The IRDAI has directed all life insurance companies to offer a standard term insurance plan - Saral Jeevan Bima - with effect from 1 January next year.
In its “Guidelines on Standard Individual Term Life Insurance Product, Saral Jeevan Bima” released last week, the IRDAI said, “It is observed that during the last few years, there has been increased customer preference for pure term life insurance products. In line with this growing demand, the life insurers have been introducing innovative protection products, with different features, options, riders, etc.
“There are many term products in the market with varying terms and conditions. Customers who cannot devote adequate time and energy to making informed choices find it difficult to select the right product. Also, products may not be available for the intended sum assured.
“To take care of this situation and to make available a product by all life insurers that will broadly meet the needs of an average customer, it is felt necessary to introduce a standard, individual term life insurance product, with simple features and standard terms and conditions. Such a standard product will make it easier for the customers to make an informed choice, enhance the trust between the Insurers and the insured, and reduce mis-selling as well as potential disputes at the time of claim settlement.”
Therefore, the IRDAI has made it mandatory for all life insurers to offer Saral Jeevan Bima, with several requirements as follows:
1) The standard individual term life insurance product shall be called, “Saral Jeevan Bima”; the Insurer’s name shall be prefixed to the product name.
2) “Saral Jeevan Bima” is a non-linked non-participating individual pure risk premium life insurance plan, which provides for payment of Sum Assured in lump sum to the nominee in case of the Life Assured’s unfortunate death during the policy term.
3) Apart from the benefits and riders set out in an Annexure released by the IRDAI, no other riders / benefits / options / variants shall be offered. There shall be no exclusions under the product other than the suicide exclusion.
4) The product shall be offered to individuals without restrictions on gender, place of residence, travel, occupation or educational qualifications.
5) The Insurers shall have to file the product as per the above parameters and in compliance with the extant regulatory provisions through the File and Use (F&U) approach.