Saral Jeevan Bima - Features, Benefits, Details, etc.

The Insurance Regulatory and Development Authority of India (IRDAI) has announced the guidelines for the ‘Saral Jeevan Bima', i.e., the standard individual term life insurance product that will be offered by all life insurers to establish a simple, individual term life insurance plan with uniform features and terms. This type of standard product will make it easier for customers to make intelligent decisions, increase confidence between insurers and life assured, and eliminate mis-selling as well as potential claim settlement issues. So, let us learn more about the Saral Jeevan Bima plans.

What is a Saral Jeevan Bima Plan?

The Saral Jeevan Bima is the name given to the standard term life insurance plan for individuals, sold by every life insurance company. The insurers are allowed to prefix their company's name to avoid any confusion. By definition, it is a non-linked, non-participating, individual, pure-risk, premium life insurance plan that pays the nominee the sum assured in a lump sum in the event of the life assured's untimely death during the policy term. The product will have the same attributes, advantages, inclusions, and exclusions across insurers. However,  prices, service levels, and claim settlement rates may vary. Moreover, the product will be available to everybody, regardless of gender, residence, or other factors.

Why was the Saral Jeevan Bima Plan Introduced?

There are numerous term products available in the market, each with its own set of terms and conditions. However, individuals who do not have enough time or energy to make well-informed decisions find it challenging to choose the best product. Furthermore, products might not even be available for the desired sum assured. So, as a solution to address all these problems and a plan that will broadly suit the needs of the ordinary consumer from all life insurers, the IRDAI introduced the Saral Jeevan Bima plans. 

What are the Features of Saral Jeevan Bima Plans?

Here are some basic features of Saral Jeevan Bima Plans.

1. Eligibility - The minimum eligibility age is 18 years while the maxim eligibility age is 65 years. 
2. Policy Tenure - The plan term can range from 5 years to 40 years. 
3. Premium Payment Frequency - The premiums can be paid in a lump sum as a single payment or in monthly, half-yearly or yearly instalments as regular or limited payment.
4. Maturity Benefits - There are no maturity benefits under the plan. 
5. Loan - Under this plan, no loan is permitted by the insurance companies. 
6. Surrender Value - There is no surrender value under the plan. 
7. Riders - Rider benefits like accidental death cover, permanent disability cover etc. can be opted by paying some extra premium.
8. Exclusions - The plan only has a suicide exclusion clause. 
9. Death Benefits - For regular and limited premium payment policies, the highest of ten times the annualised premium, 105 per cent of all premiums paid as of the date of death, and the absolute sum assured is to be paid on death. On the other hand, for single payment premium policies, the greater of 125 percent of the single premium or the total sum assured is to be paid on death.

What are the Benefits of Saral Jeevan Bima Plans?

Here are some benefits of the Saral Jeevan Bima plans.

1. Death Benefits 

The regular term plan, Saral Jeevan Bima, pays the sum assured to the beneficiary in the case of the life assured's untimely death. The death benefit ensures that the family of the deceased can deal with any financial difficulties that may emerge without having to sacrifice their basic needs due to a lack of finances.

2. Rider Options

The additional rider benefits like accidental death coverage and permanent disability coverage helps in building a robust financial corpus. These riders can be bought on the base plan by paying some extra premium amount. So, if the situation mentioned in the rider ever happens, the rider sum assured will be paid by the insurance provider. 

3. Waiting Period

Saral Jeevan Bima has a 45-day waiting period from the date of risk initiation. If the policy is revived, the waiting period does not apply. During the 45-day waiting period, Saral Jeevan Bima also covers death caused by accident. Moreover, it must be noted that policy will be terminated if the life assured dies by suicide within the 12 months of policy inception. 

4. Tax Benefits

Purchasing Saral Jeevan Bima provides you with both life coverage and tax benefits. Tax deductions are available for Saral Jeevan Bima premiums paid under Section 80C of the Income Tax Act of 1961.

5. Covid-19 Cover

The IRDAI mandated the issuance of the Saral Jeevan Bima by all life insurance providers from 1st January 2021. Hence, the plan was created by keeping the Covid-19 pandemic in the account, and the plan provides pure protection coverage for the virus. 

Endnotes

The Saral Jeevan Bima plan can be bought in offline mode by visiting the insurance company office as well as through online company websites and portals. Moreover, it is wise to choose a reliable and trustworthy insurer with a high claim settlement ratio to avoid any claim rejections when the time comes. 

Also read:-

• What is Joint Life Insurance? What are the Benefits of Purchasing It?
• What mistakes can I avoid while purchasing a life insurance plan?

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.