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10 things to know about Saral Jeevan Bima Policy

Mr. Singh, a 26-year-old government employee, bought Saral Jeevan Bima policy to ensure the financial protection of his family. So, he selected the regular pay option with Rs 25 lakh sum assured and a policy term of 40 years. Unluckily, he passed away in a road accident within 5 years of buying Saral Jeevan Bima plan. He had paid the premium for 5-years.

Because he died in an accident, his wife who was the policy beneficiary received a sum of Rs 25 lakh from the Insurance Company. Financial protection for the dependent family members due to the untimely demise of the sole-earner is one of the major benefits of this standard term insurance policy.

What is Saral Jeevan Bima Policy?

The Insurance Regulatory Development Authority of India (IRDAI) has advised all the Life Insurance companies in India to provide Saral Jeevan Bima policy. It is a standardized term insurance product with the same policy features and policy wordings. This move was made to make it simple for the policyholders to compare and buy term insurance schemes.

10 Important Things for you to Know about Saral Jeevan Bima Policy

Saral Jeevan Bima Insurance is here to serve ‘The Real India’ that often remains uninsured. As the features and the terms and conditions of the policy are the same across the insurers, the only difference of the cost of the premium. You can check out 10 crucial aspects of this product before buying it:

  • Entry Age Criteria- The minimum entry age to buy this term insurance policy is 18 years and the maximum entry age goes up to 65 years.
  • Policy Term- Saral Jeevan Bima policy can be purchased for a duration of 5 years to 40 years.
  • Saral Jeevan BimaMaturity Age- The maximum maturity age in this product is 70 years.
  • Minimum and Maximum Sum Assured- Under this scheme, the minimum sum assured is Rs 5 lakh and the maximum is Rs 25 lakh. Thought the insurance companies have an option of offering a higher sum assured with all the policy terms and conditions remaining the same.
  • Saral Jeevan Bima Premium Payment Options: You have the option to pay Regular premium, Limited premium for 5 years and 10 years, and Single premiums.
  • Mode of premium payment: Saral Jeevan Bima premium can be paid on yearly basis, once in six months, Monthly (only under ECS /NACH), and a single Lumpsum premium can be paid.
  • Death benefit- Yes, the policy offers death benefit cover. If the policyholder dies during the policy term then the beneficiaries are entitled to get the sum assured amount.
  • Maturity Benefit- There is no maturity benefit available under this policy.
  • Loan- No loan is permitted against this term policy.
  • Waiting period- In this term insurance policy there is a waiting period of only 45 days from the date of commencement of the risk. Here is a scenario to help you understand better:

Scenario 1- In case the policyholder dies during the 45 days waiting period:

  • In the event of accidental death of the insured life, the policy sum assured is payable in a lump sum to the beneficiary
  • In the event of non-accidental death, 100% ofDeath Benefit is payable, which is equal to all the premiums paid excluding the taxes, if any 

Scenario 2- In the event of the death of the insured after the completion of a 45 days waiting period from the policy inception date:

The policy sum assured is payable in lump sum to the nominee of the policy

For limited premium or regular premium payment policy, the selected Sum Assured is equal to “Sum Assured on Death” and is the highest of:

  • 10 times the annualized premium
  • 105% of all the premiums paid till the time of death
  • Absolute amount assured for the event of death

- For a single premium plan, the death benefit is higher of the following:

  • Absolute amount assured for death
  • 125% of the premium paid

Who Should buy Saral Jeevan Bima Insurance Policy?

So, the question is who should consider buying this standardized term insurance plan?

The answer is simple, people who could not issue a term plan earlier due to their occupation, educational qualifications, and geographical location not meeting the eligibility parameter of the insurance provider.

Earlier, self-employed people with a yearly income of around Rs 3 lakh to Rs 5 lakh were not able to get term insurance cover because they did not have any income proof.

Saral Jeevan Bima improves the chances of issuing a term insurance policy to this segment of society. Here the applicants also have the option of income surrogate where they can submit their vehicle’s Registration Certificate (RC) as a surrogate to their income proof.

Therefore, despite slightly higher premiums, the standardized term insurance cover is going to benefit a certain segment of the society. The policy issuance rate as per the experts is expected to rise by 70% in comparison to 30%. Traction around Saral Jeevan Bima is already visible around the self-employed people in the country.

Bottom-line

If you are someone who is looking for a simple term insurance plan to provide financial security to your family in case of any unforeseen event. If you want them to be financially stable even in your absence you want to get it right for the first-time itself, it makes sense to go with Saral Jeevan Bima. While the features of this term plan are similar across the industry you should also look at the insurer’s claim settlement ratio and the ease of policy purchase along with the renewal and after-sale services.

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