Buying life insurance is a significant decision in our lives as it helps us plan to deal with the aftermath of uncertainties. Many of us look forward to life insurance products that are quite easy to understand. This is one of the reasons why more people are willing to buy pure term plans than other types of life insurance policies. Since there are several factors you need to consider before buying a term plan, the Insurance Regulatory Development Authority of India (IRDAI) introduced guidelines for a standardized insurance plan, also known as Saral Jeevan Bima.
All the life insurance companies have to follow the standard product guidelines laid by IRDAI while offering such a policy to prospective policy buyers.
Before we move into the details of Saral Jeevan Bima, let’s cover some of the related aspects first.
What is Standard Term Life Insurance Product?
As per IRDAI guidelines for a standardized policy, life insurance companies are allowed to offer a standardized individual term insurance plan, which will be called ‘Saral Jeevan Bima’. This has been initiated from Jan 1, 2021, while the product was to be filed by different insurers by Dec 1, 2021. The name of the insurance company will be prefixed to the plan to make the full name of this insurance product.
Why Did IRDAI Launch Standardized Life Insurance Policy?
To fulfill the need to buy a term insurance plan, you can easily find several options available in the market. You are also advised to invest your time in researching different types of term insurance plans before selecting an option. In many cases, policy buyers are not eligible for the sum assured they want to choose with a term plan because of several related clauses.
Such situations highlight the need for a standard term insurance plan that almost every individual can buy under simplified terms and conditions. Making such a term life insurance product available for the customers is also aimed at building the trust factor with the insurers and minimize potential disputes.
Fulfilling this need, IRDAI, using the powers of the Insurance Act as per Section 34(1) (a), directed all the life insurance companies in India to offer ‘Saral Jeevan Bima’ mandatorily.
What is Saral Jeevan Bima?
In insurance terminology, Saral Jeevan Bima can be defined as a non-linked, non-participating, individual pure risk plan. It provides a sum assured in lumpsum to the policy nominee in the event of unfortunate demise of the life insured.
Saral Jeevan Bima is meant for all policy buyers irrespective of their occupation or education – the two most common parameters that are considered while offering term plans. Other than the suicide exclusion clause, there are no other exclusions associated with this type of term insurance plan.
In simpler words, Saral Jeevan Bima availability has made it easier for you to plan for the financial security of your family. Under this plan, you will not face any restriction of gender, occupation, place of living, or qualifications. Its terms and conditions stay the same no matter which insurer you choose. However, you may find a slight difference in the Saral Jeevan Bima premium offered by different insurance companies. You can use Saral Jeevan Bima premium calculator online to check how the premium varies as per the chosen sum assured.
Under Saral Jeevan Bima, the lower limit of sum assured is kept at Rs. 5 Lakhs, the corresponding premium for which is easily affordable. In case of your premature demise during the policy term, the nominee from your family will receive the death benefit to maintain financial strength in life.
If you could not purchase a term plan because of stringent checks and parameters defined by life insurers, there are many reasons you should choose Saral Jeevan Bima.
Also Read: Types of Term Insurance Policies in India
Key Features of Saral Jeevan Bima
Given below are the details of the key features of Saral Jeevan Bima that will help you understand it better:
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Multiple Premium Payment Options
You can buy Saral Jeevan Bima by choosing any of the three most common modes of paying the premium – single premium, regular premium, limited payment of premium for a period of 5 or 10 years.
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Easy to Choose a Suitable Premium Payment Term
You can opt for an adequate life cover under this insurance plan by paying the premiums for five to forty years.
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Multiple Premium Payment Modes Available
With Saral Jeevan Bima, you can pay the premium as a lumpsum for a single premium payment choice. On the other hand, you can select monthly, half-yearly, or yearly mode of payment with regular or limited premium payment options.
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Least Restrictions to Get Life Insurance Coverage
With Saral Jeevan Bima, you need not worry about the restrictions on education, place of living, occupation, or gender while applying for the policy.
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Long Term Coverage
Under this unique life insurance policy, you can get life insurance coverage up to the age of seventy in life.
Benefits of Saral Jeevan Bima
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Easy to Plan for Family’s Financial Securit
With Saral Jeevan Bima, you can ensure financial security for your loved ones in case of your unfortunate demise. The policy nominee will receive the sum assured as defined in the purchased plan.
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Tax Savings
The premiums you will pay for this plan become eligible for tax deductions and can help you reduce your tax liability in every financial year.
