According to recent reports, only 35% of Indians have a health insurance cover. Among other reasons for low penetration, complex policies, high premiums, and lack of adequate information are the most significant. In this regard, the Insurance Regulatory and Development Authority of India (IRDAI) introduced a standard term insurance plan for the convenience and better understanding of policyholders. The plan is known as ‘Saral Jeevan Bima’.
Here is all you need to know about the new standard plan.
The IRDAI mandate
The IRDAI, on 15 October 2020, mandated all insurance companies to offer a standard term life insurance plan with effect from 1 January 2021. The standard term insurance, called ‘Saral Jeevan Bima’, is an individual term policy with simple features and similar terms and conditions across all insurance companies. The policy is structured to appeal to the needs of an average customer.
What is meant by standard term policy?
The standard term plan, Saral Jeevan Bima, is a non-linked, individual term life insurance. The policy is also non-participating, and a pure term insurance plan, which provides a lump sum payment in case of unfortunate death of the life insured, during the policy tenure.
Apart from the benefits, riders, variants, and exclusions mentioned in the policy annexure, no additional advantages are offered. The pure term insurance will have the same features, aids, inclusions and exclusions across all insurance companies. However, the prices, service and the claim settlement process might be different.
A standard term insurance plan is available for all individuals irrespective of gender, domicile, occupation, or educational qualifications.
Features of standard term plan
Here are some of the most important features of the Saral Jeevan Bima term insurance:
|Minimum and Maximum entry |
|18 years and 65 years, respectively|
|Policy tenure||Between 5 to 40 years|
|Maximum age at maturity||75 years|
|Minimum and Maximum Sum |
|?5,00,000 and ?25,00,000, respectively. Option to extend the cover over ?25,00,000 under the same policy|
|Premiums||Regular premiums, restricted premium tenure for 5 and 10 years, and single premium|
|Mode of premiums||Annual, Semi-annual and monthly for regular and premium payments.|
Lump-sum payment for single premium
|Death benefit||In the case of regular and limited |
premiums, the death benefit is the
highest sum of:
1) 10 times the
2) 105% of
overall premiums paid till date
3) The specific sum assured
payable on death
In the case of single premium policies, the death benefit is the highest
1) 125% of single premium
2) The specific sum assured payable on death
|Maturity benefit or surrender |
|Waiting period||45 days from the date of the |
beginning of the risk
|Riders||Only accident benefit and |
Overall, the standard term insurance aims to provide a convenient and easy term life plan solution to customers of all social segments, thereby, ultimately increasing the penetration of term insurance in India. Any specific changes in the policy will be issued by the IRDAI time-to-time. However, be careful while choosing an insurance provider and always make an informed decision.
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