Globally, insurance penetration was 3.35% for the life segment and 3.88% for the non-life segment.
An unexpected and troubling find was made in the recently published Economic Survey of India for 2020-2021! The survey stated, “As of 2019, the penetration for life insurance in India is 2.82%, and the penetration for non-life insurance is much lower at 0.94%. Globally, insurance penetration was 3.35% for the life segment and 3.88% for the non-life segment."When compared to the worldwide average and its Asian counterparts, India's life insurance term plan penetration is substantially lower.
This is due to a lack of knowledge about insurance products in our country. The average Indian appears to be uninformed of the benefits provided by term insurance plans and unaware that even a low term insurance premium could give a significant life cover.
To address this problem, the Insurance Regulatory and Development Authority introduced the Saral Jeevan Bima plan, a simpler and standardised term life insurance policy. It is the easiest term insurance to comprehend since all life insurance providers are expected to follow the IRDAI's policy product requirements.
IRDAI's Reasons for Introducing Saral Jeevan Bima - Standard Term Plan
In order to provide effective financial planning, there is a need to educate people about term insurance policies in India. Term insurance not only provides you with the required life insurance coverage, which ensures the financial stability of your loved ones even if you are not present.
The IRDAI saw a need to launch the Saral Jeevan Bima for several reasons, which are as follows:
The IRDAI established the Saral Jeevan Bima in an effort to make insurance more inexpensive and accessible to everyone.
It seeks to dispel the myth that a term life insurance policy is a sophisticated and difficult financial instrument to comprehend. The Saral Jeevan Bima is one of the simplest term insurance plans in India because the features, benefits, inclusions, and exclusions are same across insurance providers.
Being a simple plan, it attempts to increase insurance penetration in India. In case of term insurance there is a certainqualifying requirement related to income. This eligibility criteria makes a term insurance unavailable to the ordinary customers.However, Saral Jeevan Bima is open to everyone, regardless of gender, location of residence, travel, employment, or educational requirements.
It is the ideal term policy for first-time purchasers since it allows for an educated decision and builds confidence between the insurance provider and the insurance seeker.
Because it is available to be purchased online by most insurance providers, it is easy to compare multiple term plan quotes to ensure you acquire the best term insurance that meets your financial needs.
*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