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After giving directions to launch uniform basic health insurance plan called ‘Arogya Sanjeevani’, Insurance Regulatory and Development Authority of India (IRDAI) has now asked all insurance companies to roll out Uniform Life Policy. All insurers were directed to come with a standard plan for life insurance called as ‘Saral Bima Yojana’ starting from Jan 1, 2021.
Saral Bima Yojana:
The product will have same features, benefits, inclusions as well as exclusions across different insurance companies. The policy will be available for age group of 18 to 65 years with a policy term of 5 years to 40 years, with a maximum maturity age of 70 years. Also sum assured can vary from Rs.5 lakhs to 25 lakhs based upon the premium amount.
There are many term plans present in the market. But each plan comes with different features, benefits, terms and conditions, which makes it difficult for common man to choose the right plan. Having standard plan will make the selection easier as well as it will increase the awareness about the life insurance product among larger masses.
Main feature of ‘Saral Bima Yojana’ is its simplicity. This policy will have no exclusions other than the suicide clause.
Last year IRDAI also mandated all insurance companies to come up with a basic health insurance plan with coverage up to Rs.5 lakh, mostly targeted for first time health insurance buyers. Later during pandemic, regulator also asked insurers to roll out Corona Kavach and Corona Rakshak policies.
COVID related standard insurance plans:
Corona Kavach, which is an indemnity plan and covers all the hospitalisation expenses up to sum insured that arise from novel coronavirus. Sum insured could be from Rs.50000 to Rs.5 lakh. On the other hand, Corona Rakshak is a fixed benefit plan. Under this plan, if a person diagnosed with COVID-19 and hospitalised for at least 3 days, then a fixed amount will be paid to that person by insurance companies. Sum insured under this policy could vary from Rs.50000 to Rs.2.5 lakh. Both of these Corona policies could be renewed for further term of 3.5 months, 6.5 months and 9.5 months till 31st March, 2021. Moreover, Corona Kavach (individual) policies have option of portability from one insurer to other.
Plan features and parameters of ‘Saral Bima Yojana’ as per IRDAI’s circular:
| Sl. No. | Particulars | Norms |
| 1 | Minimum Age at Entry | 18 Years |
| 2 | Maximum Age at Entry | 65 Years |
| 3 | Policy Term | 5 to 40 years |
| 4 | Maximum Maturity Age | 70 years |
| 5 | Sum Assured | Minimum ₹5,00,000; Maximum ₹25,00,000* (SA would be allowed only in the multiple of ₹50,000) *Insurers have the option of offering Sum Assured beyond ₹ 25,00,000 under Saral Jeevan Bima with all other terms and conditions remaining the same. |
| 6 | Large Sum Assured rebate | If any, it shall be clearly indicated in F&U |
| 7 | Premium Payment Options | i) Regular Premium; ii) Limited Premium Payment Term for 5 years and 10 years; iii) Single Premium |
| 8 | Mode of Premium Payment | Regular and Limited Premium Payment Options: – Yearly; Half Yearly; – Monthly (only under ECS / NACH) Single Premium: In Lump sum. |
| 9 | Death Benefit | For Regular & Limited Premium Payment policies: Highest of: – 10 times of annualized premium; – 105% of all the premiums paid as on the date of death; – Absolute amount assured to be paid on death. For Single premium policies: Higher of: – 125% of single premium; – absolute amount assured to be paid on death. |
| 10 | Maturity Benefit | There shall be no maturity benefit under the policy. |
| 11 | Exclusions | Only suicide clause, as per extant regulations. |
| 12 | Waiting period | 45 days from the date of commencement of risk. In case of revival of Policy, the Waiting Period shall not be applicable. The following words shall be prominently displayed in BOLD, on the welcome letter of Policy Document as well as on the first page of Sales Literature. “This Policy will cover death due to accident only during the waiting period of 45 days from the date of commencement of risk. In case of death of the life assured other than due to accident during the waiting period, an amount equal to 100% of all premiums received excluding taxes, if any, shall be paid and the Sum Assured shall not be paid.” |
| 13 | Surrender Value | Surrender Value is not applicable under this Policy. |
| 14 | Policy Cancellation Value | Policy Cancellation Value shall be payable: – upon the Policyholder applying for the same before the stipulated date of maturity in case of Single Premium Policy; – upon the Policyholder applying for the same before the stipulated date of maturity or at the end of revival period if the policy is not revived, in case of Limited Premium Payment Policies. The amount payable shall be as follows: = 70% * Single Premium paid * (unexpired policy term/original policy term) Single Premium shall be inclusive of extra premium, if any. Limited Premium Payment Term (LPPT): 5 and 10 years: Policy Cancellation Value acquires if at least two (2) consecutive full years’ premiums are paid and is calculated as follows: = 70% * Total Premiums paid * (unexpired policy term/original policy term) Total Premiums Paid shall be inclusive of extra premiums, if any. No policy cancellation value shall be payable in respect of regular premium policies. |
| 15 | Loan | No loan will be allowed against the policy |
| 16 | Optional Riders | Approved Accident Benefit and Permanent Disability Benefit Riders can be attached. |
| 17 | Pricing | As per the F&U |
| 18 | Underwriting and Medical Requirements | As per the Board Approved Underwriting Policy of the Insurer, subject to above criteria and any statutory requirements. |
| 19 | Interest on delayed payment of premiums | The rate of interest on delayed payment of premiums shall be as per the Insurer’s policy for similar products. |
Regards,
StockTradingF&O team
Disclaimer: This information is only for educational purposes. Please consult your own financial advisor before investing.
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