Aam Aadmi Bima Yojana Health Scheme (AABY)

Posted on: Aug 7, 2024 | 3 mins | Written by: HDFC ERGO Team

Aam Aadmi Bima Yojana Health Scheme (AABY)

You never know when life can take a turn for the worse. The demise of the family's primary breadwinner can leave the rest of the household members not only emotionally devastated but also under a severe financial crunch. That's why you must plan ways to pay off the debt or ensure the continuity of children's education. And one of the best ways to do that is through a life insurance policy. It might be a good instrument for the middle class and those belonging to the upper strata of society, but what about those who struggle to fulfil even their basic needs on a daily basis? Well, let's learn more about the government-sponsored social security scheme called Aam Aadmi Bima Yojana (AABY) and how it can help.

What is Aam Aadmi Bima Yojana?

Aam Aadmi Bima Yojana is a social security scheme launched by the Government of India to provide financial aid to people who belong to (BPL (i.e., Below Poverty Line) or low-income families. Administered by the Life Insurance Corporation of India (LIC), this scheme provides coverage to the policyholder's family in case of an unforeseen event like the policyholder's death or disability. The compensation amount will depend on the type of death and disability. The government has identified forty-eight occupations in the unorganised sector for this scheme.

The Objective of the AABY Scheme

The primary objective of Aam Aadmi Bima Yojana is to provide financial assistance to the economically weaker sections of society when the sole earning member of the family dies (natural or accidental) or suffers a disability in an accident. Beneficiaries of the scheme are those working in unorganised sectors like construction, fisheries, dairy, handloom, agriculture, etc.

Features of Aam Aadmi Bima Yojana

Some key features of Aam Aadmi Bima Yojana include:

• The scheme provides social security to underprivileged sections of society to enable them to access healthcare.

• The premium is Rs 200/person per annum, which is shared between the central and state governments.

• Only one member per family can avail of this scheme. If one member of the family has already enrolled and is availing of the benefits, no other member is eligible.

• The coverage amount remains fixed throughout the policy tenure.

• During a claim, the beneficiary will receive a lump sum compensation.

Inclusions & Exclusions under the AABY Scheme

Inclusions

• Natural death:

If the insured dies a natural death, the nominee has to provide a death certificate to receive the compensation of Rs 30,000.

• Accidental death:

The nominee has to provide a medical certificate stating the cause of the death due to the accident for availing Rs 75,000 as compensation.

• Accidental disability:

A doctor’s certificate certifying the nature of disability needs to be submitted. In case of total permanent disability, the insured/family member will get a compensation of Rs 75,000. In case of partial disability, the compensation is Rs 37,500.

• Scholarship:

A scholarship of Rs 100 per month is given to children (max 2 children) for their education in case of the insured’s death. The children must be studying in classes between 9th and 12th.

Exclusions

• The scheme does not cover government employees, individuals employed in private sectors with Provident Fund, taxpayers, individuals who are already covered under other government insurance schemes, and those who are not primary breadwinners of a family.

• Hospital expenses

• Death or disability due to mental illness and substance abuse

• Death or disability due to criminal activities

• Death or disability due to war or war-like situation

• Injuries due to participation in adventure sports

• Self-inflicted injuries or suicide

Benefits of Aam Aadmi Bima Yojana

• The nominee or family members will get a compensation of Rs 30,000 if the insured dies due to natural causes during the policy tenure.

• The nominee or family members will receive Rs 75,000 if the insured meets with an accidental death.

• In case the insured suffers a total permanent disability in an accident, such as loss of both eyes or both limbs, the policyholder or his/her nominee will receive Rs 75,000 under the scheme.

• In case of partial disability, such as loss of one eye or one limb, the policyholder or his/her nominee will get a compensation of Rs 37,500.

• The scheme also offers a free scholarship of Rs 100 per month to children (maximum two children per beneficiary) to continue their education uninterrupted.

• Women who are the sole breadwinners of their household can enrol under the scheme.

Occupations Covered Under AABY

The government has identified 48 occupational groups eligible for Aam Aadmi Bima Yojana, such as Anganwadi workers, landless agricultural workers, fishermen, beedi workers, brick kiln workers, carpenters, handicraft artisans, cobblers, women who work as tailors, construction workers, rural artisans, weavers, physically handicapped people who are self-employed, safai karamcharis, transport drivers’ association, firecrackers’ workers, etc.

