Insurance Regulatory and Development Authority of India (IRDAI) has brought a standardized term insurance policy “simple life insurance”. This standardized policy has a standardized terminology for sum-insured with similar features, which will ease the hassle of those purchasing insurance policies for the first time. This standardized term plan is available to buyers between 18 and 65 years of age. The maximum age of maturity is 70 years, which means that the policy will automatically end when the person reaches that age. The term of the policy can be between five and 40 years. This will be the minimum and maximum sum assured amount of Rs 5 lakh and 25 lakh respectively.
Will cover people with irregular income
Other term plans consider your annual income as the basic basis for fixing the sum insured, on the contrary, this term insurance plan allows you to buy the sum assured as you wish, irrespective of your annual income.
It is not required to present proof of income to purchase a simple life insurance plan as the insurer will issue the policy without taking into consideration your financial condition. This product will be beneficial for people with irregular income or those who do not have sufficient proof of income. A person can buy a plan for which it will be easy for him/her to pay the insurance amount. Thus this new offering is of great benefit to people from low-income groups, rural backgrounds who have not been previously included in any policy.
This plan primarily targets people from the economically weaker section of the society who need to be insured under term cover to protect their dependents from the financial crisis. It has often been observed that only one person earns in low-income families and that he/she meets all the financial needs of the family. In such a situation is very important for that earning person to cover under the term plan because if something unfortunate happens to the person, there will be sufficient financial support to take care of the needs of the dependents.
Talking about the benefits of simple life insurance, Santosh Aggarwal, Chief Business Officer, Life Insurance, Policybazaar.com, said, “Earlier, self-employed people with an annual income of 3-5 lakh were not able to get term insurance due to non-availability of income proof. Now that simple life insurance plans have been launched, this segment has the opportunity to issue a term insurance policy. Simple Life Insurance offers an option of income surrogate where you can submit your car or two-wheeler RC as your income certificate as proof of your income. Progress is going in the right direction in this regard, we expect the insurance issuance rate in this segment to go up to 70% which was earlier only 30%. However, it will take time to see some trends; So far, we have seen a fascination for this plan only among the self-employed who are opting for simple life insurance. ”
Available in digital form
This standardized product will be available on digital platforms to encourage contactless and secure transactions. The availability of this scheme on digital platforms will bring more transparency and will not create any ambiguity. The most important thing is that customers can avail up to 20% discount on premium when purchasing online plan. Now, comparing premiums for insurers and buying the cheapest policy for yourself will be just a few clicks away. From the comfort of sitting at home, you can gather all important information, compare premium and buy this product. An agent will also get rid of the hassle of searching for all the information.