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Benefits Offered by Saral Jeevan Bima Yojana

To simplify the procedure of buying a term insurance plan for customers, the Insurance Regulatory and Development Authority of India (IRDAI) has released the rules on standard individual term life insurance plans to be known as “Saral Jeevan Bima”. All the life insurance providers are directed to offer the plan mandatorily. The Saral Jeevan Bima plan is specifically launched by IRDAI with simple features and standard terms and conditions to make it easy for buyers to make an informed choice. Moreover, with this new rule on standard individual term life insurance plans, the trust between the insurer and insured will also increase and it will also reduce the mis-selling of policies

The New Saral Jeevan Bima policy will be sold by all the life insurance providers compulsorily from 1st January 2021. Further in this article, we have discussed the features and benefits of the Saral Jeevan Bima Yojana plan in detail. 

Pure Risk Plan

The Saral Jeevan Bima plan is a pure risk cover non-participating, non-linked term life insurance policy, which will provide insurance coverage as a sum assured amount to the beneficiary of the policy in the case of the unfortunate decease of the life assured during the tenure of the policy. As a pure term policy, there will be no surrender value or maturity benefit offered under the plan. The policy will be accessible to people without any restriction on the place of residence, travel, educational qualifications, gender, or occupation.  

As there is a wide range of term insurance policies available in the market, choosing the right plan can be difficult for customers. To cater to the various requirements of the customers and to make Saral Jeevan Bima Yojana available by all life insurance companies, these guidelines are released by the IRDAI. 

In the past few years, the demand for pure life insurance plans has increased significantly. To meet the increasing demand for policy buyers, life insurance providers have introduced advanced insurance products with different features, options, riders, etc. 

Same as the standard health insurance product ‘Arogya Sanjeevani’, the Saral Jeevan Bima term life insurance plan will also be the same across all life insurers. It will have the same benefits, inclusion, exclusion, and features.  However, claim settlement rate, the prices, service level may vary from insurer to insurer. 

Why buy Term Insurance early?

Your premium is decided on age at which you buy the policy and remains same, throughout your life

Premiums can increase between 4-8% each year after your Birthday

Your policy application could be rejected or premiums increase by 50-100%, if you develop a lifestyle disease

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Eligibility Criteria of Saral Jeevan Bima 

Let’s take a look at the eligibility criteria of the policy.

Eligibility Criteria  Minimum  Maximum
Entry Age 18 years 65 years
Policy Term  5 years 40 years
Maturity Age -- 70 years
Sum Assured  Rs. 5,00,000 Rs.25,00,000
Premium Payment Options  Regular Pay Limited Pay- 5 years &10 years  Single Pay

Death Benefit & Waiting Period 

In the event of the death of the life assured during policy tenure; 

For limited premium payment policy or regular premium payment, the death benefit paid to the beneficiary of the plan will be highest of either 10 times of the annualized premium or 105% of the total premium paid as on the date of death or absolute amount of sum assured to be paid on death. 

For a single premium payment policy, the death benefit paid to the beneficiary of the policy will be higher of 125% of the single premium or absolute sum assured amount to be paid on death. 

The waiting period of the plan will be of 45 days from the date of commencement of risk. The waiting period will not be applicable in case of policy revival. The policy will provide death coverage due to accidents only during the 45 days waiting period from the date of commencement of risk. If the life assured dies due to an accident during the waiting period then an amount equal to 100% of the premium paid excluding the taxes will be paid to the beneficiary and no sum assured amount will be paid.  The policy will be annulled in case the life assured commits suicide within 12 months from the date of policy initiation. 

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Rider Options 

Add-on accidental and disability benefit riders can also be availed under the policy. The riders are additional benefits offered by the policy to increase the coverage of the policy. The policyholder can add rider options to the base plan by paying an extra premium along with the basic premium of the policy. The rider sum assured will be the assured amount payable in case any specific event covered under the rider happens and opted by the policyholder. 

Wrapping it Up!

All life insurance companies permitted to manage new business shall compulsorily offer the standard product Saral Jeevan Bima with effect from January 1st, 2021. The product can be filed by the insurance providers latest by December 1st, 2020. 

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Written By: PolicyBazaar - Updated: 25 February 2021
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