Eligibility Criteria for ABBY Scheme

An applicant can be enrolled under the scheme if he/she fulfils the below criteria:

1. The applicant must be between 18 and 59 years of age.

2. The applicant must belong to a Below Poverty Line (BPL) family, and annual income should not exceed Rs 1,00,000.

3. The applicant must be the head of the family or the sole earning member.

4. The applicant must belong to a rural landless household.

5. Only one member per family can be enrolled under the scheme.

6. The applicant cannot be a beneficiary of any other social security scheme, such as the Employee's State Insurance Scheme or National Pension Scheme.

How To Enrol in Aam Aadmi Bima Yojana?

Here are the steps to apply for Aam Aadmi Bima Yojana —

Step 1:

Collect the application form from the nearest Aam Aadmi Bima Yojana centre or nodal agency (institution or NGO) appointed by the government for the enrolment process.

Step 2:

Fill out the form with correct information, such as your personal information, occupation, income, etc.

Step 3:

Attach the required documents with the application form and submit it at the AABY centre or nodal agency.

Step 4:

Once the concerned authority verifies and approves your application, the policy certificate will be issued and sent to your registered address.

Step 5:

The beneficiary can pay the premium annually or in instalments based on the policy terms and conditions.

Documents Required to Apply for ABBY

The list of documents required to apply for ABBY are:

• Address proof — Aadhar Card/electricity bill/driving license

• Identity proof – Aadhar Card

• Age proof – Aadhar Card/birth certificate

• Income certificate

• Proof of occupation

• Nominee application form

• Bank account details, such as the account number and IFSC code

How To Download the Aam Aadmi Bima Yojana Application Form?

Aam Aadmi Bima Yojana is an initiative by the Government of India. You can download the application form from the website of the respective state government. All other details related to the scheme, such as how to apply and the documents required, will also be available there.

Premium for ABBY

As this scheme is meant for low-income families, the premium is fixed at Rs 200 per person per year for a sum insured of Rs 30,000. While the central government pays 50% of the premium for all 48 occupational groups, the remaining 50% is paid by the nodal agency or State government/UT for rural landless households and vocational groups.

Claim Process under ABBY scheme

The claim process under ABBY is simpler than that of a health insurance plan.

1. Death of the insured:

The insured’s nominee has to fill out the death claim form and submit it along with the death certificate to the designated nodal agency. In case of accidental death, the nominee has to furnish a medical certificate stating the cause of death due to the accident, copies of the post-mortem report, FIR, police investigation report, and final police report.

2. Disability:

The nominee has to submit a medical certificate certifying the nature and severity of the disability, as well as proof of accident like FIR. The medical certificate must be issued by a registered government orthopaedic or surgeon.

3. Scholarship:

To claim a free scholarship, the nominee has to fill out the ABBY scholarship application form and submit it along with relevant documents to the nodal agency, which will then select the eligible students. This procedure needs to be done every six months.

After submission of documents, the nodal agency will verify the authenticity of the claim; once the claim is verified and approved, the claim amount will be transferred to the nominee’s bank account.

AABY Helpline Number and Address

The helpline numbers and addresses of AABY centres across India can be found here. As AABY is a product of LIC, you can find the contact details of the nearest LIC branch from the list and get your queries resolved.

FAQs

1. How many members of a family are eligible for Aam Aadmi Bima Yojana?

Only one member per family can apply for the scheme. The beneficiary must be the primary breadwinner of the family.

2. How can I enrol in AABY?

The AABY enrolment process is simple. You have to fill out the Aam Aadmi Bima Yojana application form and submit it along with the required documents to the designated nodal agency (institution or NGO) appointed by the government for the enrollment process. You will receive the policy certificate after the application is verified and approved.

3. What is the claim procedure?

To claim the scheme's benefits, you must furnish relevant documents like the policyholder's death certificate (for both natural and accidental deaths), medical certificate, copies of FIR, post-mortem report, and final police report (accidental death). For disability claim, a registered government orthopaedic surgeon must certify the nature and severity of the disability. After the claim and documents are verified and approved, the claim amount will be transferred to your bank account.

Conclusion

While an individual health insurance plan provides financial protection against hospitalisation expenses, the Aam Aadmi Bima Yojana provides compensation to the family of the policyholder in case of death or disability of the insured. The scheme is open only to those individuals employed in unorganised sectors.

Disclaimer: The above information is for illustrative purposes only. For more details, please refer to the policy wordings and prospectus before concluding the sales.

Pradhan Mantri Jeevan Jyoti Bima Yojana: Features and Benefits

Pravasi Bharatiya Bima Yojana: Eligibility, Coverage & Benefits

Bhamashah Swasthya Bima Yojana Scheme: Application, Eligibility and Benefits

Why Health Insurance with OPD Cover Gaining Popularity?

Know how your 10 lakh sum insured can go up to 20 lakhs with our Optima Secure plan