The Insurance Regulatory and Development Authority of India (IRDAI) recently mandated all life insurance companies to come out with a standardised term insurance policy known as Saral Jeevan Bima -- simplified life insurance. The purpose of this product is to increase the penetration of life insurance in India.
Saral Jeevan Bima, as the name suggests, is specifically launched with standard terms and conditions and simple features to allow customers to make an informed choice.
"In the past, we have seen that many policyholders were not able to get a lower sum assured because of various reasons. But with this policy, customers can even get lesser coverage," opines Rakesh Goyal, Director, Probus Insurance, Insurtech Broking Company.
However, as Goyal adds, individuals should have pure insurance cover of at least 10-15 times of their annual income.
Talking about premiums, Santosh Agarwal, CBO-Life Insurance, Policybazaar shares that Saral Jeevan Bima has no filters like income category, occupation, education level, etc. This is unlike a term insurance plan, where premiums are based upon these factors.
"People who are not eligible to buy regular term products due to the unavailability of regular income proof and required educational qualification, can now easily invest in a Saral Jeevan Bima. This plan provides a higher issuance rate for the lower-income segment group compared to the other term plans available," Agarwal explains.
The plan is considered a revolutionary move, Agarwal adds, as it will provide protection to the often "left-out" segment.
The minimum age of entry is 18 years and the maximum entry age is capped at 65 and the maximum maturity age is 70 years. The policy term extends from 5 to 40 years.
The minimum sum assured under the product is Rs 5 lakh, and the maximum can go up to Rs 25 lakh. The policyholders also have the option of providing a sum assured beyond Rs 25 lakh.
The product offers three premium payment options; regular premium, limited premium payment term for 5 years and 10 years, and single premium.
Individuals are allowed to choose from regular premium payment throughout the policy term, single premium payment in lumpsum, or limited premium payment (5, 10 years) options.