What is the Saral Jeevan Bima Policy? | Personal Finance News

What is the Saral Jeevan Bima Policy? | Personal Finance News


In the past few years, there has been an increasing need for simple and affordable life insurance plans, especially for the average working Indian. Despite the plethora of affordable life insurance plans, including term insurance, a need for a standardized and low-cost term insurance plan was felt.

Hearing the unanimous pleas of Indian citizens, the government, through the Insurance Regulatory and Development Authority of India (IRDAI), passed a directive stating that all insurance companies must offer a standard and cheap term plan. This term plan called the Saral Jeevan Bima is on the lines of the standard health insurance policy – the Arogya Sanjeevani Policy. It shares similar features across all insurers and aims to make low-cost term insurance a widespread reality.

But wait – what does a term policy entail? Find out below:

What is a term policy?

A term life insurance policy is a simple form of life insurance that protects the loved ones of the earning member/breadwinner in his/her absence. Generally, the entire family is dependent on the earning member to provide for their day-to-day needs. But what happens when the breadwinner is not around to take care of his/her family? At such times, he/she has the choice of getting term insurance to provide financial support to his/her family members. This financial support is in the form of a monetary benefit, called a death benefit, that is given to his/her family. In insurance terms, the breadwinner is called the policyholder, and his/her family members become the beneficiaries/nominees. All the policyholder has to do is pay a limited sum, called a premium, every month, half-year, or year to receive the benefits under the term insurance plan.

What is the benefit of a simple term plan?

The main benefit of a simple term plan is that it ensures your near and dear ones stay protected at all times. They do not have to rely on other sources or take on loans to make ends meet or fulfil their dreams. With the payout given on your unfortunate demise, they can lead a stress-free and relaxed life without compromising on their needs. Moreover, the premiums are nominal and affordable, and the policyholder has the choice to pay them at one time or through regular instalments, according to his income flow and comfort. Apart from providing the death benefit, term insurance plans also give some added benefits that protect the policyholder and his/her family in the face of a life-threatening illness, disability, accident and other unforeseen contingencies.

Features and benefits of the cheapest term insurance plan – the Saral Jeevan Bima?

As mentioned above, the Saral Jeevan Bima is a standard and low-cost term insurance plan available to all sectors of Indian society, regardless of age, gender, profession, location, and educational qualifications. Moreover, as its features are similar across different insurers, you can easily buy the policy without spending too much time and effort. Its features include:

· Benefit amounts i.e. the sum assured between ₹5,00,000 – ₹25,00,000

· Policy term of 5-40 years

· 3 premium payment options:

o One-time/ single premium payment

o Regular premium payment in monthly, half-yearly or yearly instalments

o Limited premium payment for 5 or 10 years in monthly, half-yearly or yearly instalments

· Death benefit payout for the single premium payment mode will be 125% of the annual premiums paid

· Death benefit payout for the regular and limited premium payment modes will be 105% of the annual premiums paid

· Two optional riders (added benefits) on paying additional premiums –

o Accidental death benefit rider

o A permanent and total disability rider

Anyone between the ages of 18 years to 65 years can buy this affordable term plan.

How do I choose the best term insurance policy?

The features of a term policy are straightforward and easy to understand. However, you should not rush into buying one without a thorough read of the term insurance policy’s terms and conditions and without assessing your financial needs and requirements.

Here is how you can choose the best term life insurance policy:

1. Calculate the number of dependents (family members) you have who will require financial support from the term insurance policy.

2. Factor in your family’s personal and financial needs such as:

· Day-to-day expenses and lifestyle needs.

· Monthly/ annual bills such as utility bills, grocery bills, etc.

· Goals such as education, business, marriage, vacations, etc.

· Medical and healthcare needs

3. Factor in your own needs and liabilities such as:

· Loans/ debts for a home, car, or business

· Post-retirement needs

· Healthcare needs

4. Consider your financial capacity to pay the premiums and buy the term insurance policy. Take into account your monthly/annual income and how much you can set aside for the policy.

5. Once you have analyzed your and your family’s needs, proceed to your insurer of choice. Check the insurer’s reliability and the quality of services offered. You can check their claim settlement ratio (that are the number of claims settled by them in a year) to confirm its trustworthiness. Check for customer testimonials and take the advice of a professional expert, if necessary.

6. Compare the different term insurance plans offered by the insurer to find the one aligned with your needs and giving you maximum benefits, coverage, and riders.

7. Use a term insurance calculator to get a clear idea of how much coverage you can get and the number of premiums you have to pay for different policies.

8. Select the policy as per your preferences and proceed to buy.

To conclude:

There are plenty of affordable and cheap term plans, those that can fit into your budget and give you the desired protection you are looking for. Different insurers offer term insurance policies at competitive rates.

(Disclaimer: This is a Brand Desk content)


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