What Is Aam Aadmi Bima Yojana? - Know Details & Benefits

As per government reports, nearly 93% of the Indian work in the unorganised sector, and they don't have access to basic health insurance . To provide social security to these employees against occupational hazards, the government launched AABY – AamAadmiBima Yojana. Read on to know more about it.India has one of the world's largest workforce, and most workers belong to low-income groups. And, for the benefit of these workers, the government of India has introduced many schemes. One such scheme is the AamAadmiBima Yojana (AABY). The scheme, which literally translates to 'Common Man's Insurance Scheme,' provides financial aid to the people from low-income groups during emergencies.

Launched in October 2007, the AamAadmiBima Yojana is a social security scheme specifically meant for low-income groups. It benefits the people who are not on a payroll like fishermen, cobblers, rickshaw drivers, etc. Due to the low income, most of these workers do not have sufficient savings to meet grave contingencies like disability or death. The AABY provides them with monetary help to face such situations.

• Affordable One of the significant highlights of the AamAadmiBima Yojana has a low premium so that people from the lower-income groups can afford to buy the coverage. Additionally, 50% of the premium is borne by the government.
• Advanced insurance cover The AABY is known to be one of the most technologically advanced insurance policies in India. All the policyholders' data is digitised and monitored through a web-based system, which allows quick exchange and retrieval of information as needed. This is also useful in making the claim settlement process easy and hassle-free for the policyholders.
• Immediate assistance The policyholders can get the necessary information related to the policy and get their queries and grievances solved easily by visiting the nearly LIC branch. Policyholders can get a solution to their problems by getting in touch with the insurance representative through email and phone.

The AamAadmiBima Yojana is not available for all Indian citizens. To buy this insurance policy, an applicant must meet the following eligibility requirements:

• The applicant must be aged between 18 to 59 years.
• The applicant must belong to the Below Poverty Line (BPL) family. A person belonging to a landless household from a rural location can also apply for the scheme and avail of its benefits.
• Only one member of the family is eligible to apply for the scheme. The member should be the breadwinner.

The AamAadmiBima Yojana provides coverage against unfortunate members like disability or death for all eligible members. The coverage includes:

• Death due to a natural cause
• Death due to accident
• Permanent total disability or partial disability

The benefit received by the policyholders varies based on the contingency they face. Here is a table listed the coverage and the sum assured amount.

Through this social security scheme for the poor, the government helps the poor and provides monetary aid to the needy during a crisis. However, there are certain situations that the scheme does not cover. These include:

• Death due to mental disorder or suicide
• Death or disability due to war
• Cost of hospitalisation
• Death or disability due to participation in adventurous sports or substance abuse
• Death or disability due to involvement in illegal activities

The process for enrolling under the AABY is different from buying a standard insurance policy. Since AamAadmiBima Yojana is a government scheme, the applicant must visit the Nodal agency appointed by the state or central government of India for enrolment.While buying the policy, the applicant must mention the nominee details in the form. In the event of the policyholder's death or disability, the nominee will receive the compensation as per the policy terms and conditions.

The government of India has listed specific document requirements for the applicant who wishes to enrol under AABY. These include –

• Application form (duly filled and signed)
• Proof of identity
• Residence proof
• Income certificate
• Nominee application form

As compared to other insurance plans, the AABY claim process is easy. And, the policyholder can file a claim under four situations.

• Police FIR, video, or photographic evidence of the accident.
• Medical certificate issued by a government hospital, qualified government Orthopaedic doctor stating the details of the accident and type of disability.

• Claim procedure for death due to a natural cause In the event of the policyholder's death, the nominee must provide a copy of the death certificate obtained from the local authority while filing a claim. To get the compensation, the policy must be active at the time of the policyholder's demise, and the claim must be filed at the designated Nodal agency.The agency will verify the claim and check if the deceased was the only earning member and if he/she belonged to a BPL or Marginally above BPL family. Once the verification is completed, the agency will settle the claim.
• Claim procedure for accidental death The claim process for death due to an accident is similar to the natural death. However, apart from the death certificate and claim form, the nominee must submit additional documents, including – a copy of FIR, police inquest report, post-mortem report, and policy conclusion report.
• Claim procedure for disability The policyholder can file a claim for disability if he/she suffers from a partial or total disability. The process is simple. To file a claim, the policyholder must submit supporting documents to prove the disability, including:

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.