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 -
- Death due to suicide in the first year.
- 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.
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Saral Jeevan Bima
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Regular Term Insurance
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Sum assured
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Minimum: Rs. 5 Lakhs
Maximum: Rs. 25 Lakhs (Insurers are allowed to offer Sum Assured beyond Rs. 25 Lakhs too)
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Minimum: Rs. 25 Lakhs
Maximum: No limit as such.
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Entry age
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Minimum: 18 years
Maximum: 65 years
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Minimum: 18 years
Maximum: 65 years
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Policy duration
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Minimum: 5 years
Maximum: 40 years
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Minimum: 10 years
Maximum: 50 years
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Maximum maturity age
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70 years
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Depends on the insurer.
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Premium pay Model
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Single premium, limited pay, Regular pay
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Single premium, limited pay, Regular pay
(will vary across insurers)
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Payment modes
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Annually, semi-annually, monthly
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Annually, semi-annually, quarterly, monthly
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Maturity benefit
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No maturity benefit
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No maturity benefit
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Eligibility criteria
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No eligibility restrictions, as per IRDAI rulings.
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Minimum Education: Graduation
Annual Income: Minimum Rs. 3 Lakhs.
Location: Only a specific list of locations covered
(These criteria vary from insurer to insurer)
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Initial waiting period
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45 days (except for accidental death)
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No waiting period
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Payout options
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Lump sum payout option
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Lump sum, monthly income, lump sum + monthly income
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Riders
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Accidental death benefit rider, accidental disability rider
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Critical illness rider, accidental death benefit rider, accidental disability rider, waiver of premium on accidental disability/ critical illness rider, etc.
(will vary across insurers)
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Tax Benefits
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Tax benefits available under section 80C and Section 10(10D) of the Income Tax Act.
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Tax benefits available under section 80C and Section 10(10D) of the Income Tax Act.
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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.