What is Aam Aadmi Bima Yojana (AABY)?

Aam Aadmi Bima Yojana (AABY) is a government-backed insurance scheme launched in 2007 for unorganized sector workers aged 18–59 years. It offered life and disability coverage, including ₹30,000 for natural death and ₹75,000 for accidental death or disability, at a subsidized premium of ₹200 per year. The scheme was merged into PMJJBY (Pradhan Mantri Jeevan Jyoti Bima Yojana) and PMSBY (Pradhan Mantri Suraksha Bima Yojana) on June 1, 2017, and is no longer open for new enrollments.

A significant portion of India’s workforce is employed in the unorganised sector, where access to structured financial protection remains limited. As highlighted in recent government releases on expanding social security coverage, bridging this gap has been a key priority. In response, several targeted insurance schemes have been introduced over the years to extend basic financial protection to these workers.

For many households, the loss or disability of a breadwinner can lead to long-term financial instability. To address this, the government introduced the Aam Aadmi Bima Yojana scheme, which was later integrated into PMJJBY and PMSBY to improve coverage and delivery.

In this blog, we cover the AABY scheme, its benefits, eligibility, alternatives, and how it fits into today’s government insurance framework.

Confused about whether government schemes like AABY, PMJJBY, or PMSBY are enough? Speak to Ditto’s certified advisors on call or WhatsApp for free, unbiased guidance.

What is Aam Aadmi Bima Yojana?

The Aam Aadmi Bima Yojana was launched on October 2nd, 2007, by the Ministry of Labour & Employment to provide basic life and disability insurance to workers in the unorganized sector.

The scheme focused on:

    • Low-cost insurance access
    • Government-subsidized premiums
    • Basic protection against death and disability

The AABY model relied on group-based enrollment through nodal agencies and was administered by LIC. However, due to limited coverage and scalability challenges, it was later merged into PMJJBY and PMSBY.

Key Benefits of Aam Aadmi Bima Yojana Scheme

    • ₹30,000 for natural death
    • ₹75,000 for accidental death or total disability
    • ₹37,500 for partial disability
    • ₹100/month scholarship (up to 2 children)

While affordable, these benefits were modest and often insufficient for long-term financial security.

Benefits under PMJJBY and PMSBY

FeaturePMJJBY (Life Cover)PMSBY (Accident Cover)
Type of CoverLife insuranceAccident insurance
Coverage Amount₹2 lakh (death due to any cause)₹2 lakh (accidental death or total disability)₹1 lakh (partial disability)
Premium₹436 per year (auto-debited)₹20 per year (auto-debited)
Policy Term1 year (renewable, June–May cycle)1 year (renewable, June–May cycle)
Nature of CoverageCovers natural + accidental deathCovers only accident-related death/disability
AccessThrough a savings bank/post office accountThrough a savings bank/post office account

Compared to AABY, PMSBY offers significantly higher and more clearly defined accident coverage. If you want a deeper breakdown, you can also check our guide on government-backed life insurance schemes and how they compare with term plans.

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What is Premium Payment Structure?

In this context, the premium payment structure refers to who bears the cost of the premium. One key difference between the Aam Aadmi Bima Yojana (AABY) and its successor schemes lies in how premiums are paid. Under AABY, the ₹200 annual premium was shared, with 50% funded by the Central Government (via the Social Security Fund) and the remaining 50% paid by the State government, nodal agency, or sometimes the beneficiary. In many cases, this meant little to no out-of-pocket cost for the insured.

In contrast, both PMJJBY and PMSBY follow a fully user-paid model, where the entire premium (₹436 and ₹20 per year, respectively) is directly auto-debited from the policyholder’s savings bank or post office account. This reflects a shift from a subsidized welfare approach to a low-cost, self-funded insurance model designed for scale and simplicity.

Eligibility Criteria for AABY

The AABY scheme targeted vulnerable groups:

    • Age between 18 and 59 years
    • Belonging to the unorganized sector occupations
    • Typically from low-income households

Eligibility under PMJJBY

    • Age: 18 to 50 years (entry), coverage up to 55
    • Must have a savings bank or post office account
    • Consent for auto-debit required

This shifts eligibility from occupation-based access to a more scalable, bank-linked model.

Eligibility under PMSBY

    • Age: 18 to 70 years
    • Must have a savings bank or post office account
    • Consent for auto-debit required

PMSBY expands access further, especially for older individuals.

How to Apply for Aam Aadmi Bima Yojana

AABY is no longer open for new enrollments. Earlier, individuals had to apply through designated nodal agencies such as government bodies or self-help groups, with LIC administering the scheme. That said, although the application process is closed for AABY, you can still apply for PMJJBY and PMSBY by following the steps below:

How to Apply for PMJJBY

    • Visit your bank branch or post office where you hold a savings account
    • Alternatively, enroll via net banking/mobile banking or the Jan Suraksha portal.
    • Fill out the consent-cum-declaration form
    • Enable auto-debit of ₹436 annually
    • Coverage begins after successful enrollment

How to Apply for PMSBY

    • Visit your bank branch or enroll via net/mobile banking
    • Download the form from the Jan Suraksha website and submit it to your bank
    • Provide consent for ₹20 annual auto-debit
    • Receive acknowledgment/certificate of insurance

This bank-linked and auto-debit-based model has made enrollment significantly easier compared to the original AABY structure.

Note: There is no active Aam Aadmi Bima Yojana official website for new enrollments. Instead, individuals can enroll in PMJJBY (life insurance) and PMSBY (accident insurance) through banks and the Jan Suraksha portal. If you want to explore more government health insurance schemes, you can refer to the linked guide.

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Aam Aadmi Bima Yojana
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Conclusion

The Aam Aadmi Bima Yojana played an important role in improving insurance access for India’s unorganized workforce. However, its low coverage limits meant it could not fully protect families from financial shocks.

The transition to PMJJBY and PMSBY improved both coverage and accessibility. Even so, these schemes are best seen as a starting point.

If you have dependents or financial responsibilities, relying solely on these schemes may not be enough given their low sum assured. A comprehensive term insurance plan, like the Axis Max Life Smart Term Plan Plus or HDFC Life Click 2 Protect Supreme Plus, remains essential for meaningful financial protection.

Disclaimer

Ditto has no affiliation with this scheme. Everything here is based on publicly available information and the evaluation standards we use when reviewing insurers. If you’re curious about how we assess claims experience, complaints, financial strength, or product fit, our methodology explains it in detail. This guide is purely informational and not financial or legal advice.

Frequently Asked Questions

Aam Aadmi Bima Yojana was launched in which year?

The Aam Aadmi Bima Yojana was launched on October 2nd, 2007.

Is AABY still available?

No, the AABY scheme was withdrawn and replaced by the PMJJBY and PMSBY schemes in 2017.

What is the premium under AABY?

The premium under AABY was ₹200 per year. This amount was shared between the Central Government (50% via the Social Security Fund) and the State government, nodal agency, or sometimes the beneficiary, often resulting in minimal or no out-of-pocket cost for the insured.

What replaced the Aam Aadmi Bima Yojana scheme?

Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) for life insurance and Pradhan Mantri Suraksha Bima Yojana (PMSBY) for accident insurance replaced the AABY scheme.

Are PMJJBY and PMSBY enough for financial protection?

They provide basic coverage, but may not be sufficient for complete financial security due to their low coverage amounts and lack of customization options.

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