Saral Jeevan Bima will ease the daunting task of individuals who get confused when it comes to buying a term insurance policy. In an attempt to make insurance affordable and available for all sections of the society, the Insurance Regulatory and Development Authority of India (Irdai) in October had come up with guidelines for an individual term life insurance product named ‘Saral Jeevan Bima’. The product will be launched on 1 January 2021.
“There are many term products in the market with varying terms and conditions. Customers who cannot devote adequate time and energy to make informed choices find it difficult to select the right product. It is felt necessary to introduce a standard, individual life insurance product with simple features and standard terms and conditions,” IRDAI had said in its circular dated 14 October 2020.
The introduction of the Saral Jeevan Bima plan will be a revolutionary move in the life insurance sector.
Here are the features of Saral Jeevan Bima policy
1) Saral Jeevan Bima is a non-linked non-participating individual pure risk premium life insurance policy which will pay the sum assured in lump sum to the nominee in case of death of the life assured during the policy term.
2) Minimum age of entry will be 18 years and maximum age will be 65 years.
3) The standard term life insurance will mandatorily offer a sum assured between ₹5 lakh and ₹25 lakh.
4) It will provide three premium payment options – regular premium, limited premium payment term for 5 years and 10 years and single premium.
5) Individuals will be allowed to choose from regular premium payment throughout the policy term, single premium payment in lumpsum or limited premium payment (5, 10 years) options.
6) This is a pure term life insurance plan, there is no maturity benefit.
7) There will be a waiting period of 45 days from the commencement of the policy. During these 45 days, the policy will only cover death due to an accident.
8) It will also offer accident benefit and permanent disability.
9) The maximum age at maturity is 70 years, which means when the policyholder reaches the age, the plan will automatically terminate.
10) For regular and limited premium payment policies, the death benefit will be, highest of – 10 times of annualised premium or, 1-5% of all premiums paid as on the date of death , or an absolute amount assured to be paid on death. For single premium policies, the death benefit will be higher of – 125% of single premium , or absolute amount assured to be paid on death.
Shortcomings of Saral Jeevan Bima policy
One of the shortcomings of the product is the sum assured. The maximum sum assured of Rs 25 lakh is low, as per insurance experts.
Saral Jeevan Bima targets the masses across all income groups. But if you want to buy a term plan for a sum assured higher than ₹25 lakh, you will have to look at other options from the insurers.