Ch. 8: Saral Jeevan Bima?

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.

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)

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.

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.

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.