Life insurers told to sell simplified individual term life insurance policies

HYDERABAD: To simplify individual term life insurance policies and reduce their mis-selling as well as potential disputes at the time of claim settlement, insurance regulator Insurance Regulatory and Development Authority of India (IRDAI), on Thursday issued guidelines for all life insurers to come up with standard products in this segment to be called -- Saral Jeevan Bima.

“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,” IRDAI said in its latest circular.

Insurance companies have been told to provide the policy with ‘Saral Jeevan Bima’ prefixed. This policy can be offered to all individuals in the 18-65 age bracket without any restrictions on gender, place of residence, occupation or educational qualifications.

As per the insurance regulator, only suicide will be excluded in this product. Its policy term can vary anywhere between five to 40 years, with the maturity age of the policy being 70 years with no maturity benefits. The sum assured can start with Rs 5 lakh and go upto Rs 25 lakh with multiple premium payment options such as regular premium payment, single payment or limited premium payment term for five years and 10 years.

The waiting period is 45 days and in case of revival of policy, the waiting period will not be applicable. As per the regulator, this policy will cover death due to accidents only during the waiting period of 45 days from the date of commencement of risk.

Besides, in case of death of the life assured during the waiting period, other than due to accident, an amount equal to 100% of all premiums received excluding taxes will be paid.

Source: The Times of India

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