Saturday, November 21, 2009

Aam Aadmi Bima Yojana

Aam Aadmi Bima Yojana (AABY), from 2nd October 2007, covering the death and permanent disability for the benefit of rural landless households as detailed below:

(i) The scheme provides for insurance of head of the family or an earning member of the family of rural landless household between the age of 18 to 59 years against natural death as well as accidental death and partial/permanent disability. The annual premium payable per member is Rs.200, of which 50% shall be paid by the Central Government and the remaining 50% by the State Government. The main features and benefits of the AABY Scheme in nutshell are as under:



Rural Landless Households

Age Group

18-59 years


Rs.200/- per member. 50% by Central Government and remaining 50% by State Government

Nodal Agency

State Government


Natural Death


Accidental Death


Total permanent disability

Rs.75,000/- (loss of two eyes or two limbs or loss of one eye and one limb in accident)

Partial permanent disability

Rs.37,500/- (loss of one eye or one limb in an accident)


Two children of the beneficiaries studying in 9th to 12th Standard will get Rs.300/- per quarter per child

(ii) Creation of a fund of Rs.1000 crore to be operated by LIC for meeting the liability of Central Government towards its share of premium payment. As per the National Sample Survey, the number of rural landless households in the country is 1.5 crore. It is expected that in the first year approx. 70 to 80 lakh of rural landless households would be covered under the scheme requiring an expenditure of Rs.70-80 cr by the Central Government towards its share of 50% premium. With a 8% per annum return expected on the Rs.1000 crore fund, the amount would be sufficient to meet the liability of premium payment.

(iii) A separate Rs.500 crore fund will be created for the purpose of providing scholarships to children of beneficiaries. This will make available Rs.40 crore for the full year at 8% per annum return. This amount would suffice for the coverage of 3,33,000 children of the beneficiaries.

This Scheme would extend the benefit of life insurance coverage as well as coverage of partial and permanent disability to the head of the family or an earning member of the family of rural landless households in the States and also educational assistance to their children studying from 9th to 12th standard as an extended benefit.

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