About SBI Life Smart Bachat plan
The SBI Life Smart Bachat plan is an endowment plan with a limited premium payment term. The plan proves to be a smart option for savings, investments, and tax benefits because it is designed in such a way that the pressure of paying premiums for long periods of time is reduced and the freedom to choose your own premium paying term is given.
Let’s understand this plan in brief before getting into its details.
Modes of Payment
Claim Settlement Ratio of the insurer
USPs of the Policy
- Freedom to choose between two plan options: Endowment option and Endowment with Accidental Death and Total Permanent Disability benefits option
- Freedom to choose premium paying term (PPT) of 5, 7, 10, and 15 years
- Based on an individual’s financial goals, the policy term can be chosen between 10 to 25 years
- Life cover is provided throughout the policy term, even after the end of PPT
- Tax benefits on the policy as per prevailing tax laws in India
Illustration with Premium of INR 1 lakh
- Option A:
At INR 1,00,801 premium (yearly mode) for a policy term of 25 years and PPT of 15 years, the policyholder stands to receive sum assured of INR 20,90,000 and receives maturity benefit of INR 28,11,050 at 4% RoI and INR 44,93,500 at 8% RoI.
- Option B:
At INR 1,92,912 premium (yearly mode) for a policy term of 25 years and PPT of 15 years, the policyholder stands to receive sum assured of INR 20,90,000 and s/he receives maturity benefit of INR 28,11,050 at 4% RoI and INR 44,93,500 at 8% RoI. In addition to this, s/he receives in-built AD and TPB benefit of INR 20,90,000.
How Does the Plan Work?
Firstly, the individual who wants to be insured decides the premium paying term of 5, 7, 10, or 15 years. The individual then decides the policy term, which is between 10 and 25 years. Finally, the individual chooses one of the two plan options:
- Endowment option (Option A)
- Endowment with in-built Accidental Death and Total Permanent Disability benefits (Option B)
Now, let’s understand the benefits offered with this plan in depth:
- Maturity Benefits (applicable for both options): If the insured individual survives till the policy term end, s/he shall be paid the vested simple reversionary bonuses + basic sum assured + terminal bonus (if any). Note that if it is a paid-up policy, the policyholder will receive the paid-up sum assured instead of the basic sum assured.
- Death Benefits (applicable for both options): In case of the untimely demise of the policyholder, the insurance company shall pay the higher of the following as death benefit to the nominee(s):
- Sum assured on death + vested simple reversionary bonuses + terminal bonus (if any)
- 105% of total premiums paid until death
- Accidental Death and Total Permanent Disability Benefit (applicable only for option B):
- During the term of the policy, if the insured is involved in an accident that results in his/her demise, the nominee(s) will get lump sum of AD and TPD benefit + death benefit.
- During the term of the policy, if the insured is involved in an accident that results in total permanent disability, a lump sum of AD and TPD benefit will be paid. Also, all future premiums of the policy shall be waived off and the policy shall remain active until the base policy is surrendered / it reaches maturity / till the death of the insured individual.
Why Should I Buy This Plan?
Along with the benefits mentioned earlier, here are some more advantages of the SBI Life Smart Bachat plan:
- Tax Benefits – Premiums paid under the plan would be exempt from tax under Section 80(C) up to a limit of Rs 1,50,000. The death benefit or the maturity benefit received and the survival benefit received would also be tax exempt under Section 10(10D) of the Income Tax Act.
- Policy Loan Facility – The plan also offers the loan facility, which can be taken on the policy after the policy has acquired a surrender value. The maximum amount of loan available is 90% of the acquired special surrender value. The interest rate of the loan will be declared from time to time by the insurance company.
- Free-look Period – The individual is advised to go through the policy thoroughly. If s/he finds any objections to the terms and conditions of the policy, s/he can cancel the policy within 15 days (the free-look period) by giving a signed written notice to the insurance company stating the reasons for objection of the policy. The individual will be entitled to a refund of the premiums paid excluding a few charges like stamp duty charges.
- Grace Period – The plan provides a grace period of 30 days for yearly, half-yearly, and quarterly modes and 15 days for the monthly mode from the due date of unpaid premium. If the premium is not paid within the grace period, the policy gets lapsed.
Who Should Buy This Plan?
Option A of the SBI Life Smart Bachat plan can be bought by people who fall within the age bracket of 8 to 50 years, whereas Option B can be bought by people who fall within the age bracket of 18 to 50 years.
The plan is ideal to meet your investment needs. Moreover, the returns will help you to secure your family’s future later in life.
No riders are available with this plan.
SBI Life Insurance Company is a joint venture between State Bank of India and BNP Paribas Assurance, a French Multinational Bank. With its huge banking channel and customer base, SBI Life has soon become one of the top insurers in India. It continues to offer a wide range of life insurance and pension products at economical prices.