Aam Aadmi Bima Yojana (AABY)

Know the coverage, benefits, eligibility, and application process for AABY.
Aam Aadmi Bima Yojana (AABY)
3 min
25-July-2023

Aam Aadmi Bima Yojana (AABY) is a social security program that is supported by the Indian government. Its primary aim is to provide life insurance to the unorganised sector of the population at an economical rate. Life Insurance Corporation of India (LIC) administers this scheme. The Aam Aadmi Bima Yojana has coverage for natural as well as accidental deaths, permanent total disability, and partial permanent disability.

What is the Aam Aadmi Bina Yojana (AABY)?

The scheme was initiated on October 2, 2007, aiming to help low-income families in India. The program is meant for people who are not on a regular payroll, like fishermen, auto drivers, and cobblers. Since their income is low, they may not have the means to save money for emergencies like death or disability. The Aam Aadmi Bima Yojana steps in to provide them with financial assistance to cope with such unfortunate situations.

The overall premium amounts to Rs. 200 per person per annum. The central government bears Rs. 100 of the total premium, the state government Rs. 30, and the beneficiary pays Rs. 70. The Aam Aadmi Bima Yojana’s premium is deducted from the beneficiary’s bank account either through the electronic clearance system (ECS) or any other mode of payment.

Also, check: Health insurance for family

Key features and benefits of Aam Aadmi Bima Yojana

The scheme is beneficial in multiple ways. Given below are the key features of the scheme:

  • Affordable: The scheme is very affordable, with the government subsidising the premium cost. The eligible individual can afford to pay the premium without thinking about any financial burden.
  • Financial assistance in times of need: In case of the insured’s demise or disability, the family can claim the coverage.
  • Benefits for females: It offers additional benefits to women, with coverage for female-headed households and maternity benefits among them.

Coverage under the Aam Aadmi Bima Yojana (AABY)

Under this scheme, individuals will get coverage under either of the following three conditions:

  • Natural death: The nominee needs to present the death certification of the deceased while making a claim.
  • Death due to an accident: Present a medical certificate stating the cause of death at the time of making a claim.
  • Partial disability or permanent total disability: While making a claim, it will be necessary to present a medical certificate given by a government medical practitioner, outlining the details of the disability.

The table given below shows the benefits covered under each condition:

Coverage

Benefit

Death from natural causes

Rs. 30,000

Death due to accident

Rs. 75,000

Partial disability

Rs. 37,500

Permanent total disability

Rs. 75,000

Scholarship

Rs. 100 per month per child


Key inclusions under Aam Aadmi Bima Yojana

Given below are the key inclusions under the Aam Aadmi Bima Yojana:

  • Insurance cover of Rs. 75,000 for accidental death and disability, and up to Rs. 37,500 for partial disability.
  • A nominal premium of Rs. 200 per annum shared equally between the beneficiary, state government, and central government.
  • Vocational training programs for skill development and scholarship assistance for children of eligible beneficiaries.
  • Covers rural landless households between 18 to 59 years and unorganised sector workers.
  • Aam Aadmi Bima Yojana Scheme is integrated with other welfare schemes for wider coverage.

Exclusions under Aam Aadmi Bima Yojana

Given below are the key exclusions under the policy:

  • Individuals working in the organised sector
  • Individuals who are taxpayers
  • Individuals under other government schemes
  • Individuals who are not the primary bread earners of the family
  • Death due to suicide
  • If the cause of death or disability is substance abuse
  • Hospitalisation cost

Eligibility criteria for AABY

If an individual fulfills the following eligibility criteria, he/she is eligible to enroll for the scheme:

  • The age of the applicant must be between 18 and 59 years.
  • The annual income of the household must not exceed Rs. 1 lakh.
  • The individual must be an employee under any of the 48 listed sectors.
  • The applicant must not be enrolled under any other social security scheme.

AABY registration: Check how to register for the scheme?

