Aditya Birla Sun Life Insurance Company Limited

Module 03 | Chapter: 08

Ch. 8: Saral Jeevan Bima?

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16 Jan 2023
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  • Key takeaways from this chapter

    Term Plans have always been available in the market, with multiple options to customise. These plans have restrictions around educational qualifications, income, geographic location. For instance, most term plans today provide covers only to people with more than 5 Lakhs of annual income. Many other plans limit the cover eligibility only to people who are graduate and above in qualification.

    IRDAI (Insurance Regulatory and Development Authority of India) has mandated every life insurance provider to offer Saral Jeevan Bima - a standard term insurance policy from 1st January 2021. This plan will be standardised in its nomenclature, terms and conditions, customization options across insurance companies plus have no restrictions related to education, income, location, occupation, etc.

    This IRDAI mandated plan is especially useful for individuals who want to purchase a term insurance cover for their families but do not meet the eligibility criteria to buy a regular term plan.

    How Does Saral Jeevan Bima Works?

    Saral Jeevan Bima works exactly like a regular term insurance policy. It pays a fixed sum of money to your family in case you pass away while the policy is active.

    There are two situations where a Saral Jeevan Bima will not offer the claim payout -

    1. Death due to suicide in the first year.
    2. Death due to sickness within the initial 45 days (This is an additional exclusion in Saral Jeevan Bima policy)

    Saral Jeevan Bima vs. Regular Term Insurance

    Here’s a comparison of the features provided by Saral Jeevan Bima and regular term insurance policies. Please note, the features of regular term insurance plans may vary from insurer to insurer - we’ve listed the common features that are available with most term plans.

    Saral Jeevan Bima Regular Term Insurance
    Sum assured Minimum: Rs. 5 Lakhs
    Maximum: Rs. 25 Lakhs (Insurers are allowed to offer Sum Assured beyond Rs. 25 Lakhs too)
    Minimum: Rs. 25 Lakhs
    Maximum: No limit as such.
    Entry age Minimum: 18 years
    Maximum: 65 years
    Minimum: 18 years
    Maximum: 65 years
    Policy duration Minimum: 5 years
    Maximum: 40 years
    Minimum: 10 years
    Maximum: 50 years
    Maximum maturity age 70 years Depends on the insurer.
    Premium pay Model Single premium, limited pay, Regular pay Single premium, limited pay, Regular pay (will vary across insurers)
    Payment modes Annually, semi-annually, monthly Annually, semi-annually, quarterly, monthly
    Maturity benefit No maturity benefit No maturity benefit
    Eligibility criteria No eligibility restrictions, as per IRDAI rulings. Minimum Education: Graduation
    Annual Income: Minimum Rs. 3 Lakhs.
    Location: Only a specific list of locations covered

    (These criteria vary from insurer to insurer)
    Initial waiting period 45 days (except for accidental death) No waiting period
    Payout options Lump sum payout option Lump sum, monthly income, lump sum + monthly income
    Riders Accidental death benefit rider, accidental disability rider Critical illness rider, accidental death benefit rider, accidental disability rider, waiver of premium on accidental disability/ critical illness rider, etc. (will vary across insurers)
    Tax Benefits Tax benefits available under section 80C and Section 10(10D) of the Income Tax Act. Tax benefits available under section 80C and Section 10(10D) of the Income Tax Act.

    How much does a Saral Jeevan Bima cost?

    Usually, due to the relaxation of the underwriting conditions, the premium of a Saral Jeevan Bima plan could cost more (around 50%) than the premium of a regular term insurance policy. This varies from insurer to insurer.

    Who should buy the Saral Jeevan Bima?

    Saral Jeevan Bima is ideal for those who are not eligible to buy a regular term insurance policy due to eligibility limitations related to education, occupation, income, etc. You should consider purchasing the Saral Jeevan Bima policy if

    • Your education qualification is 12th Standard and below.
    • Your annual income is on the lower side - this amount varies, depending on the insurer. A lesser income makes you ineligible for a regular term plan.
    • You live at a location that is excluded from regular term insurance.
    • You work in a risky profession that is not covered under regular term insurance.

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    Looking to buy Term Plan
    ABSLI Salaried Term Plan

    Exclusively For Salaried Individuals

    Optional Accelerated Critical Illness benefit

    Inbuilt Terminal Illness Benefit

    Life Cover upto 70 years

    4 Plan Options

    Life Cover

    ₹1 crore

    Premium:

    ₹492/month 1

    ABSLI Salaried Term Plan (UIN:109N141V01) is a non-linked non-participating individual pure risk premium life insurance plan; upon Policyholder’s selection of Plan Option 2 (Life Cover with ROP) this product shall be a non-linked non-participating individual savings life insurance plan.
    ¹ LI Age 21, Male, Non Smoker, Option 1: Life Cover, PPT: Regular Pay, SA: ₹ 1 Cr., PT: 10 years, Premium paying term: 10 years, Annual Premium: ₹ 5900/- ( which is ₹ 491.66/month) Premium exclusive of GST. On death, 1 Cr SA is paid and the policy terminates.
    ADV/4/22-23/76