People across the world are facing hard times., as the Corona virus (COVID-19) pandemic has hampered their finances and well-being. With lakhs of deaths in India due to COVID-19, people have realized the need to have a health and life insurance plan. The cost of hospitalization and medical facilities can create a hole in your pocket. Health insurance can protect you from such high expenses. Besides this, life insurance provides life cover and the much-needed financial protection to your family against life’s uncertainties. If you are considering buying life insurance, then it is advisable to opt for a term insurance plan. If you are not sure about what is term plan and why it is so popular, then read on.
A term plan is purely a protection plan that safeguards the family’s financial future in your absence. One of the significant advantages of investing in a term insurance plan is that it offers a high sumassured at an affordable premium. The term insurance premiumis the lowest when compared to any other life insurance plan. People fear for their lives today, as they are worried about how their family will meet their financial needs and who will look after them. So, to ease people’s anxiety, the Insurance Regulatory and Development Authority of India (IRDAI) has come up with a standardized term policy named ‘SaralJeevanBima’ that will be effective from December 31, 2020. The purpose of coming up with such a policy is to help people select a better insurance policy. This policy is for every customer and not only for those who can afford to pay a high premium rate. The objective of this plan is to help the common man reap the benefits of a life insurance policy.
Features of theSaralJeevanBima Policy
In India, there are millions of people who cannot afford to buy a life insurance plan.Keeping this in mind, the IRDAI has an insurance plan that every Indian with any economic condition can afford.
Here are some offerings of the new standardized term policy:
- You should be above 18 years of age, whereas the maximum age limit is capped at 65 years
- Its tenure will range from four to 50 years
- It will cover any type of death except for suicide
- Its sum assured will be between INR 5 lakh to INR 25 lakh
- Your nominee will receive thedeath benefit in one-time if anything unfortunate happens to you within the tenure of the policy.
- You cannot take any loan against this policy and cannot avail of any maturity benefits.
- This standardized term policy provides three payment options, which include single premium, limited premium (here the policyholder can pay a premium for five or ten years together), or the standard regular premium.
Death benefits of SaralJeevanBima Policy
- In the case of the policyholder’s death, the insurer will have to pay an absolute premium for all three payment options, which are regular, single, and limited premium
- In the case of regular and limited premium, the insurer will provide 105% of the total premium paid until the policyholder’s death. Whereas, in the case of a single premium, the insurer will have to pay 125% of the total premium paid until the policyholder’s death
- It is a pure protection plan, so there are no maturity benefits.
- It will also offer riders like accidental death and permanent disability
The bottom line
Many people cannot even afford the low term insurance premium; therefore, IRDAI came with a new standardized term plan, ‘SaralJeevanBima’, to make it affordable for people with any economic background.