Aam Aadmi Bima Yojana (AABY)

Table Of Content

Aam Aadmi Bima Yojana (AABY):Hamara Desh Hamari






The workers in the unorganized sector constitute about 93% of the total work force in the country. One of the major insecurities for workers in the unorganized sector is the frequent incidences of illness and need for medical care and hospitalization of such workers and their family members. Despite the expansion in the health facilities, illness remains one of the most prevalent causes of human deprivation in India. It has been clearly recognized that health insurance is one way of providing protection to poor households against the risk of health spending leading to poverty. However, most efforts to provide health insurance in the past have faced difficulties in both design and implementation. The poor are unable or unwilling to take up health insurance because of its cost, or lack of perceived benefits. Organizing and administering health insurance, especially in rural areas, is also difficult.

In order to combat the illness among the workers and landless farmers followed by their inability to bear expensive medical facilities, Ministry of Finance, Government of India has approved the merger of Social Security Scheme viz., Aam Admi Bima Yojana (AABY) and Janashree Bima Yojana (JBY).

The merged scheme is renamed Aam Admi Bima Yojana and has come into effect from 01.01.2013.



This particular scheme was launched as late as October, 2007. This means that the requirement for such a scheme existed in the late 2000s. It is essential to understand what the basic requirement of this scheme is in the Indian economy. Aam Aadmi Bima Yojana is intended for social security and financial aid to the people of rural India. This not only includes people below the poverty line but also people living in areas which do not have access to urban facilities such as big hospitals, or even a pharmacy for that matter. With changing topography of the Indian economy and the middle class and above being able to pull themselves along with changing times, people of rural India, who form the majority are falling back due to the lack of aid. This particular scheme intends to aid people at such a time.

Eligibility Criteria for Aam Aadmi Bima Yojana:

The following are the basic requirements for applying for the Aam Aadmi Bima Yojana:

  • The applicants should be aged between 18 and 59.
  • The applicant ideally should be the head of the family or one of the earning members of a below poverty line family (BPL) or marginally above the poverty line under identified vocational group/rural landless household.
  • Some documentation is also required.

Nodal Agency(ies):

“Nodal Agency” shall mean 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.

Benefits of Aam Aadmi Bima Yojana:

The benefits under Aam Aadmi Bima Yojana scheme are as follows:

  1. The Death Benefit Of this scheme is given to the surviving nominees or family of the policyholder on the event of a natural death is Rs. 30,000/-.
  2. In case the death has occurred due to accident/on permanent total disability due to accident (loss of 2 eyes or 2 limbs) the amount given to the nominees or family members of the owner of the policy is Rs. 75,000.
  3. In the case of partial permanent disability due to accident (loss of one eye or one limb) the amount given to the nominees or family members of the owner of the policy is Rs. 37500/-
  4. Scholarship benefits: Scholarship is a Free Add-on benefit provided to a maximum of two children of the beneficiary who are studying between 9th to 12th Standard @ Rs.100/= per month for each child, which is payable at a half yearly basis – July 1 and on January 1, every year.

Premium :

The premium to be charged initially under the scheme will be Rs.200/- per annum per member for a cover of Rs.30,000/-, out of which 50% will be subsidized from the Social Security Fund . In case of Rural Landless Household (RLH) remaining 50 % premium shall be borne by the State Government/ Union Territory and in case of other occupational group the remaining 50% premium shall be borne by the Nodal Agency and/or Member and/or State Government/ Union Territory.


SMS LICHELP <pol.no.> to 9222492224 or SMS LICHELP <pol.no.> to 56767877.

Documentation Required for Aam Aadmi Bima Yojana Application:

The following are the documentation requirements to apply for this scheme:

  • Ration Card
  • Extract from Birth Register
  • Extract from School Certificate
  • Voter’s List
  • Identity card issued by reputed employer/Government Department.
  • Unique Identification Card (Aadhar Card)


Procedure to Claim Aam Aadmi Bima Yojana:

The death or disability claims which are under this scheme are supposed to be settled by the P&GS Unit of LIC. They make a direct payment to the beneficiaries through NEFT. In the case that there isn’t a NEFT facility available, the money for the claim is directly transferred to the bank account of beneficiaries. This would also require prior approval from competent authority, the A/C payee cheque or claim can be paid by any other mode as decided by LIC.

Death Claim Procedure:

  1. In the event of death of the member during the period of coverage and while the policy is in force, an application has to be made by his/her nominee.
  2. This application should be made along with a Death Certificate for payment of claim amount to the designated official of the Nodal Agency.
  3. The designated official of the particular Nodal Agency has to then verify the claim papers.
  4. The officer will then submit the documentation and application along with the death certificate and a certificate that the deceased member was head /earning member of the family belonging to the BPL/Marginally above BPL family under the eligible occupations under the scheme.
  5. Nodal Agency has to submit the following with the application:
    1. Claim Form duly completed in all respects
    2. Original death certificate along with a copy duly attested.

Accident Claim Procedure:

In case of accident benefit claim additional requirements have to be submitted along with the Death Registration Certificate. This includes:

  1. Copy of FIR
  2. Post Mortem Report
  3. Police Inquest Report
  4. Police Conclusion Report / Final Report of Police.

Scholarship Claim Procedure:

The member of Aam Aadmi Bima Yojana whose child is eligible for this scholarship has to fill up an application form every half a year and submit it to the Nodal Agency.

  1. The Nodal Agency will have to identify and then verify the students.
  2. The Nodal Agency official then would submit the list of beneficiary students to the concerned P&GS unit with full details which include:
    1. Name of the student
    2. School’s name
    3. Class
    4. Member’s name
    5. Master policy no.
    6. Membership no.
    7. NEFT details for direct payment.
  3. Each half year, on July 1 and January 1, LIC will credit the scholarship payment to the Account of the beneficiary student, by NEFT or bank account, if the NEFT facility is unavailable.

To apply for AABY CLICK HERE


The last data that was released for Aam Aadmi Yojana on March 2015, has some things that could be highlighted:

  1. The number of the new lives covered for the fiscal year was 3,275,291.
  2. The claims that were paid for the FY 2014-2015 was for over 42,00 policies.
  3. The amount paid out for these claim for Fy 2014-15 was Rs. 14,43,227
  4. The scholarship claims were at 619985 children amounting to Rs. 41,81, 64,800.
  5. GST rate of 18% applicable for all financial services effective July 1, 2017

These numbers show that this scheme is working out more for young scholars, more than a life insurance cover for rural.










Leave a Reply