Insurance – Parliamentary Reply Highlights Gaps in India’s Flagship Life Cover Scheme
Insurance – A recent exchange in Parliament has brought renewed focus to how effectively the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) is serving its intended beneficiaries. Responding to a starred question raised by Sudama Prasad in the Lok Sabha on February 2, 2026, Finance Minister Nirmala Sitharaman shared updated figures that point to both the scale of the scheme and the challenges affecting its continuity. Official data shows that less than half of all enrolled individuals were actively covered as of early February 2026, with policy lapses largely linked to insufficient bank balances at the time of renewal.
Origins and structure of the insurance programme
PMJJBY was introduced on May 9, 2015, as part of the government’s Jan Suraksha social security initiatives aimed at expanding basic financial protection. The scheme is voluntary and is open to individuals between the ages of 18 and 50 who hold a savings bank account. Enrollment requires consent for an annual premium to be automatically deducted from the subscriber’s account.
Under the scheme, subscribers receive a life insurance cover of ₹2 lakh in the event of death. The annual premium is fixed at ₹436 and is typically debited at the end of May. Each policy year runs from June 1 to May 31, and continuation into the next year depends entirely on whether the linked bank account has sufficient funds at the time of auto-debit.
Enrollment growth versus active coverage
According to the finance ministry’s statement, cumulative enrollment under PMJJBY crossed 26.3 crore by January 2026. Participation has expanded steadily across nearly all states and Union Territories, reflecting broad outreach and awareness of the scheme over the past decade.
However, the same data reveals a sharp drop when it comes to active coverage. As of early January 2026, only about 12.1 crore policies remained in force. This means that roughly 46 percent of those who had signed up were actively insured, while the rest had seen their policies lapse over time.
Lapses driven by financial constraints
The primary reason for policy discontinuation is the absence of adequate funds in beneficiaries’ bank accounts during the renewal window. When the auto-debit fails, the policy lapses automatically, leaving the subscriber without coverage for the new policy year.
The finance ministry noted that such lapses have increased alongside the scheme’s expansion. Cumulative discontinuations due to insufficient balance crossed 2.3 crore by May 2025, rising year after year. The trend highlights a structural challenge: the scheme largely targets economically vulnerable groups whose incomes are often irregular, making timely premium deductions uncertain.
Claim settlement remains a strong point
Despite concerns over continuity, PMJJBY has performed strongly in terms of claim settlement. Government data indicates a claim settlement ratio of 99.94 percent, with most states reporting figures in the high nineties. This suggests that once a valid claim is filed, beneficiaries or their families face minimal hurdles in receiving the insured amount.
As of January 2026, more than 10.5 lakh claims had been registered across the country, and over 10.2 lakh of these had already been settled. According to the Insurance Regulatory and Development Authority of India, the average time taken to process and settle claims under the scheme ranges from less than one day to about 17 days, depending on documentation and local processes.
Balancing scale with sustainability
The parliamentary reply underscores a mixed picture. On one hand, PMJJBY has achieved unmatched scale for a government-backed life insurance programme and has built a reputation for fast and reliable claim settlement. On the other, high lapse rates raise questions about how to ensure sustained coverage for the very households the scheme is designed to protect.
As policymakers review these figures, the challenge will be to find ways to reduce attrition without compromising the scheme’s simplicity or affordability, while maintaining its strong performance in claims.