Saral Jeevan Bima To Narrow Down The Protection Gap

In the last few years, there has been an increased customer preference towards pure term life insurance products. In line with the growing demand, life insurers have been introducing innovative protection products, with different features, options, riders, etc. There are many term products in the market with varying terms and conditions. However, customers can not devote enough time to make informed choices to choose the right product. Also, products may not be available for the intended sum assured.

To take care of this situation and to make available a product by all life insurers that will broadly meet the needs of an average customer, the IRDAI had directed insurers to launch a standard, individual term life insurance product, with simple features and standard terms and conditions. The standard individual term life product is called 'Saral Jeevan Bima'.

Saral Jeevan Bima is a non-linked non-participating individual pure risk premium life insurance plan. It is a simple life insurance policy in which lump-sum payment of sum assured is done to the nominee in case life assured passes away during the policy term.

These plans have been brought specifically for people who have irregular sources of income and thus, don’t have standard income documents for getting a term insurance policy. A lot of businessmen, freelancers, labourers, homemakers, people working in unorganized sectors usually don’t have standard income documents.

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So, Saral Jeevan Bima is an attempt to make term insurance accessible for all including self-employed and women who are unemployed. Sadly, the penetration of term insurance among women is extremely low in India. With the rise in the number of working women in India, it is extremely important to raise awareness about term insurance. Not just working women, homemakers should also insure themselves because they play a central role in managing household finances. Not just managing the finances, taking care of the entire household is a full-time job in itself. From that perspective, term life insurance is also equally important for a homemaker.

The plan largely caters to people belonging to the lower-income group. Suppose, there is an individual who earns between Rs 3-5 lakhs per annum and is the sole breadwinner of his family. Unfortunately, if he passes away, who would bear the expenses of his loved ones? It will be a huge emotional as well as financial tragedy for the entire family. So, having a term cover is the need of the hour especially for the economically weaker section of the society.

Earlier, many people were not issued term insurance policies as they were not graduates and above. Your education level is a very important factor while deciding on the sum assured. However, this plan caters to the section of people who are only graduates or even undergraduates. So, the introduction of these plans is a very good step in narrowing down the protection gap.

The policy shall be offered to individuals without restrictions on gender, place of residence, travel, occupation, or educational qualifications. Moreover, this plan is only available online at the click of a button. Therefore, it also caters to people living in Tier 3 and Tier 4 cities where awareness around term plans is less but the need for term plans is very high. Since the reach of offline term life insurance is lesser in rural areas, the introduction of Saral Jeevan Bima has made term life insurance accessible in rural areas and small towns as well.

Benefits of Saral Jeevan Bima

There are many benefits of Saral Jeevan Bima. Choosing a plan becomes easier as all insurers are offering the same benefits, policy inclusions, and exclusions. The plan is simple and easy to understand with affordable premiums.
In addition, premiums for this policy can be paid monthly. So, it will be very beneficial for customers who could not earlier afford a term life insurance policy. EMI option helps plan finances better as you don’t have to shell the entire premium amount from your pocket in one go. There will also be a 20% discount on the policy when bought online. Moreover, since the sum assured under the policy is restricted to Rs 25 lacs, it is a good option for those who don’t have life insurance as of now.

Features

The minimum entry age for the plan is 18 years and the maximum entry age is 65 years. Sum assured being offered under the plan is in between Rs 5 lacs- 25 lacs. The policy period will range from 5-40 years. Insurers will not be liable for a payout if the policyholder dies within 45 days of taking the policy except for death in case of an accident. Surrender value is not applicable under this policy. Rider options under the policy include accident benefits and permanent disability benefits. There shall be no maturity benefit under the policy.

Currently, PNB Met Life, Edelweiss Tokio Life, Aegon Life, Exide Life Insurance, and Max Life are offering this plan. For a 30-years-old male non-smoker earning Rs 5 lacs and above, the cost of Rs 25 lacs sum assured PNB Met Life Saral Jeevan Bima will be Rs 556 per month.

Compare plans on the basis of the insurer
As the features, as well as terms and conditions of the plans, are the same across insurers, one should look at the claim settlement ratio when choosing the plan. The claim settlement ratio is an important factor when choosing term life insurance because it is the percentage of claims settled by an insurer compared to the total number of claims received. Higher the claim settlement ratio, the better the insurer in settling claims.

“Individuals should also look at the ease of onboarding as well as the insurer’s after-sales support and service, including renewal of the insurers, before choosing a plan,” added Agarwal. To compare various plans, you can log on to policybazaar.com and make your insurance buying journey easier and simpler wherein you can compare various products online and get end-to-end digital services.