Insurance and Pension in India — LIC, IRDAI, PM Schemes, Ayushman Bharat

Insurance and pension schemes are frequently tested in Kerala PSC, particularly government social security schemes launched under Jan Suraksha and Ayushman Bharat.

Insurance Sector in India

Evolution

Year	Event
1818	Oriental Life Insurance Company — first life insurance company in India (Kolkata)
1870	Bombay Mutual Life Assurance — first Indian-owned insurance company
1907	Indian Mercantile Insurance — first general insurance company by Indians
1938	Insurance Act passed to regulate the sector
1956	Life Insurance Corporation (LIC) established — nationalisation of life insurance; 245 companies merged
1972	General Insurance Corporation (GIC) established — nationalisation of general insurance
1999	IRDA Act passed; sector opened to private players
2000	IRDAI (Insurance Regulatory and Development Authority of India) established
2015	FDI limit in insurance raised to 49%
2021	FDI limit raised to 74%
2022	LIC IPO — largest IPO in Indian history at that time

IRDAI (Insurance Regulatory and Development Authority of India)

Aspect	Details
Established	2000 (under IRDA Act, 1999)
HQ	Hyderabad
Chairman	Appointed by Government of India
Role	Regulates and promotes insurance industry; protects policyholders; issues licenses
Initial FDI cap	26% (1999), raised to 49% (2015), then 74% (2021)

Life Insurance Corporation (LIC)

Aspect	Details
Established	1 September 1956
HQ	Mumbai
Formed by	Nationalisation and merger of 245 private companies
Motto	”Yogakshemam Vahamyaham” (from Bhagavad Gita — “Your welfare is our responsibility”)
Market share	Holds about 60%+ of life insurance market in India
Listed	May 2022 (BSE and NSE)

Types of Insurance

Type	Coverage
Life insurance	Death, maturity benefits; term plans, endowment, ULIP
General insurance	Motor, health, fire, marine, travel, crop
Health insurance	Hospitalisation, critical illness, personal accident
Reinsurance	Insurance for insurance companies; GIC Re is India’s sole reinsurer

Pension Sector

National Pension System (NPS)

Aspect	Details
Launched	1 January 2004 (initially for government employees)
Extended to all citizens	2009
Regulator	PFRDA (Pension Fund Regulatory and Development Authority)
PFRDA HQ	New Delhi
Features	Defined contribution; subscriber and employer both contribute; market-linked returns
Withdrawal	Partial withdrawal allowed after 3 years for specific purposes; 60% lump sum tax-free at retirement, 40% must buy annuity

Atal Pension Yojana (APY)

Aspect	Details
Launched	9 May 2015 (replaced Swavalamban Scheme)
Target group	Unorganised sector workers aged 18–40
Guaranteed pension	Fixed monthly pension of Rs 1,000, 2,000, 3,000, 4,000, or 5,000 after age 60
Contribution	Depends on age of joining and pension amount chosen
Government co-contribution	50% of subscriber’s contribution for 5 years (for those who joined before Dec 2015 and were not taxpayers)
Regulated by	PFRDA
Exit	Normal exit at 60; premature exit only under specific conditions

Pradhan Mantri Jan Suraksha Schemes (launched 2015)

PM Jeevan Jyoti Bima Yojana (PMJJBY)

Aspect	Details
Launched	9 May 2015
Type	Life insurance (term plan)
Premium	Rs 436/year (auto-debited from bank account)
Coverage	Rs 2 lakh on death (any cause)
Age group	18–50 years (coverage up to 55)
Renewable	Annually

PM Suraksha Bima Yojana (PMSBY)

Aspect	Details
Launched	9 May 2015
Type	Accident insurance
Premium	Rs 20/year (cheapest insurance in India)
Coverage	Rs 2 lakh for accidental death or total permanent disability; Rs 1 lakh for partial permanent disability
Age group	18–70 years
Renewable	Annually

Comparison: PMJJBY vs PMSBY

Feature	PMJJBY	PMSBY
Type	Life insurance	Accident insurance
Premium	Rs 436/year	Rs 20/year
Death cover	Rs 2 lakh (any cause)	Rs 2 lakh (accidental only)
Age	18–50	18–70
Natural death covered?	Yes	No

Ayushman Bharat

PM Jan Arogya Yojana (AB-PMJAY)

Aspect	Details
Launched	23 September 2018 by PM Modi (at Ranchi, Jharkhand)
Also called	Modicare or National Health Protection Scheme
Coverage	Rs 5 lakh per family per year for secondary and tertiary hospitalisation
Target	Bottom 40% of population (~10.74 crore families based on SECC 2011 data)
Cost to beneficiary	Zero — cashless and paperless at point of care
Funded by	60:40 Centre-State ratio (90:10 for NE states and J-K, Ladakh)
Implementing agency	National Health Authority (NHA)
No family size cap	Covers all members of eligible family

Ayushman Bharat Health and Wellness Centres (AB-HWC)

Aspect	Details
Goal	Transform 1.5 lakh Sub Health Centres and PHCs into HWCs
Services	Comprehensive primary healthcare including NCDs, maternal/child health, mental health, free essential drugs

Ayushman Bharat Digital Mission (ABDM)

Aspect	Details
Launched	27 September 2021
Key component	ABHA (Ayushman Bharat Health Account) — unique 14-digit health ID for every citizen
Purpose	Create digital health ecosystem — health records, doctor registry, facility registry

Employee Pension and Insurance

Scheme	Details
EPF (Employees’ Provident Fund)	12% of basic salary by employee + 12% by employer; managed by EPFO
EPS (Employees’ Pension Scheme)	8.33% of employer’s share goes to EPS; pension after 10 years of service and age 58
EDLI (Employees’ Deposit Linked Insurance)	Life insurance up to Rs 7 lakh for EPF members
EPFO HQ	New Delhi; headed by Central Provident Fund Commissioner

PSC-Focused Quick Recall

Question Pattern	Answer
LIC established year	1956
IRDAI headquarters	Hyderabad
PMJJBY premium	Rs 436/year
PMSBY premium	Rs 20/year
Ayushman Bharat coverage	Rs 5 lakh per family per year
Atal Pension max pension	Rs 5,000/month
NPS regulator	PFRDA
FDI limit in insurance (current)	74%
First life insurance company in India	Oriental Life Insurance (1818)
LIC motto source	Bhagavad Gita
ABHA is	14-digit health ID under Ayushman Bharat Digital Mission
AB-PMJAY launched at	Ranchi, Jharkhand (23 Sep 2018)
EPFO manages	EPF, EPS, EDLI