LIC Saral Jeevan Bima – Positive and Negative Factors
Recently LIC has launched Saral Jeevan Bima, which is a standard term insurance plan that covers basic term plan features and starts with low sum assured of 5 Lakhs. This plan is launched based on IRDA guidelines about launching standard term plan which would have common features. There is mixed reaction about this plan. Some say, good plan, some comment, less features. What are the Positive Features in LIC Saral Jeevan Bima? What are some of the negative and hidden factors which you should be aware before opting for Saral Jeevan Bima LIC, a standard term insurance plan?
Overview about LIC Saral Jeevan Bima – Standard Term plan
Earlier Max Life has launched Saral Jeevan Bima. Now LIC has launched LIC Saral Jeevan Bima, a simple and standard term insurance plan has pure risk coverage. LIC Saral Jeevan Bima Plan 859 provides pure risk coverage without any restrictions on providing documentations while taking the plan.
Now let us look at the positive features and negative factors in the Saral Jeevan Bima Plan of LIC.
LIC Saral Jeevan Bima – What are the Positive Features?
Here are major positive features of this term plan.
1) Simple Term Plan
This is a simple term plan without complicating with any T&C. LIC Saral Jeevan Bima Plan provides pure risk coverage. In case of death of the policy holder, the nominee would get sum assured on death.
2) Sum Assured as low as 5 Lakhs
Generally term plans start from Rs 25 Lakhs sum assured onwards. However, this standard term plan comes with a low sum assured. LIC Saral Jeevan Bima sum assured is 5 Lakhs to 25 Lakhs. Means even a low income earner can take this term plan based on their need.
3) No documents to be provided
Generally to issue a term plan, the insurance company keeps asking for income proofs and educational proofs. However to take this term plan, one need not submit any educational or income proofs.
4) Premium payment Term
There is a flexible premium payment term of 5 years to 40 years. One can consider flexible payment options based on their convenience.
5) Age of entry – 18 years to 65 years
One can consider this term plan who is in the age group of 18 years and up to 65 years of age.
6) Coverage up to 70 years
Saral Jeevan Bima plan from LIC would have risk coverage of insurance up to 70 years of age.
7) Options in premium payment
This insurance plan also comes with 3 types of premium payment variants. One can consider the single premium option, limited premium payment option and regular premium payment option.
Under a single premium plan, policy holder would pay the premium only once (single) and have the risk coverage till the tenure of the policy e.g. 30 years or 40 years.
In limited premium option, individuals can pay premium for 5 years or 10 years, but have the life risk coverage till the entire tenure of the policy. E.g. 30 years or 40 years, depending on the option chosen by the policyholder.
Under the regular premium plan, one can pay premium either by monthly, quarterly, half yearly or yearly.
8) Death Benefit
In case of death during the policy tenure, the nominee would get death benefit which is equivalent to sum assured on death. However, if death happens within 45 days from the date of the policy, only premiums paid would be returned by LIC.
9) Rebate of High Sum Assured
LIC provides rebate (discount) on insurance premiums for a high sum assured of more than Rs 9.5 Lakhs. This rebate ranges between 0.1% to 0.25% of basic sum assured. Here is the chart of high sum assured rebate based on the sum assured.
<< Chart >>
10) Rebate for online purchase of policy
LIC provides rebates (discounts) on insurance premium for online purchase of this plan. Such rebate is between 2% to 7%. Here is the chart showing the rebate based on the basic sum assured.
11) Income Tax Benefits
Insurance premiums paid for this term plan would qualify for income tax rebate u/s 80c of income tax act, up to Rs 1.5 Lakhs during the financial year.
LIC Saral Jeevan Bima – What are the Negative Factors?
Here are some of the negative or less known factors.
1) No Riders
This is a simple term plan that does not have riders. There are several term insurance plans that comes with critical illness riders (e.g. ICICI iSmart Term Plan or HDFC Click 2 Protect 3D Plus).
2) Death within 45 days
If the policy holder dies within 45 days (due to other than accident), the nominee would get a refund of premiums only. This is similar to the waiting period in health insurance plans or life insurance plans to get risk coverage.
3) Coverage up to 70 years only
If there are any dependents (e.g. Spouse), one wants to take risks coverage for longer term or lifelong. However, this policy would cover only up to 70 years only. We reviewed earlier about LIC Jeevan Umang whole life insurance plan that covers for entire life.
4) Modal Loading charges
There is a loading charges i.e. Increase in premium for regular and limited premium payment if the policy holder chooses monthly or half yearly premiums. These are called modal loading charges. One needs to pay 3% and 2% higher premium respectively.
Conclusion: If you are a low income earner or at the beginning of your career and looking to take a term insurance plan, you can go for LIC Saral Jeevan Bima Plan. LIC charges a little higher premium compared to private insurance companies, owning to its trusted brand. One can consider such plans through online mode so that they can get lower premiums through high sum assured rebate (if possible) and separate rebates for online purchases.
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