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Aam Admi Bima Yojana

By Mayashree Acharya


Updated on: Jul 29th, 2022


9 min read

The government launched the Aam Admi Bima Yojana (AABY) on 2 October 2007. It is one of the social security schemes introduced by the government for low-income families in India. It is an insurance scheme which provides monetary benefits to scheme beneficiaries upon their death or disability.

The AABY provides insurance to those not on any organisation’s payroll, such as auto drivers, fishermen, cobblers, etc. Due to low income, they may not have savings for emergencies or grave contingencies like death or disability. In such times, this scheme provides them with monetary aid to overcome such unfortunate situations.

Eligibility Criteria for AABY

The following persons are eligible to apply for AABY:

  • Applicants aged between 18 to 59 years
  • Applicants belonging to a Below Poverty Line (BPL) family
  • Applicants belonging to a rural landless household
  • Applicants belonging to slightly Above Poverty Line (APL) families who are part of a vocational group
  • Only one member who is the breadwinner of the family will be eligible to get insurance coverage

Coverage Under AABY

The following insurance coverage is provided under the scheme for the beneficiaries:

Natural death

A sum of Rs.30,000 is provided to the nominee of the beneficiary. It is provided when the beneficiary dies during the period of insurance cover.

Accidental death

In case of the death of a beneficiary due to an accident,  a sum of Rs.75,000 is provided to the beneficiary’s nominee. The benefit is provided when the beneficiary dies during the period of insurance cover.

Accidental disability benefits 

In case of a permanent total disability due to an accident, a sum of Rs.75,000 is provided to the beneficiary. A permanent total disability means the following:

  • Loss of two eyes or two limbs
  • Loss of one eye and one limb

In case of a partial disability due to an accident, a sum of Rs.37,500 is provided to the beneficiary. A partial disability means a loss of one eye or one limb.

Scholarship benefits

The beneficiary can include a scholarship as a free add-on benefit under the scheme. The scholarship will be granted to a maximum of two children of a beneficiary studying between 9th to 12th Standard at Rs.100 per child per month. The scholarship is paid half yearly, i.e. on 1 July and 1 January each year.

Exclusions Under AABY

Certain situations are not covered in the insurance coverage provided by AABY. The following is the list of exclusions of AABY:

  • Cost of hospitalisation
  • Suicide
  • Disability or death due to mental disorders
  • Disability or death due to a war-like situation in the country
  • Taking part in illegal activities
  • Taking part in dangerous and adventurous sports
  • Disability or loss of life due to substance abuse

Premium Under AABY

A beneficiary should pay a premium of Rs.320 to get the insurance benefit under the AABY. However, the premium payment is divided between the government and the policyholder. Depending upon the region, the government could be the nodal agency, state government or central government. Thus, an eligible person needs to pay only 50% of the premium per year to avail of the benefits of this scheme. 

Occupations Covered Under AABY

There are 48 occupations/vocations covered under the AABY. Individuals belonging to or associated with any of these occupations or vocations are covered under AABY:

  • Beedi workers
  • Fishermen
  • Handloom and khadi weavers
  • Physically handicapped self-employed persons
  • Salt growers
  • Sericulture
  • Foodstuffs like sugar/Khandsari
  • Manufacture of leather products
  • Mineral products like earthen toys manufacture
  • Rural poor
  • Aanganwadi teachers
  • Sheep breeders
  • Brick kiln workers
  • Hamals
  • Lady tailors
  • Primary milk producers
  • Tendu leaf collectors
  • Toddy tappers
  • Textile
  • Printing
  • Agriculturists
  • Construction workers
  • Kotwal
  • Overseas Indian workers
  • Carpenters
  • Handicraft artisans
  • Leather and tannery workers
  • Rickshaw pullers/auto drivers
  • Urban poor
  • Powerloom workers
  • Manufacture of wood products
  • Rubber and coal products
  • Transport drivers association
  • Firecrackers workers
  • Plantation workers
  • Rural landless households
  • Cobblers
  • Handloom weavers
  • Papad workers attached to Self Employed Women’s Association (SEWA)
  • Safai karamacharis
  • Forest workers
  • Hilly area women
  • Manufacture of paper products
  • Chemical products like candle manufacture
  • Transport karmacharis
  • Coconut processors
  • Women associated with Self-Help Groups (SHGs)
  • Unorganised workers covered under the Rashtriya Swasthya Bima Yojana (RSBY)

AABY Application Process

The process of applying to the Aam Aadmi Bima Yojana is different from purchasing a regular insurance plan. Since this scheme is a national scheme, the applicants should visit the nodal agencies appointed to carry out the AABY enrollment process. A nodal agency can be NGOs, Panchayats, Self Help Groups (SHGs) or any other institutionalised arrangements. 

