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Aam Aadmi Bima Yojana

Launched on 2nd October 2007, Aam Aadmi Bima Yojana is a social security scheme that offers insurance coverage to low-income families of India that is usually not on the payroll. The scheme provides the beneficiaries for death due to natural causes, death due to an accident, partial disability or permanent total disability, as well as scholarship.

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Aam Aadmi Bima Yojana

Aam Aadmi Bima Yojana (AABY) meaning ‘common man’s insurance scheme’ is a social security scheme launched on 2nd October 2007 to provide financial help to the low-income families of India. The scheme is beneficial for people who are not generally on payroll. For instance, fishermen, cobblers, auto drivers, etc. Because of low income, these people are unable to save funds to face contingencies in life like disability or death. So, the scheme is designed for people who keep moving the economical wheel of the country and provides them the much required financial aid to face unfortunate situations.

The AAY scheme offers the following coverage benefits to the insured:

  • Cover for Death from Natural Causes: People aged between 18 years and 59 years can purchase Aam Aadmi Bima Yojana. In case the member covered under the plan dies a natural death, then the LIC will settle a death claim of Rs. 30,000.
  • Coverage for Disability: If a family member suffers from any kind of disability, the entire family suffers along. And if the sufferer is the sole breadwinner of the family, then the situation may even be worse. The Aam Aadmi Bima Yojana provides for a disability claim of Rs. 37,500 for permanent partial disability and Rs. 75,000 in case of permanent total disability occurred due to an accident.
  • Cover for Accidental Death: The Aam Aadmi Bima Yojana provides cover in case of accidental death. Under this cover, the nominee of the policy gets Rs. 75,000 in case of accidental death of the policyholder.
  • Additional Benefit: Apart from providing cover for disability and accidental death, Aam Aadmi Bima Yojana also provides education cover to at least two children in the family in case of a mishap. The policy provides a free scholarship of Rs. 100 every month on a half-yearly basis to the eligible children if they are studying between 9th and 12th standard.

Occupations Covered Under Aam Aadmi Bima Yojana

Aam Aadmi Bima Yojana covers people who are into low income occupations. Refer to the table below to know these occupations:

Anganwadi teachers

Firecrackers’ workers

Manufacture of paper products

Rural poor

Transport drivers association



Manufacture of wood products

Safai karamcharisScheme for the urban poor

Transport karamcharis

Auto drivers or rickshaw pullers

Food stuffs like sugar or khandsari

Mineral products like earthen toys manufacture

Safai karamcharis

Unorganized workers who are covered under 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



Lady tailors

Women of hilly areas


Handicraft artisans

Physically handicapped people who are self-employed

Sheep breeders

Papad workers who are associated with SEWA

Chemical products like candle manufacture

Handloom and Khadi weavers/handloom Weavers

Plantation workers

Salt growers

Overseas Indian Workers



Powerloom workers

Tendu leaf collectors

Unorganized workers covered under RSBY

Coconut processors

Leather and tannery workers

Primary milk producers


Printing rubber and coal products

Construction workers

Manufacturer of leather products

Toddy tappers

Exclusions Under Aam Aadmi Bima Yojana

Aam Aadmi Bima Yojana does not cover the insured against the following:

  • Hospitalisation expenses
  • Suicide
  • Death or disability due to mental disorders
  • Death or disability due to war or war-like situation in the country
  • Participation in adventurous sports
  • Participation in illegal activities
  • Loss of life of disability due to substance abuse

Benefits of Aam Aadmi Bima Yojana

Listed below are the benefits of Aam Aadmi Bima Yojana:

  • Affordable Policy: Aam Aadmi Bima Yojana can be purchased at very low health insurance premiums. This means that the policyholder does not have to worry about managing funds to pay for this plan. Also, half of the premium is borne by the government.
  • Prompt Assistance: the insured individuals can get their queries solved, if any, by getting contacting the nearest Life Insurance Corporation (LIC) branch. The policy buyer can also contact the concerned person via email or call.
  • Technologically Advanced Policy: The policy is technologically advanced and hence provides better services to the general public. This is because all the data of insured members are digitized and monitored with a web-based system that allows fast information exchanged whenever required. It helps at the time of claim settlement.

Eligibility Criteria for Aam Aadmi Bima Yojana

Aam Aadmi Bima Yojana is not for every citizen of India. Only people meeting the following criteria can apply:

  • People aged between 18 years and 59 years
  • People belonging to Below Poverty Line (BPL), families slightly above BPL who are a part of the vocational group as specified in the policy, and those belonging to rural landless household
  • One member of the family who is the breadwinner is eligible for coverage.

How to Enrol in Aam Aadmi Bima Yojana?

To enrol in Aam Aadmi Bima Yojana, the applicant is required to visit the Nodal agency that will carry the enrollment process. A nodal agency can be any institutional agency that is appointed by the state or central governments, Union Territory of India, or even an NGO. Also, mentioning the nominee is required to enrol.

Documents Required to Apply For Aam Aadmi Bima Yojana

The following documents are required to enrol under AABY:

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

How to Download the Application Form of Aam Aadmi Bima Yojana?

The Aam Aadmi Bima Yojana Form PDF or instructions to apply are available at the website of every state government. One can visit the website and be informed about the application process and download the form from the website itself.

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FAQ About Aam Aadmi Bima Yojana

  • Why was Aam Aadmi Bima Yojana (AABY) launched?

    Aam Aadmi Bima Yojana (AABY) was launched in October 2007 by the Government of India with an aim to provide social security to occupational groups within this sector. 

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

    To enrol for the Aam Aadmi Bima Yojana (AABY), you are required to visit the Nodal agency which is appointed to carry the enrollment process. The nodal agency is an institutional arrangement that is appointed by the central or state governments or UT of India. It includes NGO as well. 

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

    Aam Aadmi Bima Yojana (AABY) covers the loss of eyes and limbs under partial disability. A person with a partial disability might also be able to carry out daily chores or work to earn a living. 

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

    The Social Security Fund in Aam Aadmi Yojana plays a very important role. This is because half of the premium amount for this scheme is subsidized to the members of the scheme from the Social Security Fund. Therefore, the premium is very affordable. 

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

    The members’ NEFT details are required at the time of enrollment as they will be used at the time of a claim. This makes the claim process easier for the insured as well as the insurance company.