Document Detail

Title: Circular
Reference No.: IRDAI/Life/Cir/Misc/254/10/2020
Date: 15/10/2020
Guidelines on Standard Individual Term Life Insurance Product, “Saral Jeeva

Ref: IRDAI/Life/Cir/Misc/254/10/2020 Date:14/10/2020

To AllLife Insurers,

Re: Guidelineson 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 lifeinsurance products. In line with this growing demand, the Life Insurers havebeen introducing innovative protection products, with different features,options, riders, etc. .

 

There are many term products in the market withvarying terms and conditions. Customers who cannot devote adequate time andenergy 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 careof this situation and to make available a product by all Life Insurers thatwill broadly meet the needs of an average customer, it is felt necessary tointroduce a standard, individual term life insurance product, with simplefeatures and standard terms and conditions. Such a standard product will makeit easier for the customers to make an informed choice, enhance the trustbetween the Insurers and the insured, and reduce mis-selling as well aspotential disputes at the time of claim settlement.

 

Therefore, in exercise of powers under Section34 (1) (a) of the Insurance Act, all Life Insurers are directed to offer thefollowing product mandatorily.

 

B. The Standard Term Life Insurance Product:

 

1)   Thestandard individual term life insurance product shall be called, “Saral JeevanBima”; the Insurer’s name shall be prefixed to the product name.

 

2)   “SaralJeevan Bima” is a non-linked non-participating individual pure risk premiumlife insurance plan, which provides for payment of Sum Assured in lump sum tothe nominee in case of the Life Assured’s unfortunate death during the policyterm.

 

3)   Apartfrom the benefits and riders stated in the Annexure, no other riders / benefits/ options / variants shall be offered. There shall be no exclusions under theproduct other than the suicide exclusion.

4)   Theproduct shall be offered to individuals without restrictions on gender, placeof residence, travel, occupation or educational qualifications.

 

5)   TheInsurers shall have to file the product as per the above parameters and incompliance with the extant regulatory provisions through File and Use (F&U). The policy document and the terms and conditions of the Standard Product shallbe 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.

 

TheInsurer may suitably modify the definitions and other clauses of the policycontract prospectively based on the regulations or guidelines that may be issuedby the Authority from time to time.

AllLife Insurers permitted to transact new business shall mandatorily offer thestandard product with effect from 1st January, 2021. The product may be filedby the Insurers latest by 1st December, 2020. However, Insurers may file theproduct earlier and offer the same on approval even before 1st January, 2021.

Thisis issued with the approval of the Competent Authority.

 

Signed/-

Chief General Manager (Life)

 

Encl:Annexure 1 – Policy Bond.

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