Waiting to buy a standard insurance plan is getting longer
You may have to wait a little longer to purchase a standard term insurance plan, the Saral Jeevan Bima, which was due to be launched on January 1 by life insurance companies because the products are filed with Insurance Regulatory and Development Authority of India (Irdai) are still under review. A term plan pays the sum insured to applicants in the event of the death of the insured.
To help clients choose the right temporary product, in October Irdai commissioned all life insurers to launch Saral Jeevan Bima plans with simple features and standard terms and conditions. âThe aim is to simplify the product and eliminate the confusion in the minds of customers that arises from the different characteristics attached to a forward plan and the variable prices due to these characteristics,â said Karthik Raman, director of marketing and product manager at IDBI. Federal Life Insurance Co Ltd.
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Irdai mandated the minimum sum insured to â¹5 lakh, which could be extended up to â¹25 lakh in multiples of â¹50,000. Insurers were also allowed to add accident and permanent disability benefits as riders to the basic scheme.
According to industry experts, people without a degree or with a low financial profile generally find it difficult to purchase existing term plans, while Saral Jeevan Bima was to be offered without restrictions on gender, place of residence, travel, profession or degree.
However, none of the life insurance companies have launched the plan yet. Some insurers Mint spoke to expect approvals to arrive later this month, while others plan to launch the products in the first week of February.
âOur product is under review by the regulator and we will assess the launch date when the product is approved by the authority. As the regulator’s product reviews are subject to detailed assessments, the entire approval process may take a long time to complete, âsaid Aalok Bhan, Director and Marketing Director of Max Life Insurance Co. Ltd. .
IDBI Federal Life Insurance Co. Ltd. plans to launch the plan in late January or early February, which will be subject to regulatory approvals. In addition, IndiaFirst Life Insurance Co. Ltd. and Kotak Mahindra Life Insurance Co. Ltd. have not yet received approval to launch the product. Most life insurance companies declined to comment as the products are still under review by Irdai.
According to industry experts, there are two areas where insurers are still in discussions with Irdai. âOne is flexibility in terms of maximum sum insured and the other is pricing. These are the two areas where some approvals are still pending, âsaid Mahavir Chopra, founder of Beshak.org, a research platform for insurance users. An email sent to Irdai asking for a response went unanswered until this story was filed.
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