There is some good news for the customers who wish to buy a term insurance that is less complicated and is easy to understand and access. Well, the onset of the new year will make available a term insurance policy with a simplified procedure. Keeping in mind the needs of people, the Insurance Regulatory and Development Authority of India (IRDAI) has released rules on standard individual term insurance plans.
Saral Jeevan Bima, as the name suggests, is specifically launched with standard terms and conditions and simple features to allow customers to make informed choice. The introduction of the policy will reduce miss-selling of policies and is likely to increase the trust between insurer and insured. The insurance regulator has made it mandatory for all life insurance policy providers to offer the plan to its customers starting January 1.
Saral Jeevan Bima is a pure risk cover with standard wording of sum assured. It will be available for buyers between 16 and 65 years of age and the plan will automatically terminate when the buyer reaches the maturity age of 70 years. The policy has a minimum term of 5 years and stretches up to 40 years. The minimum sum assured is Rs 5 lakh while the maximum is Rs 25 lakh.
In case of death, for limited premium payment or regular premium payment, the benefit paid to beneficiary will be highest of either 10 times of the annualized premium or 105 percent of the premium paid till death. For single premium payment, the death benefit will be higher of 125 percent of the single premium or absolute sum assured amount.
The plan will be available on digital platforms, making it more transparent for the customers. If you buy the plan online, you get a 20 percent discount on the premiums. This will allow the customers to compare other policies, their premiums and benefits at the comfort of their homes.
Most term plans consider your annual income to decide the amount of sum assured, but with Saral Bima Yojana allows the customers to buy the sum assured without taking into consideration their annual income.
But, before buying the policy, one must also look at the solvency ratio and the claim settlement ratio of the company. The claim settlement ratio is the percentage of claims paid compared to the total claims received and the solvency ratio of an insurer shows company’s ability to meet its obligations.
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