Jiban Bima stops selling pension policy after govt rolls out scheme

State-run Jiban Bima Corporation (JBC) has stopped selling its popular yet unprofitable private pension insurance policy since December 1, months after the government rolled out the Universal Pension Scheme.

In August 2023, the government launched the universal pension scheme, the first of its kind in Bangladesh, with a view to bringing in 10 crore people under the social safety net system.

According to an order of the insurance company on November 28, the private pension insurance policy is unprofitable and the actuarial consultant has recommended stopping marketing it. So, the sales have been stopped.

The order has been approved by JBC's board.

"Even though agents and policyholders were benefiting, the government was counting losses. Also, the government wants to give more priority to the Universal Pension Scheme. All of these factors have played a part in its discontinuation," said an official of JBC on the condition of anonymity.

Abul Khair Mohammad Hafizullah Khan, managing director of JBC, said existing policyholders have nothing to fear for the halting of the sales of the private pension insurance policy.

"This will not affect them."

According to the private pension insurance policy, if a policyholder passes away anytime within 10 years after making the first deposit, the nominee will receive the pension for the remaining years before it turns 10.

In the case of a natural death before the policy matures, the nominee will receive a one-time lump sum payment.

The policy also has an accident death rule where the nominee gets 30 times the annual premium after the holder dies. It allows 50 to 100 percent withdrawal at any time and taking loans against the policy.

Like other life insurance policies, the pension insurance money is income tax-free and a rebate was also available on the premium amount.

The Universal Pension Scheme aims to provide protection to 85 percent of the population under the low-income bracket and those employed in the informal sector.

There are four products– Pragati, Surokkha, Samata and Probashi – under the initiative.

Pragati covers private job-holders and Surokkha is dedicated to rickshaw pullers, workers, potters, smiths, fishermen, weavers and self-employed persons.

Samata is for the people with low income and Probashi will cover expatriate Bangladeshis.

Some 17,995 people have subscribed to the scheme in the first five months after the launch, said an official of the National Pension Scheme Authority.