Ministry of Finance approved the merger of Social Security Schemes- Aam Admi Bima Yojana (AABY) and Janashree Bima Yojana (JBY) and the merged scheme was renamed “Aam Admi Bima Yojana” which came into effect from January 1, 2013. This policy offered by Life Insurance Corporation (LIC) is beneficial for workers in unorganised sectors.
Aside from the life insurance cover, this scheme provides coverage to the head of a rural landless family in the state of partial and permanent disability or to an earning member of the family.
The death or disability claims under the scheme will be settled by the P&GS unit of LIC by making direct payment to the beneficiaries through NEFT or where there is no NEFT facility available then in such cases directly to the bank account of beneficiaries with prior approval from competent authority the A/C payee cheque or claim can be paid by any other mode as decided by LIC.
In the event of the death of the member during the period of coverage and while the policy is in force, the nominee will have to make an application along with Death Certificate for payment of claim amount to the designated official of the Nodal Agency.
Every member shall appoint a nominee to receive the claim amount after their death. The nomination form is a part of the membership application form and it should include particulars of the nominee to receive the claim amount. It should be ensured that this procedure is followed without fail so that there is no difficulty at the time of settlement of death claims. The nomination form will be kept in the custody of the Panchayat/Nodal Agency and shall be forwarded to LIC along with the claim papers on the death of the member.
Worth mentioning here is that under this scheme, the nodal agency means the Central Ministerial Department/State Government/Union Territory of India/any other institutionalized arrangement/any registered NGO appointed to administer the scheme as per the rules. In the case of “Rural Landless Households”, the nodal agency will mean the state government/Union Territory appointed to administer the scheme.