It will be mandatory for all insurance companies to provide this insurance. The regulator has clearly defined this policy.
SJBP: Buying a term plan i.e. life insurance should be the first step in any financial plan. The Insurance Regulatory Development Authority of India (IRDA) has now made it mandatory for insurance companies to issue standard term life insurance policies.
According to the IRDA’s October 2020 directive, this product will have to be made available to all insurance companies with the name Saral Life Insurance Policy (SJBP) with their name. It will be mandatory for all insurance companies to provide this insurance. The regulator has clearly defined this policy.
However, the regulator has left the responsibility of fixing the premium, ie the price of the policy, to the insurance companies. Companies will decide the premium on the basis of age, sum assured and other parameters. This product is for all those who want to take a term plan for protection against any kind of risk.
Why Saral Life Insurance Policy (SJBP)?
There are many types of term life insurance available in the market. Each life insurance has its own distinct benefits – term of premium, death claim settlement, policy term, benefits like return of premium on maturity. Because of all this, it becomes almost impossible to compare. SJBP is a pure risk term life insurance product that is built on a benchmarked basis which will make it easy for investors to compare and choose the right policy according to their needs.
Policybazaar.com – Santosh Agarwal, CBO, Life Insurance says, “This product is great for first time term life insurance buyers as the plan will be common across all insurance companies. It is a one-stop-solution for first time term life insurance buyers. Also, those who have little knowledge of term life insurance are often unable to choose the right product for the financial security of their families. The introduction of Saral Life Insurance Policy (SJBP) is like a revolution in the life insurance industry as more and more people will now join the insurance cover.”
Working by yourself is beneficial
For many such people in the lower income category who do self-employed work, it will be easy for them to take term insurance protection for the family through SJBP. According to Santosh Aggarwal, “Earlier such self-employed people whose annual income is 3 to 5 lakhs, they could not buy term insurance due to lack of income proof. Now with the coming of SJBP, such a class will have the possibility of getting insurance. There will be a provision of surrogate income in SJBP in which you will be able to submit the RC of your car or two-wheeler as a surrogate of your income. Work is going in the right direction.” He expects that 70 percent of the people in this category can take insurance, whereas earlier it was only 30 percent.
At the same time, it can prove to be the right product for first time insurance buyers and small borrowers. If you live in the city and want to take a home loan, then according to your responsibilities, this would be the right product for you in any situation.
Take care of limits
No investment is part of this product. This ensures that the insurance companies charge less as is the case with other term life insurance plans. Since it is a standardized product, insurance companies can offer it at an attractive rate to attract more buyers.
Those who want more sum assured will have the option of other term life insurance.
SJBP also includes accident benefit and permanent disability benefit. However, there is no option to provide Critical Illness cover as a rider in the policy.
Santosh Aggarwal says, “A separate critical illness policy can be taken with a term plan or health insurance plan. There are a lot of uncertainties in life and sometimes illness can come and spoil your health and financial health. Critical illness cover includes lump sum benefit, medical expenses or recovery related expenses in case of a specific illness.
SJBP has a waiting period of 45 days from the date of issue of the policy. During this period only death claim will be given in case of accident.
Insurance buyers should decide to take a policy keeping all these limitations in mind.