The process to apply for the scheme is an offline process. The applicant needs to follow the below steps:

  • Visit the nearest Aam Aadmi Bima Yojana centre or contact an insurance agent.
  • Fill in the application form and attach the necessary documents.
  • The insurance agent will verify the application and documents. After verifying everything, they will issue a policy certificate.
  • The policy certificate will be sent to the applicant’s address.
  • The applicant can pay the premium amount either annually or in instalments, as per the policy terms.

Documents required to apply to Aam Aadmi Bima Yojana

The applicant needs to provide the following documents along with the application form:

  • Aadhar card
  • Age proof
  • Address proof
  • Bank account details
  • Income certificate
  • Occupation proof

Occupations/vocations covered under Aam Aadmi Bima Yojana (AABY)

The program encompasses a variety of professions aimed at identifying those eligible for assistance. These occupations typically involve individuals with low income who stand to gain from the AABY. Given below is the list of occupations/ vocations covered:

Anganwadi teachers

Firecrackers’ workers

Manufacture of paper and wood products

Rural poor

Transport drivers association

Agriculturists

Fishermen

Manufacture of leather products

Safai karamchar

Transport karamcharis

Auto drivers or rickshaw pullers

Food stuffs like sugar or khandsari

Mineral products like earthen toys manufacture

Toddy tappers

Unorganised workers covered under the Rashtriya Swasthya Bima Yojana

Beedi workers

Forest workers

Overseas Indian workers

Scheme for the urban poor

Women associated with self-help groups

Brick kiln workers

Hamals

Papad workers who are associated with SEWA

Sericulture

Women of hilly areas

Carpenters and cobblers

Handicraft artisans

Physically handicapped people who are self-employed

Sheep breeders

Kotwal

Chemical products like candle manufacture

Handloom and khadi weavers/handloom weavers

Plantation workers

Salt growers

Overseas Indian Workers

Construction workers

Lady tailors

Powerloom workers

Tendu leaf collectors

Unorganised workers covered under RSBY

Coconut processors

Leather and tannery workers

Primary milk producers

Textile

PrintingRubber and coal products


How to claim benefits under Aam Aadmi Bima Yojana?

To claim insurance coverage, the nominee must submit a claim form to the LIC branch office within 30 days of the incident. The state government will then process the claim and make the payment to the nominee's bank account.

The Aam Aadmi Bima Yojana is a significant initiative by the Indian government to provide social security to the unorganised section of the population. This scheme offers financial assistance in case of an unanticipated event.

Note: We do not offer any benefits under the Aam Aadmi Bima Yojana. To know about the other health insurance policies available at the Bajaj Finance Insurance Mall.

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Frequently asked questions on Aam Aadmi Bima Yojana (AABY)

Why was Aam Aadmi Bima Yojana (AABY) launched?

AABY was launched to provide social security benefits to individuals belonging to economically weaker sections. It aims to support those who are the sole breadwinners of their families and may not have access to other forms of insurance.

Where can I apply for the Aam Aadmi Bima Yojana (AABY)?

Individuals can apply for AABY through the designated nodal agency in their respective states. Most often, the nodal agency is the post office, but it can also be a cooperative society, a bank, or any other entity recognised by the state government.

What is the nature of partial disability covered under Aam Aadmi Bima Yojana (AABY)?

The AABY scheme covers both partial and total disabilities. Partial disabilities refer to the loss of limbs or the use of limbs, whereas total disabilities refer to the loss of both limbs or both eyesight.

What is the role of the social security fund in relation to Aam Aadmi Bima Yojana (AABY)?

The social security fund supports individuals who are financially vulnerable and fall within the criteria of the AABY scheme. The fund ensures that beneficiaries receive adequate support in times of financial distress caused by death, disability, or disease.

Why are the members’ NEFT details required at the time of enrollment of Aam Aadmi Bima Yojana (AABY)?

Beneficiaries who are eligible for compensation under the scheme receive it directly in their bank accounts. Hence, it is mandatory to provide accurate NEFT details at the time of enrollment to ensure that the compensation reaches the beneficiary without any delay.

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