Saral Jeevan Bima Yojana: Importance, Eligibility & Key Features

Importance of Saral Jeevan Bima Yojana in Today’s Time

What do you mean by Saral Jeevan Bima Yojna?

The Saral Jeevan Bima Yojana is a standardized term life insurance plan which came into existence after suggestions by the Insurance Regulatory and Development Authority of India (IRDAI) with a standard set of terms and simplified eligibility conditions. In a bid to make life insurance available to the masses, the IRDAI has mandated all life insurers to add this product to their existing portfolio and start offering it to its customers, in its true sense.

Praveen Kumar, aged 28 years, is a tourist guide in Agra. With just a graduation degree, Praveen is a native of Bangalore, but he migrated to Agra in search of job opportunities and ended up as a guide for tourists who come to visit the city. He is making good money nowadays, wishes to get married and settle down in Agra along with his parents. Still, he is scared of whether he would be able to provide enough for everyone in the family in case anything unfortunate happens to him in the future. 

Praveen came to know about term insurance policies by a tourist visitor, which will help his family after his time, but unfortunately, he could not buy it too as all insurers demanded income, education, and residence proofs. This fear has stopped him from getting into life’s commitments for a long time. Feeling dejected, he contacted the same tourist hoping to get some guidance, and this time, he indeed got the answer in the form of Saral Jeevan Bima. The tourist, an employee with a popular insurance firm, explained the benefits of this new policy and how he could purchase it without any complications. Praveen is a happy man now living with his parents and wife in Agra after taking the Saral Jeevan Bima plan for a sum assured of Rs 20 lakhs.

Term insurance policy is the traditional form of life insurance that provides financial benefits to the dependents of the insured person against the uncertainties of life such as death. The sum assured is paid in a lump sum to the family members of the policyholder in case of him/her death, thereby enabling them to handle the financial commitments of life. Though there are multiple types of insurance policies, term plans give high coverage at affordable premiums, which is why investment experts suggest buying a term policy as the first step towards financial planning.

With so many benefits being talked about in the term insurance policies, India is still underinsured. The life insurance adoption penetration in India was 2.82 percent as of 2019, which is very low compared to the global average. One of the primary reasons behind these low numbers is people’s mindset of chasing returns from life insurance products. The very thought of paying a premium for a term insurance policy that won’t give any return makes it unattractive for them. 

Also, there is other documentation, such as education proof, income proof, residence proof, etc., required to be provided when applying for a policy, which people of the unorganized sector do not possess, thereby leaving them out of the insurance bracket.

How is Saral Jeevan Bima different?

The Saral Jeevan Bima is a standard term life insurance policy without any complex terms and conditions and will be available with all life insurance companies. Anyone can buy the plan without any requirement of educational, income, or residency proof, which is a huge plus for people who don’t belong to the organized workforce. Since the insurance body has prescribed all the insurers to follow the same features for Saral Bima Yojanait shall help in buying without confusion. 

Saral Jeevan Bima Eligibility Criteria:

Eligibility Criteria Minimum Maximum
Entry Age 18 Years 65 Years
Policy Term 5 Years 40 Years
Maturity Age 70 Years
Sum Assured ₹5 Lacs ₹25Lacs* (Sum assured would be permitted in the multiple of ₹50,000) *The insurers have the alternative of offering the sum assured beyond ₹25 lakh within Saral Jeevan Bima with the other terms and conditions will remain the same

Like all the other term plans, the Saral Jeevan Bima policy will also pay the assured coverage amount to the family members in case of any unfortunate event such as the policyholder’s death during the policy term. The other features are listed below:

Saral Jeevan Bima Policy Features:

  • Age: Minimum of 18 years and maximum of 65 years
  • The maximum maturity age is fixed at 70 years
  • Choose a policy tenure ranging from 5 to 40 years
  • The minimum sum assured is Rs 5 lakhs, and the maximum is 25 lakhs 
  • Three payment options to choose from Regular, Limited premium payment terms for five years and ten years, Single premium.
  • Mode of payment: Single lumpsum premium, Monthly, Yearly, and half-yearly
  • There is a minimum waiting period of 45 days from the risk commencement date
  • No loan shall be sanctioned against the policy
  • There is no maturity benefit for this policy

The features mentioned above are fixed as per the guidelines given by the IRDA and remain the same, even if the plan is purchased from any insurance provider. This is done to ensure customers are not getting confused about what they are getting in a term insurance policy and will help more people look at insurance as a tool to secure their family’s financial condition during tough times.

Where to buy it? 

This plan is available with all insurance companies in India. IRDAI has allowed the companies to prefix their brand name before the plan, such as LIC Saral Jeevan Bima policySBI Saral Jeevan Bima policy, HDFC Life Saral Jeevan Bima policy, etc.

You may even visit the insurance provider’s official website and know more about the steps to buy this term plan from their branch offices. You can also use the Saral Jeevan Bima premium calculator that will specifically tell the amount of premium required to pay for a specific coverage value. For example, as per theLIC Saral Jeevan Bima premium calculator on the LIC website, the yearly premium for a 25-year-old male (non-smoker), sum assured of 5 lakhs, and policy term of 30 years, is Rs 2600.

The Saral Jeevan Bima plan is the right step by the government and IRDA to bring the unorganized population into the insurance fold. With uncertainties such as the COVID-19 pandemic ahead, people have also understood the need to have a term insurance policy in their portfolio to help their families tide over the financial crisis. With standard terms and conditions across all insurance companies, the complaint of misselling of insurance policies could also get reduced. Hence it is a welcome move to increase the insurance penetration in India, but this movement will triumph only if more people become aware of these plans.

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