The recently released Economic Survey made a surprising and problematic revelation! According to their data, despite the crucial benefits offered by a term insurance policy, the insurance penetration in India is only 3.76%. India’s life insurance term plan penetration is significantly lower when compared to the global average as well as other Asian counterparts.
This is because there is a lack of awareness in our country about insurance products. The average Indian seems to be unaware of the benefits offered by the best term insurance plan and oblivious of the fact that even a low term insurance premium can provide a significant life cover.
To overcome this concern, the Saral Jeevan Bima plan is a simplified and standardised term life insurance policy unveiled by the Insurance Regulatory and Development Authority (IRDAI). It is the best term insurance to understand as all life insurance companies are expected to abide by the policy product guidelines proposed by the IRDAI.
Reasons for Introduction of Saral Jeevan Bima - Standard Term Plan by IRDAI
For efficient financial planning, there is a need to educate about term insurance plans in India. The best term insurance cannot only provide you with the necessary life cover but ensures the financial security of your loved ones even in your absence. Here are some of the primary reasons why the IRDAI witnessed a need to launch the Saral Jeevan Bima:
· In an attempt to make insurance affordable and available for every individual, the IRDAI launched the Saral Jeevan Bima.
· It aims to dismantle the misunderstanding that a term life insurance policy is a complex and challenging financial product to understand. The Saral Jeevan Bima is amongst the easiest term insurance plans in India to understand as the features, benefits, inclusions, and exclusions all remain the same across the different insurance companies.
· It aims to improve the insurance penetration in India as the eligibility criteria that requires a certain minimum income requirement to buy term insurance makes it largely unavailable to the average buyer.
· It is the best term policy for first-time buyers and will enable an informed choice and enhance the trust between the insurance provider and the insurance seeker.
· The availability of its purchase online makes it easier to compare different term plan quotes to ensure you buy the best term policy that is aligned with your financial needs.
According to the IRDAI, the standard individual term life insurance product will be called Saral Jeevan Bima, with the insurer's name prefixed to the product name.
This life insurance term plan provides a sizeable life cover at a comparatively low term policy premium. The guidelines have been provided to ensure that individuals get the best term insurance without having to worry about hidden terms and conditions. The few things that would differ among insurance companies are the prices, such as the term policy premium and the term plan quotes, the service quality, and the claim settlement ratio, among other things.
Features of the Saral Jeevan Bima
To help you get acquainted with the details of the term life insurance policy, here is a list of its salient features as proposed by the IRDAI:
· The Saral Jeevan Bima is a non-linked, non-participating, individual pure risk premium term life insurance policy that will provide the nominated beneficiary with the pre-determined sum assured in a lump sum if the policyholder passes away while the policy is still in force.
· Apart from the benefits and riders that have been stated in the annexure, no other riders, benefits, options, or variants shall be offered with the plan.
· Apart from death by suicide, there shall be no other exclusions under the product.
· The Saral Jeevan Bima is available to every individual regardless of their gender, place of residence, travel, occupation, or educational qualifications.
Salient Elements of the Saral Jeevan Bima Plan
Apart from the aforementioned, the additional features and benefits of the Saral Jeevan Bima include:
Minimum Entry Age
Maximum Entry Age
5 to 40 years
Maximum Maturity Age
Minimum ₹ 5,00,000; Maximum ₹ 25,00,000* (SA would be allowed only in the multiple of 250,000)
Premium Payment Options
Limited premium payment for a 5 or 10-year term
Mode of Premium Payment
Single premium: in a lump sum
Limited and Regular premium payment: Yearly or half-yearly and monthly (only within NACH/ECS
For Regular and Limited premium policy, highest of:
· 10 times the annual premium
· 105% of all the premiums paid as of the date of death
· Absolute amount assured to be paid on death
For Single premium policy, highest of:
· 125% of single premium
· Absolute amount assured to be paid on death
As a pure term policy, there shall be no maturity benefit
Accident benefit and permanent disability benefit riders can be attached
No loan is permitted against the policy
Only the suicide clause, as per extant regulations
45 days from the date of commencement of risk. In case of renewal, the waiting period shall not be applicable.
Surrender policy is not applicable under this policy
Interest on delayed payment of premiums
The rate of interest would be similar to other insurance products available
Edelweiss Tokio Life Saral Jeevan Bima Term Insurance
The Saral Jeevan Bima by Edelweiss Tokio Life is a term life insurance that comes with numerous benefits. Aiming to ensure wholesome family protection and being attentive to current requirements, the Edelweiss Tokio term plan also covers death due to COVID-19. It is a flexible term life insurance where the policyholder can choose between 5 to 40 years and a life cover between ₹500,000 and ₹25,00,000. The term policy premium payment options also allow insurance-seekers to choose the most suitable and term policy for themselves.
There are numerous term life insurance policies available in the market; however, if you are new to insurance and are unaware of the terms and conditions, the Saral Jeevan Bima by IRDAI is the best term policy that provides a sizeable life cover at a low term policy premium.
Neha Panchal - Financial Content Writer
Neha used to be an Engineer by Profession and Writer by passion, which is until she started pursuing full-time writing. She's presently working as a Financial Content Writer, with a keen interest in all things related to the Insurance Sector.