Saral Jeevan Bima costs twice as much as a normal term plan

IRDAI in October had mandated all life insurers to launch Saral Jeevan Bima plans.

Edelweiss Tokio Life Insurance Co. Ltd has launched India’s first standard term insurance plan called Saral Jeevan Bima, which is aimed at first-time buyers and those who may not have easy access to existing term plans. Edelweiss Tokio’s Saral Jeevan Bima plan offers a sum assured of Rs. 5 lakh-25 lakh. Individuals can choose the premium paying term starting from five to 40 years.

Explaining the reason behind higher pricing, Mahavir Chopra, founder,, a research platform for insurance users, said: “Insurers use demography, income category, place of residence, occupation and education level of the buyers to create term products. The problem with Saral Jeevan Bima is that there are no filters allowed, so the premium will be high as the risk is high.”

Experts say Saral Jeevan Bima may work as an entry-level term plan. The current term plans usually offer a minimum sum assured of Rs. 25 lakh and a term of at least 10 years.

“Today, sum assured of Rs. 5 lakh isn’t available in the market. Some parts of the costs for distribution, policy issuance and medical underwriting are fixed. So, enabling a Rs. 5 lakh product will be more expensive proportionately than a Rs. 25 lakh plan. But from the Rs. 5 lakh sum assured point of view, these plans may not be expensive as there is no alternative available,” said Abhishek Bondia, managing director and principal officer,, an insurance broker.

However, an individual with good educational qualification and job would find regular term insurance plans cheaper than Saral Jeevan Bima.

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