Written by Santosh Agarwal
After coming up with a standard regular health insurance plan – Arogya Sanjeevani, customers will soon get to buy a regulator-mandated standard term life insurance policy from January 1st, 2021. In an attempt to make the term life insurance affordable and available to all, on the directions of the Insurance Regulatory and Development Authority of India (IRDAI), the life insurers have come up with a standard term life insurance policy named – Saral Jeevan Bima – a plan that rightly caters to have life insurance needs of an individual.
For first-time buyers of term life insurance, this product is a boon since the plan is the same across all insurers. It is a one-stop-solution for first-time term life insurance buyers. Also, people with limited understanding of term life insurance, often are not able to choose which plan to invest for the financial security of their dependents.
Having an insurance product with limited knowledge often leads to rejection of claim which does not solve the prime objective of buying any insurance product i.e. financial protection.
The introduction of Saral Jeevan Bima is being seen as a revolutionary move in the life insurance industry as it will bring the maximum of people under the insurance umbrella and mostly those falling under the lower-income group. The insurance regulator has always worked towards making insurance products customer-centric and available at affordable prices.
The entire process of standardisation of term life insurance product will make the buying process much simpler and will help in developing strong faith and trust between the customers and the life insurance ecosystem.
Decoding what all is covered
Saral Jeevan Bima – a non-linked non-participating individual pure risk term life insurance plan – pays out to the dependent the entire sum assured, in case of the demise of the insured person within the policy term.
While buying the policy, the customers must know that insurers will not be liable for a payout if the policyholder dies within 45 days of taking the policy except for death in case of an accident. Under Saral Jeevan Bima, customers will not receive any maturity benefit and surrender value under this policy. The plan can be bought by any individual without any restrictions on gender, place of residence, academic qualification and occupation.
The minimum and maximum entry ages for the Saral Jeevan Bima plan will be 18 years and 65 years respectively with the policy term ranging between 5 – 40 years. The maximum maturity age up to which the policy can be bought is 70 years.
Coming to the sum assured, the minimum sum assured that customers can opt for under the Saral Jeevan Bima policy will be Rs 5 lakh while the maximum will be Rs 25 lakh. The insurers may offer the plan under higher sum insured if the plan adheres to the given terms and conditions.
Best pick for first-time buyers
For first-time buyers, the Saral Jeevan Bima plan will help them make a stress-free decision as the features and offerings will be same across all life insurers. Moreover, uniform terms and conditions will leave very little-to-no scope for disputes while making a claim. However, while choosing a plan, it is important for the customers to compare the pricing of the plan offered by different insurers along with the claim settlement ratio.
Along with the Saral Jeevan Bima plan, the customer can buy IRDAI approved Accident Benefit and Permanent Disability Benefit riders. A rider is an add-on benefit that the proposer will have to purchase separately in addition to basic benefits as specified under this policy document.
The rider premium will be in addition to the premium paid under the base policy towards the additional cover/benefit opted under the rider. The rider sum assured will only be paid out if a specified event for which the add-on is bought takes place.
The author is CBO-Life Insurance, Policybazaar.com. Views expressed are that of the author.
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