Are you considering an investment in the SBI Life Smart Privilege Plan?
Anticipating a dual benefit of insurance and investment, you might be contemplating whether this plan aligns with your financial goals. The SBI Life Smart Privilege Plan positions itself as a unit-linked investment insurance plan (ULIP), strategically tailored to cater to the needs of investors.
Eligibility Conditions of SBI Life Smart Privilege Plan
In terms of eligibility, the SBI Life Smart Privilege Plan operates as a long-term financial product, offering policy terms starting from a minimum of 5 years. The specific plan options and eligibility criteria may vary, ensuring a diverse range of choices for investors seeking both insurance coverage and investment opportunities within the framework of this plan.
|Minimum entry age
|Regular, or Limited premium policies: 8 years, Single Premium: 13 years
|Maximum entry age
|Minimum – 18 years, Maximum – 70 years
|Regular premium, limited premium, and single premium
|Regular premium – 10 years to 30 yearsLimited premium – 10 years to 30 yearsSingle premium – 5 years to 30 years
|Premium payment term
|Regular premium – Same as policy termLimited premium:Minimum – 5 yearsMaximum – Policy term minus 1 yearSingle premium – One-time payment at the inception of the policy.
|Minimum premium amount (In multiples of Rs. 100)
|Regular premium/Limited premium payment:Yearly – Rs. 6 lakhsHalf-yearly – Rs. 3 lakhsQuarterly – Rs. 1,50,000Monthly – Rs. 50,000Single premium – Rs. 6 lakhs
|Maximum premium amount
|No upper limitIt will be as per Board Approved Underwriting Policy
|Premium payment frequency
|Yearly, half-yearly, quarterly, and monthly
|Basic sum insured
|Regular premium and limited premium payment term – 7 x Annualized premiumSingle premium – 1.25 x Single Premium
SBI Life Smart Privilege Plan: Key Features
Examining the SBI Life Smart Privilege Plan: Noteworthy Features Explored
- Premium Flexibility: Policyholders enjoy the flexibility of choosing their premium payment approach—whether throughout the policy term, for a limited duration, or through a single payment. This adaptability caters to diverse financial preferences and capabilities.
- Premium Allocation Charge Benefit: A notable feature is the cessation of the premium allocation charge from the 6th policy year onwards. This can be advantageous for policyholders, potentially optimizing the allocation of their premiums towards the chosen investment avenues.
- Loyalty Additions: In the event the policy is in force, loyalty additions commence from the conclusion of the 6th policy year. This adds an element of long-term benefit, potentially enhancing the overall value proposition for policyholders.
- Fund Switching Options: Policyholders are empowered with unlimited free switches between the 11 available funds. These funds encompass a diverse range, including midcap funds, balanced funds, equity funds, and more. This feature facilitates strategic investment management, allowing policyholders to align their portfolio with evolving financial goals.
- Tax Benefits: The SBI Life Smart Privilege Plan extends tax benefits under Section 80C of the Income Tax Act, 1961. This provision enables policyholders to claim a maximum deduction of Rs. 1,50,000 during a financial year. Leveraging this benefit can contribute to an effective tax planning strategy.
- Diverse Investment Options: With a spectrum of 11 different funds to invest in, including midcap funds, balanced funds, and equity funds, the SBI Smart Privilege Plan caters to varied investment preferences. This diversity empowers policyholders to tailor their investment strategy according to their risk tolerance and financial objectives.
SBI Life Smart Privilege Plan Benefits
|In case of unfortunate death of the life assured during the policy term, while the policy is in force, the beneficiary willreceive higher of:Fund Value as on the date of death intimation orBasic Sum Assured Less Applicable Partial Withdrawals (APW) or105% of total premiums received up to the date of death less Applicable Partial Withdrawals (APW).In the case of minor lives, the date of commencement of policy and date of commencement of risk will be the same and thepolicyholder/proposer can be parents, legal guardian, etc. This shall be as per the company’s Board approved underwriting policy.
|The nominee or beneficiary (legal heir) has the option to receive the Death Benefit as a Lump sum or in installments over 2 to 5years under the ‘Settlement’ Option as yearly, half-yearly, quarterly, or monthly payouts as required.
