Insurance companies to offer a standard term life insurance from January 1
Standard Term life insurance companies to file the product with the IRDAI latest by December 31 this year.
IRDAI, in October had direct all the life insurance companies to mandatorily come out with a standard.
Individual term life insurance policy called ‘Saral Jeevan Bima’ from January 1, 2021.
Insurance companies will start to offer the standard term life insurance in the new year.
IRDAI had asked all the life insurance companies to file the product with the IRDAI latest by December 31 this year.
“There are many term products in the market with varying terms & conditions.
Customers who cannot devote adequate time & energy to make inform choices find it difficult to select the right product.
Individual life insurance product with simple features & standard terms & conditions, date October 14, 2020.
What is Saral Jeevan Bima Policy?
Saral Jeevan Bima will be an individual pure risk premium life insurance policy which will pay the sum assured in lump sum to the nominee.
There will be only one exclusion under the policy exclusion for suicide’.
Saral Jeevan Bima policy like optional Accident Benefit & Permanent Disability Rider.
Standard term life insurance will mandatorily offer a sum assured between ₹5 lakh and ₹25 lakh.
IRDAI however allows life insurance companies to offer a higher sum assured as per their discretion, without changing any conditions.
Minimum entry age is 18 years and maximum age like 65 years so policy term will be 5 to 40 years.
Saral Jeevan Bima will allow a maximum maturity age of 70 years.
Premium payment options
Saral Jeevan Bima policy will provide three premium payment options regular premium.
Limited premium payment term for 5 years and 10 years and single premium.
Individuals will be allowed to choose from regular premium payment throughout the policy term.
Single premium payment in lumpsum or limited premium payment (5, 10 years) options.
For regular and limited premium payment policies, the death benefit will be, highest of – 10 times of annualize premium or, 1-5% of all premiums paid as on the date of death , or an absolute amount assured to be paid on death.
For single premium policies, the death benefit will be higher of – 125% of single premium , or absolute amount assured to be paid on death.
Since it is a pure term life insurance plan, there is no maturity benefit.
Waiting period of 45 days from the commencement of the policy will be there.
During these 45 days, the policy will only cover death due to an accident.
Standard Term Life Insurance Product – Guidelines
1. The standard individual term life insurance product shall be call, “Saral Jeevan Bima”; the Insurer’s name shall be prefix to the product name.
2. “Saral Jeevan Bima” is a non-linked non-participating individual pure risk premium life insurance plan.
Which provides for payment of Sum Assured in lump sum to the nominee in case of the Life Assured’s unfortunate death during the policy term.
3. Apart from the benefits & riders state in the Annexure, no other riders / benefits / options / variants shall be offer.
There shall be no exclusions under the product other than the suicide exclusion.
4. The product shall be offer to individuals without restrictions on gender, place of residence,
5. Death Benefit: For Regular & Limited Premium Payment policies: Highest of:
– 10 times of annualize premium;
– 105% of all the premiums paid as on the date of death;
For Single premium policies: Higher of:
– 125% of single premium;
– absolute amount assure to be paid on death.