Card
Ration Card
Extract of the applicant from the birth certificate and school certificate
An identity card that has been issued by the Government of India or issued by a well-known employer

Frequently Asked Questions

1. Which occupations and vocations are covered under the Aam Aadmi Bima Yojana (AABY) ?

Some of the occupations covered under the Aam Aadmi Bima Yojana (AABY) are mentioned below:

Carpenters
Cobblers
Handloom Weavers
Forest Workers
Hilly Area Women
Agriculturists
Plantation workers
Rural landless households

2. Who is eligible to avail the scholarship benefits?
Every insured person is eligible for availing the scholarship benefits. The child of the insured person must be studying in between Class 9th to Class 12th to be eligible to avail the scholarship benefits.

3. What is the eligible age bracket for getting included in the Aam Aadmi Bima Yojana ?
The eligible age bracket for getting included in the Aam Aadmi Bima Yojana is 18 years to 59 years.

4. What are the nodal agencies associated with the operations of Aam Aadmi Bima Yojana ?
Nodal Agencies are offices which are concerned with the resolution of operational issues associated with the projects or schemes initiated by the Government. Nodal Agencies can include NGOs, Panchayats or any Self Help Groups.

5. When was the Aam Aadmi Bima Yojana started?
The Aam Aadmi Bima Yojana (AABY) was started on 1st January 2013.