New Delhi: Buying life insurance has become an important part of planning one’s financial future in India. Scores of Indians have already woken up to the benefits of having a personal life insurance policy that safeguards them and their loved ones against unforeseen circumstances.
In recent years, the instances of buying term insurance have risen exponentially in India. The COVID 19 pandemic also spurred individuals to invest in life insurance, with insurers providing for COVID coverage in their policies. As per a report by the India Brand Equity Foundation, the insurance sector was expected to grow to USD 280 billion in the year 2020. Apart from increased awareness about life insurance, this growth was attributed to the GoI’s several initiatives in insuring the hitherto uninsured, thus bringing many more Indians in the ambit of life and health insurance.
India’s insurance providers, both in the public sector and the private company space, reported a huge 14% annual growth in annualised premium equivalent (APE) in October 2020, compared to 4% in September 2020.
However, despite insurers offering a multitude of insurance products and services, the process of selecting the right policy and insurance provider is often a daunting one. Features, riders, benefits, inclusions and exclusions and other provisos may differ from policy to policy.
In response to this problem, the IRDAI (Insurance Regulatory and Development Authority of India) introduced the Saral Jeevan Bima effective from January 1, 2021 across India and multiple insurance providers. Under this term plan, participating insurance providers in India all offer the same product, which is a term insurance designed to meet the broad demands of the average Indian consumer.
This term plan was introduced so that consumers could easily buy term insurance without the hassle of sifting through several pages of information or being bombarded with features and facts that made it difficult to arrive at a decision. Many consumers were also left confused about opting for one insurer over another, or whether they should buy individual term insurance instead of a money back policy or depend solely on company-sponsored life insurance. The Saral Jeevan Bima policy is the same plan even if it is offered by different insurers.
In terms of important facts, you must know about the Saral Jeevan Bima term plan, do note that:
- It is a non-linked, non-participating individual pure term insurance product.
- The policy premiums can be paid once (Single premium), for 5 years or 10 years (Limited Premium Payment) and regularly.
- The policy has uniform wording and the same terms and conditions, irrespective of the insurer you buy it from. It is one of the most transparent and simple term policies that anyone can buy. It is a great option for first-time buyers and also those who wish to buy life insurance online.
- The policy can be purchased by people who are 18 years old or a maximum of 65 years old.
- The policy can be bought for 5 years to 40 years.
- The plan does not base the sum assured on your annual income. However, you must have some source of income that can help you pay the plan premiums.
- The policy pays a lump sum amount to the policy holder’s nominee in case of the former’s unfortunate demise during the policy term. The plan pays 125% of the single premium or the absolute amount assured on demise, whichever is higher, for single premium payers. Meanwhile, the sum assured is 10 times of the annual premium or 105% of all premiums paid or the absolute amount assured on demise, whichever is highest, for annual premium payers.
- There is no maturity benefit or surrender value ingrained in the policy. You cannot borrow a loan against the policy.
- The policy is clear about its terms and conditions. There are no additional features or riders in the plan other than those mentioned in the policy document. Similarly, there are no exclusions except in cases of demise by suicide.
- The plan is offered to all Indians irrespective of gender, place of residence, educational qualifications and occupation.
- In terms of sum assured, the Saral Jeevan Bima plan offers a minimum amount of Rs 5 lakh and maximum of Rs 25 lakh. However, some insurers may offer a higher sum assured while keeping the terms and conditions of the policy the same.
The Saral Jeevan Bima term insurance plan can be purchased online in a few steps, after you select your preferred insurance provider offering the plan. Do note all terms and conditions before you buy and ensure that the nominated family member is appraised of the policy and how to file claims under it.