A standardised term insurance policy ensures that policy features are the same and worded similarly, irrespective of which insurance company you buy it from
During these turbulent times of the COVID-19 pandemic, the importance of term insurance has been realised by people across the spectrum. That is why the search for “term insurance” on Google has jumped manifolds and has been in demand all through the pandemic.
And, cleaving through these tough times, the insurance sector also witnessed a wave of positive changes ranging from launching new products to simplification of the process. By launching brand new products like Corona Kavach, Corona Rakshak, and Arogya Sanjeevani, the insurance regulator, Insurance Regulatory and Development Authority of India (IRDAI) made sure that buying and understanding the terms of policies should no longer remain a daunting task.
Treading the same path, with the intent of simplifying the process and bringing more people under the coverage of insurance, IRDAI has come out with a standardised term insurance policy “Saral Jeevan Bima” which will be rolled out from January 1, 2021.
This standardised policy will have a standard wording for sum assured with uniform features that will reduce the hassle of first-time buyers. This standard term plan will be available for buyers between 18 and 65 years of age. The maximum age at maturity is 70 years, which implies that when the person reaches that age, the plan will automatically terminate. The policy term can be between five and 40 years. This will be having a minimum and maximum sum assured of Rs 5 Lakh and Rs 25 Lakh, respectively.
But, let us delve deeper to know how and why you should go for it.
Unlike other term plans offered by insurers, having different exclusions and conditions, this standardised product will have uniform features irrespective of the insurers. So standardisation, uniform wording, and uniform features will make it an easier buy for people cutting across class and all sections.
With relatively complex life insurance products available in the market, a “Saral” term insurance product – Saral Jeevan Bima – is a blessing for first-time buyers and people who do not have much knowledge of term insurance but wish to secure their life. Uniformity and standardisation will reduce the hassle associated with buying any policy and will leave no room for disputes in the future.
Giving an impetus to contactless and safe transactions digitally, this standardised product will be actively available on digital platforms. The availability of this plan on digital platforms will offer more transparency and will lead to no ambiguity.
Most importantly, customers can avail a discount of up to 20 percent on the premiums when buying the plan online. Now, comparing premiums across the insurers, and buying the cheapest policy for you will be just a few clicks away. Just at the comfort of your home, you can gather all critical information, compare premiums, and buy this product. So no more hassle to turn to an agent to get all the information.
Your income level will not be barrier to buy this policyUnlike other term plans which consider your annual income as a fundamental premise to decide the amount of the sum assured, this term insurance plan allows you to buy the sum assured as per your wish without taking into consideration your annual income
The product is nothing short of a blessing for people with irregular income or people who do not have sufficient income proofs.
You can buy the plan up to a sum assured for which you think you can easily pay the premium. Thus, this new offering is of great benefit for the people belonging to lower-income groups, people from rural backgrounds who were earlier not covered under any policy.
The plan majorly targets people from economically weaker section of the society who are in an equal need of getting insured under a term cover to protect their dependents from financial crises. Often it is observed that in families from lower-income group, there is just one bread-winner who takes care of all the financial needs of the family.
In such a scenario, it is very important to cover the bread-winner under a term plan because if anything unfortunate happens to him/her, there would be enough financial aid to care of the needs of the dependents.
What to look for while buying this policy?
Since the product is going to be launched very soon, policy buyers should know what are the various things one should look at. As it goes that buying insurance is one thing and getting your claim settlement is another. So essentially if you are going to buy this product, apart from comparing the premium, the policy buyer should also look at the solvency ratio and the claim settlement ratio of the company.
The solvency ratio of an insurer shows the health of the company and its ability to meet its obligations. But, this cannot be looked at in isolation. The claim settlement ratio is the percentage of claims paid out of the total claims received. Generally, a higher claim settlement ratio signifies the convenience of getting your claim processed. Now, as this plan is just a few days away from being launched, have a look at the aforementioned parameters and prepare for buying this brand new product.