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Significant Death Benefit Payable to the Nominee
The sum assured you choose while buying Saral Jeevan Bima is payable as a lumpsum to the nominee. It is calculated based on the occurrence of death before or after the waiting period of 45 days from the day of policy inception.
- In case the insured dies within the waiting period because of an accident, the total sum assured is payable to the nominee. For the causes of death other than the accident, sum assured equals the sum of all premiums paid excluding taxes.
- In case the life insured passes away after 45 days of buying Saral Jeevan Bima, the death benefit is the highest of ten times the annualised premium, 105% of the premiums paid till death, or absolute sum assured (for regular and limited premium payment options).
How Does Saral Jeevan Bima Work?
Let us consider an example that showcases the functioning of Saral Jeevan Bima –
Mr. Singh, a 30-year-old street vendor, purchased Saral Jeevan Bima for his family and chose a life cover (sum assured) of Rs. 20 Lakhs with a policy period of 40 years. Unfortunately, after ten years of buying the policy, he passed away, leaving his family behind with no breadwinner. As he had chosen Mrs. Singh as the policy nominee, she received the death benefit of Rs. 25 Lakhs.
Note: The above example does not create any obligation or right for the insured or nominee.
You May Also Like to Read: What is Term Insurance?
Eligibility Criteria for Saral Jeevan Bima
Here are some of the eligibility criteria you must fulfill to buy Saral Jeevan Bima:
- The entry age should be between 18 to 65 years.
- The premium payment option can be chosen only at the time of buying the plan but cannot be changed later.
- The maximum cover ceasing age defined for Saral Jeevan Bima is 70 years.
- The range of sum assured you can choose under Saral Jeevan Bima varies from Rs. 5 Lakhs to Rs. 25 Lakhs.
Policy Termination Rules of Saral Jeevan Bima
Saral Jeevan Bima terminates automatically and immediately on the occurrence of any of the following events:
- After the death benefit has been paid to the nominee
- After the settlement of refund in case of policy cancellation
- After the policy matures
- In case of plan cancelation during the free look period of Saral Jeevan Bima
- On the expiry of revival period which is five years
How to Buy Saral Jeevan Bima?
The process of buying Saral Jeevan Bima policy is quite simple and straightforward. You can buy it from any of the life insurance companies in India by following a few simple steps.
Steps to Buy Saral Jeevan Bima Online
Step 1: Search for the official website of the life insurer of your choice that offers Saral Jeevan Bima.
Step 2: On the Saral Jeevan Bima policy page, apply for it online and fill up the application form.
Step 3: Submit the duly filled application form for Saral Jeevan Bima online with the required documents.
Steps to Buy Saral Jeevan Bima Offline
Step 1: Visit the nearest branch office of the chosen life insurance company.
Step 2: Ask about the detailed plan and procedure to buy Saral Jeevan Bima.
Step 3: Take and fill the application form with your details.
Step 4: Submit the form with the required documents offline to complete the process.
Documents Required for Saral Jeevan Bima Plan Purchase
Given below is the list of documents you need to buy Saral Jeevan Bima:
- Identity proof (PAN card, Aadhaar Card, Passport, etc.)
- Address proof (Aadhaar Card, Passport, Driving License)
- Passport size photograph
- Active mobile number
Saral Jeevan Bima FAQs
1. Who Should Buy Saral Jeevan Bima?
Any individual, whether he/she is married or unmarried, can buy Saral Jeevan Bima to plan for the financial well-being of family.
2. How to Check Saral Jeevan Bima Premium Online?
You can easily compare the premium of Saral Jeevan Bima offered by different life insurance companies by using an online premium calculator.
3. What is the waiting period for Saral Jeevan Bima?
The waiting period associated with this life insurance plan is 45 days.
4. What is the grace period linked with Saral Jeevan Bima policy?
It depends on the life insurance company you select. In general, it is 30 days which begin from the premium due date.
5. Is a free-look period available with Saral Jeevan Bima plan?
Again, the life insurer you select to buy this plan determines the free-look period offered with it. In most cases, you will find it to be around 15 days.
6. What should I consider while comparing Saral Jeevan Bima premiums?
You should look at the primary factors, such as your age, gender, selection of sum assured, and policy period while buying Saral Jeevan Bima.
7. Why do many life insurance companies offer Saral Jeevan Bima?
As per IRDAI guidelines, all the life insurance companies in India are mandated to offer a standard pure term plan to the policy buyers.
