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An accident insurance cover of Rs 1 lakh is also given to all individuals who open a bank account under the Jan-Dhan Yojana.
The life insurance cover under the Pradhan Mantri Jan Dhan Yojana will not come free of cost to beneficiaries.
They will have to pay Rs 3 for every Rs 1,000 of sum assured and the size of the cover is Rs 30,000. Hence, a policyholder will need to pay Rs 90 for the cover.
According to sources, the life insurer has begun the process, though the cover will only be offered from January 26, 2015, for people who open a bank account under the Jan Dhan Yojana before that date.
Life Insurance Corporation (LIC) has set up a separate fund for this purpose. Industry sources said that based on the claims it receives, the insurer might seek additional funds from government if necessary.
Earlier, LIC had sought a clarification from the finance ministry about the scheme and the payment modalities. Some meetings were also held between LIC officials and finance ministry officials.
Till now, some 73 million bank accounts have been opened under the Jan-Dhan Yojana and many individuals would be eligible for the Rs 30,000 life cover by LIC.
Sources said that earlier, there were talks about having a minimal payment for this scheme by the beneficiaries. The process of claim settlement could be done through the Aam Aadmi Bima Yojana, a social security scheme administered by LIC.
The Bima Yojana's members are between 18 and 59 years of age. Here, the member should be the head of the family or one earning member of the below poverty line family or marginally above the poverty line under identified vocational group/rural landless household.
The premium to be charged initially under the scheme is Rs 200 a year per member for a cover of Rs 30,000, out of which 50 per cent is subsidised from the Social Security Fund.
In case of rural landless household, the remaining 50 per cent premium is borne by the state government or Union territory; in case of other occupational group, the remaining 50 per cent premium is borne by the nodal agency and/or member and/or state government/Union territory.
The life cover was not originally part of the Jan Dhan scheme announced in Prime Minister Narendra Modi's Independence Day address on August 15.
The life cover was announced on August 28, when the scheme was officially launched. An accident insurance cover of Rs 1 lakh is also given to all individuals who open a bank account under the Jan-Dhan Yojana.
