Why the New Standardized Term Policy is Perfect for First-Time Buyers

The Coronavirus (COVID-19) pandemic has made people realize that life is uncertain. People have understood…

Term Insurance Comparison - Key to Finding the Best Coverage - ABC of Money

The Coronavirus (COVID-19) pandemic has made people realize that life is uncertain. People have understood the need for life insurance, as it can safeguard the family’s economic future. Various types of life insurance policies are available in the market. However, term insurance plans are among the most popular policies. Given the current situation, what is term insurance maybe one of the most searched questions on search engines today. Well, let us explain it to you in a simple way. 

A term insurance plan is the purest type of life insurance policy that offers a high sum assured at an economical rate. Due to COVID-19, many insurers have come up with insurance plans like Corona Rakshak and Corona Kavach. The Insurance Regulatory and Development Authority of India (IRDAI) wants to simplify the process of applying for a new life insurance policy and understanding its various features. In line with this endeavor, the IRDAI has introduced a new insurance policy, known as the ‘Saral Jeevan Bima Yojana’, on January 1, 2021. 

The purpose of introducing this term insurance plan in India is to make more people purchase it. So, the IRDAI has come up with this standardized insurance plan, wherein all insurers will have to follow the prescribed rules and guidelines. If you are eager to know about the features, eligibility criteria, and tenure, among other aspects of the ‘Saral Jeevan Bima Yojana’, read on. 

What is the new standardized term policy?

The new standardized term insurance policy is a simple type of life insurance plan that ensures fixed death benefits to the nominee upon the demise of the policyholder. 

Why is it perfect for first-time buyers?

The terms of the Saral Jeevan Bima policy are easy to understand and have standardized wordings. It is simple for first-time policyholders to avail of this plan, as all the insurance companies in India will have to sell this product as per the guidelines of the IRDAI. 

What are the features of the new standardized term policy?

Individuals from the age group of 18-65 can buy this plan for a tenure ranging from five to 40 years. The maximum age at maturity is 70. So, if the policyholder reaches this age, the policy will terminate automatically. The minimum and maximum sum assured of this policy are INR 5 lakh and INR 25 lakh, respectively. While buying this policy you have the choice to select the frequency of the premium payment. You can pay the premium as a one-time lump-sum, choose the regular premium payment alternative, or opt for the limited payment option, where you can pay the premiums for five to 10 years.  

Benefits of standardization

By standardizing the term insurance policy, all policyholders will have access to the same features. Therefore, people from all classes and varied financial backgrounds can invest in this plan, as it is easier to understand the uniform features compared to the other insurance policies. Additionally, it is convenient to purchase this plan, as it is available on various online platforms. The best thing about buying this policy online is that you can reap an approximate discount of 20% on the premium. With the Saral Jeevan Bima Yojana plan, you can choose additional riders like accidental benefits and permanent disability to widen the scope of your policy. 

To sum it up 

The uniformity in wordings, features, and other terms and conditions have made it possible for the first-timers to understand the various aspects of the Saral Jeevan Bima Yojana policy and invest in it easily. The IRDAI’s objective behind launching this policy is to make term insurance available and accessible to all sections of society. So, if you do not have any term plan, invest in the Saral Jeevan Bima Yojana policy at the earliest.