It is necessary to state the nominee while enrolling in this scheme as it is essential for filing claims. The family members may not receive the scheme’s benefits when there is no clear mention of the policy nominee.

Documents Required to Apply for AABY

The applicants can give the list of required documents for enrollment to AABY to the nodal agency. The following are the documents required:

  • Application form
  • Identity proof
  • Nominee application form
  • Address Proof
  • Income certificate

Claim Procedure for Death/Disability Claims Under AABY

  • In the case of the beneficiary’s death when the policy is in force and during the coverage period, his/her nominee will have to make a claim application with the death certificate to the designated nodal agency official for obtaining the claim payment.
  • In case of a disability claim (permanent or partial disability), the beneficiary can make a claim application to the designated nodal agency official to obtain the claim payment.
  • Every beneficiary should appoint a nominee to receive the claim amount after his/her death. The nodal agency will keep the nomination form in its custody and will forward it to LIC along with the claim papers upon the death of a beneficiary.
  • The designated nodal agency official will verify the claim papers and submit it with the death certificate and the certificate that the deceased member was an earning or head member of the family belonging to the BPL or marginally above the BPL family under the eligible vocation or occupations.
  • The nodal agency can contact the nearest LIC branch office or Pension and Group Scheme office to settle the claims.
  • The death or disability claims will be settled by the ‘P&GS Unit of LIC’ by providing direct payment to the beneficiaries through NEFT, the bank account of beneficiaries with prior approval from a competent authority, A/C payee cheque or any other mode decided by LIC.

Documents Required for Death/Disability Claims

The nodal agency should submit the following documents for the death claim:

  • A claim form completed in all respects
  • An original death certificate and a copy of a duly attested death certificate

The nodal agency should submit the following documents for the accident death claim:

  • Copy of FIR
  • Police inquest report
  • Post mortem report
  • Police conclusion report or final report of police

The nodal agency should submit the following documents for disability claim:

  • Evidence of the accident (video recording, police FIR, or photographs of the accident)
  • Medical certificate from a qualified government orthopaedician or government civil surgeon certifying permanent or partial disability due to accident, stating loss of limbs or eyes of the beneficiary

Claim Procedure for Scholarship Benefits Under AABY

  • The beneficiary whose child is eligible for scholarship benefits under the scheme should file a half-yearly application form and submit it to the respective nodal agency. The nodal agency will identify the students.
  • The nodal agency will submit the list of beneficiary students to the concerned ‘P&GS Unit’ with full details such as student’s name and class, school’s name, member’s name, membership number, master policy number, and NEFT details for direct claim payment.
  • Every half year, i.e. 1 July and 1 January, LIC will credit the scholarship payment to the beneficiary student account by NEFT.
  • The LIC may also pay the scholarship benefit through any other mode of payment as decided by it or the government.

The Aam Admi Bima Yojana provides an assured sum of money to its beneficiaries upon their death or disability. Thus, it helps the family of the beneficiaries by providing financial support in their time of need. It also provides scholarships to the children of the beneficiary and helps them to continue their studies.

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About the Author

I am an advocate by profession and have a keen interest in writing. I write articles in various categories, from legal, business, personal finance, and investments to government schemes. I put words in a simplified manner and write easy-to-understand articles. Read more


Quick Summary

AABY scheme launched in 2007 provides insurance benefits for low-income families in India, covering natural, accidental death, disability, and scholarship. Premium divided between government and policyholder, 48 occupations covered. Application through nodal agencies, nominee essential for claim. Documents required for enrollment. Death/disability claims require death certificate and appropriate documentation. Scholarship benefits half-yearly. Scheme provides financial aid and scholarships.

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