|On completion of the Policy Term, the Fund Value will be paid in lumpsum as a maturity benefit.
|With this policy, you are eligible for Income Tax benefits/exemptions as per the applicable income tax laws in India.
|You can manage your funds as per your investment objectives and risk appetite.You have the option to pay premiums at your convenience.You are eligible to manage your evolving financial priorities with an unlimited free switching facility.Premium Redirection facility is allowed from 1 policy year onwards. Unlimited free premium redirections are allowed throughout the policy term. Redirection is applicable to future premiums but will not affect the existing units.
|Free look period
|15 days – For policies sourced through any channel mode other than Distance Marketing and for electronic policies30 days – For policies sourced through Distance Marketing and for electronic policies.
|Yearly, Half-yearly & Quarterly premium frequencies – 30 daysMonthly frequency – 15 days
Fund Options of SBI Life Smart Privilege Plan
The SBI Life Smart Privilege Plan provides investors with a selection of 11 diverse fund options. These funds span a spectrum of risk profiles, ranging from low to medium-risk bond funds to high-risk pure equity funds. The table below illustrates the various funds available within the SBI Life Smart Privilege plan.
- Top 300 Fund – The objective of this fund is to provide long-term capital appreciation by investing in stocks of the top 300 companies in terms of market capitalization on the National Stock Exchange (NSE).
- Balanced Fund – The objective of this diversified fund is to provide an accumulation of income through investments in both equities and fixed-income securities with an attempt to maintain a suitable balance between return and safety.
- Bond Fund – The objective of this fund is to provide relatively safe and less volatile investment options mainly through debt instruments and accumulation of income through investment in fixed-income securities.
- Equity Optimizer Fund – The objective of this fund is to provide equity exposure targeting higher returns (through long-term capital gains).
- Bond Optimizer Fund – The objective of this fund is to earn returns higher than a pure fixed-income fund by investing in a mix of Government Securities, Corporate Bonds, Money Market Instruments, and up to 25% in Equity Instruments.
- Money Market Fund – The objective is to deploy the funds in liquid and safe instruments to avoid market risk on a temporary basis.
- Equity Fund – The objective of this fund is to provide high equity exposure targeting higher returns in the long term.
- Growth Fund – This fund aims to provide long-term capital appreciation through investment primarily in equity and equity-related instruments, with a small part invested in debt and the money market for diversification and risk reduction.
- Pure Fund – The objective of this fund is to provide high equity exposure targeting higher returns in the long term.
- Midcap Fund – The objective of this fund is to provide high equity exposure targeting higher returns in the long term by investing predominantly in Midcap Companies.
- Corporate Bond Fund – This fund aims to earn a steady income for policyholders by investing in debt instruments and optimize returns for the portfolio by predominantly investing in Corporate Bonds of medium-term maturities.
Loyalty Additions are granted to in-force policies, commencing from the conclusion of the 6th Policy year and recurring at regular intervals until the chosen policy term concludes. The calculation of Loyalty Additions involves determining a percentage of the Average Fund Value over the last 12 policy months, up to the date of Loyalty Addition allocation. Once computed, these additions are incorporated into the fund value after unitization based on the unit price on the designated day for Loyalty Addition.
For policies that were not in force but subsequently revived, Loyalty Additions are credited on the date of revival, provided that all due premiums have been settled. It’s important to note that Loyalty Additions do not apply to reduced paid-up policies. The specific percentages governing the Loyalty Additions are detailed below:
|Last day of the policy year
|Last day of the policy year
Additional allocation is applicable for policies purchased by the staff. The following would be the additional allocation:
For a single premium – 2%
For Regular/Limited Premium policies (as a % of premium):
|Premium payment term
|For RP/LPPT policies
|1 to 5
SBI Life Smart Privilege Plan Work?
|Premium payment term
|Premium frequency mode
|Sum assured multiplier factor
|Premium payment term option
|Equity fund – 50%Balanced fund – 30%Bond fund – 20%
|Rs. 70 lakhs
|Rs. 10 lakhs
|Maturity benefit (At an assumed rate of returns)
|4% – Rs. 1,15,910578% – Rs. 1,44,37,484