Saral Jeevan Bima Yojana: Check Out the Policy Guidelines by IRDAI
Saral Jeevan Bima Yojana is a recently launched term life insurance product offered by insurance companies in India. It is a standardised pure term life insurance plan for individuals that will offer a fixed amount to the nominee in case of the demise of the policyholder during the policy tenure.
Since Saral Jeevan Bima Yojana is a standard product, the plan is offered by all life insurance providers with the same coverage and benefits. As a result, it makes it easier for the customers to understand the product and buy the policy for themselves.
Features of Saral Jeevan Bima Yojana
Take a look at the features of Saral Jeevan Bima Yojana:
- The minimum entry age is 18 years and the maximum is 65 years.
- The policy will be available for a minimum policy tenure of 5 years to a maximum of 40 years.
- The maturity age is not more than 70 years.
- The sum assured ranges from Rs 5 lakh to a maximum of Rs 25 lakh, in multiples of Rs 50,000. (Some insurers may offer a higher sum assured amount).
- A waiting period of 45 days from the policy commencement date is applicable.
IRDAI Guidelines on Saral Jeevan Bima Yojana
The IRDAI or the Insurance Regulatory and Development Authority has mandated all life insurance companies to offer Saral Jeevan Bima Yojana with standard terms and conditions. The guidelines for the policy has been stated in a circular issued by the IRDAI in October 2020. A potential life insurance buyer can know everything about Saral Jeevan Bima Yojana by going through the guidelines listed by the IRDAI. Take a look at the guidelines listed by the IRDAI on Saral Jeevan Bima Yojana:
For the Insurance Company:
- The name for the standard term insurance product will be ‘Saral Jeevan Bima Yojana’. However, the name of the insurance company offering the policy will be prefixed to this name.
- The insurer can offer the sum assured beyond Rs 25 lakh with no other changes in other terms and conditions.
- The insurance company should not pay any additional benefits/ variants/ options/ riders under the Saral Jeevan Bima Yojana besides the sum assured amount.
- If any large sum assured rebate is offered under the policy, it should be clearly indicated in the F&U.
- Saral Jeevan Bima Yojana can be offered with regular premium, single premium and limited premium payment term for 5 years and 10 years.
- The death benefit for single premium policieswill be more than 125% of the single premium paid. The insurer must pay the absolute assured amount in case of the policyholder’s death.
- The death benefit for regular and limited premium policies will be more than 10 times the annualized premium amount along with more than 105% of the total premium paid as of the date of the policyholder’s death. The insurer should ensure to pay the absolute assured amount in case of the policyholder’s death.
- No maturity benefit should be offered under Saral Jeevan Bima Yojana.
- The insurer must prominently mention in bold “This policy will cover death due to accident only during the waiting period of 45 days from the date of commencement of risk” on the first page of the sales literature and the welcome letter of the policy document.
- The insurance company should pay an amount equal to 100% of the total premium received, including taxes, to the policyholder. However, the sum assured amount should not be paid.
- No surrender value should apply to the Saral Jeevan Bima Yojana.
- The insurer must pay a policy cancellation value only if the policyholder applies for cancellation before the stipulated maturity date in case of single premium policies.
- In case of limited premium policies, the policy cancellation value should only be paid if the policyholder applies for a cancellation at the end of the renewal period, provided the policy is not revived, or if it is applied before the stipulated policy maturity date.
- No policy cancellation value should be paid in case of regular premium policy.
- The insurer can offer ‘Permanent Disability’ and ‘Approved Accident’ benefits as riders under the Saral Jeevan Bima Yojana.
- The price of the Saral Jeevan Bima Yojana should be as per the F&U.
- The insurer can charge interest on delayed premium payments as per their company policy for similar life insurance products.
For the Customer:
- The insurance company will not offer any additional benefits/ riders/ variants/ options under the Saral Jeevan Bima Yojana apart from the sum assured.
- Death by suicide is the only exclusion under this policy.
- While the single premium should be paid in a lump sum, payment for regular and limited premium options can be made monthly (for ECS and NACH only), half yearly and annually.
- No maturity benefit will be paid by the insurance company under the Saral Jeevan Bima Yojana.
- A waiting period of 45 days from the start date of the policy term will apply to the policy. Only death due to accident will be covered during the first 45 days of the waiting period.
- Saral Jeevan Bima Yojana does not come with a surrender value.
- The policy cancellation value will only be paid if the policyholder applies for the cancellation before the stipulated policy maturity date in case of single premium policies.
- Limited premium policyholder will get a policy cancellation value only if they apply for cancellation before the stipulated policy maturity date or at the end of the renewal period.
- No policy cancellation value will be paid to regular premium policyholders.
- Taking a loan against the Saral Jeevan Bima Yojana will not be allowed.
- The insurance company may offer ‘Permanent Disability’ and ‘Approved Accident’ benefits as riders under the policy.
- An interest rate will be charged on delayed premium payments as per the insurer’s policy for similar life insurance products.
Summing It Up
Saral Jeevan Bima Yojana is a dynamic life insurance product for people who are new to term life insurance or who often find the selection process for such policies very confusing. This policy will help such people as the IRDAI has issued standard guidelines to all insurance companies regarding the Saral Jeevan Bima Yojana.
The aforementioned guidelines are easy to understand and can clear any doubts that a potential buyer may have while buying this policy. Thus, make sure to go through these guidelines on Saral Jeevan Bima Yojana before buying it.