Ref: IRDAI/Life/Cir/Misc/254/10/2020
Date:14/10/2020
To All
Life Insurers,
Re: Guidelines
on Standard Individual Term Life Insurance Product, “Saral Jeevan Bima”
A:
Preamble:
It is observed that during the last few years,
there has been an increased customer preference towards 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 make 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, in exercise of powers under Section
34 (1) (a) of the Insurance Act, all Life Insurers are directed to offer the
following product mandatorily.
B. The Standard Term Life Insurance Product:
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 stated in the Annexure, 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 File and Use (F&U).
The policy document and the terms and conditions of the Standard Product shall
be in the format specified in Annexure -1 to this Circular.
C: Plan Features and Parameters:
|
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:
For
Single Premium: The Policy Cancellation Value acquires immediately after
receipt of Single Premium and is calculated as follows:
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:
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.
|
The
Insurer may suitably modify the definitions and other clauses of the policy
contract prospectively based on the regulations or guidelines that may be issued
by the Authority from time to time.
All
Life Insurers permitted to transact new business shall mandatorily offer the
standard product with effect from 1st January, 2021. The product may be filed
by the Insurers latest by 1st December, 2020. However, Insurers may file the
product earlier and offer the same on approval even before 1st January, 2021.
This
is issued with the approval of the Competent Authority.
Signed/-
Chief General Manager (Life)
Encl:
Annexure 1 – Policy Bond.