Effectiveness of Financial Inclusion in India under PMJJBY

Abstract

The Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), launched in May 2015, aims to extend affordable life-insurance cover to Indians aged 18-50 with a savings bank account, via a nominal annual premium and auto-debit enrolment. This study examines the scheme’s progress, awareness levels, operational challenges and outreach among rural and informal segments. Using secondary data from official disclosures, IRDA reports, and prior empirical research, the paper evaluates enrolment trends, claim settlement performance and the barriers to effective penetration—especially among low-income and rural populations. Findings reveal broad uptake and potential for social safety-net expansion, yet highlight persistent gaps in beneficiary awareness of policy coverage, claim-processes, and renewal mechanisms. The role of banking channels and digital enrolment is crucial but unevenly effective. The paper concludes by recommending targeted awareness campaigns, simplified claim procedures, and enhanced delivery mechanisms to bolster financial inclusion through life insurance.

Introduction

Financial inclusion, the provision of affordable financial services to all, especially vulnerable and low-income groups, is crucial for equitable economic development in India. Social security schemes under the Jan Dhan Yojana, particularly the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), play a key role in this effort by offering low-cost life insurance (?2,00,000 cover for ?436 annual premium) to bank account holders aged 18–50. PMJJBY aims not only to provide risk protection but also to promote deeper engagement with formal financial systems, particularly in rural and semi-urban areas.

Literature highlights that while PMJJBY has achieved large-scale enrollment (over 22.97?crore), challenges persist in awareness, claim settlement, and effective usage, especially among the informal and marginalized sectors. Studies also indicate that enrollment alone does not ensure meaningful financial inclusion without accompanying education, accessibility, and operational efficiency. Key gaps include regional disparities, gender responsiveness, and the scheme’s impact on actual financial behavior and economic security.

The study aims to evaluate PMJJBY’s effectiveness in enhancing financial inclusion, analyze barriers to adoption and claim utilization, assess demographic and regional variations, and provide policy recommendations to improve outreach, sustainability, and gender inclusivity. It seeks to bridge research gaps by examining both quantitative uptake and qualitative beneficiary experiences, contributing to evidence-based strategies for inclusive financial development in India.

Conclusion

The Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) has emerged as a significant step toward enhancing financial inclusion and social security in India. It has successfully provided affordable life insurance coverage to millions, especially among low-income and rural populations. However, challenges such as low awareness, limited understanding of claim procedures, and uneven rural outreach continue to hinder its full potential. Strengthening information dissemination, simplifying claim processes, and improving renewal mechanisms can further enhance its impact. Overall, PMJJBY represents a vital initiative in building a financially secure and inclusive society, aligning with the government’s vision of “Insurance for All.”

References

[1] Shinde, R. L., & Chavhan, R. N. (2016). “Social security life insurance scheme Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY): Actuarial insight based on Indian mortality”. Indian Journals, Vol. 5(6), pp. 68-74. DOI: 10.5958/2319-1422.2016.00015.1. [2] Anitha, R. (2017). “A Descriptive Study on Prime Minister Modi’s PMJJBY, PMSBY Insurance Schemes”. SIJCOM (or other journal), Vol. 5(4), pp. 183-191. [3] Johia, V. (2017). “Roadmap to Social Inclusion through Financial Inclusion: Pradhan Mantri Jeevan Jyoti Bima Yojana, Pradhan Mantri Suraksha Bima Yojana, Atal Pension Yojana”. International Journal of Scientific & Engineering Research, Vol. 8(2), Feb-2017. [4] Balamurugan, J., Johns, G. M., Das, P., & Basu, P. (2023). “Utilization of PMSVANidhi and PMJJBY by the Urban Informal Sector”. Journal of Scientific Research and Reports, Vol. 29(7), pp. 107-120. DOI: 10.9734/jsrr/2023/v29i71765. [5] Setia, P. (Year?). “Securing Futures and Finances: The Life Insurance Business in India”. Journal of Banking & Insurance Law. Includes discussion of PMJJBY among other life-insurance developments in India.

Copyright

Copyright © 2025 Vishal Keshari. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.