SBI Life e-Wealth Plus Plan: Good or Bad? A Detailed ULIP Review
Can the SBI Life e-Wealth Plus Plan offer both financial growth and life insurance protection, all in one?
Can the SBI Life e-Wealth Plus Plan grow your wealth and secure your future effortlessly with a single plan?
Can the SBI Life e-Wealth Plus Plan adapt to your goals while giving peace of mind for your family’s future?
In this article, we’ll review its features, benefits, drawbacks, and associated costs, and evaluate its potential through an Internal Rate of Return (IRR) analysis to see how it compares to other investment options.
What is the SBI Life e-Wealth Plus?
What are the features of the SBI Life e-Wealth Plus?
Who is eligible for the SBI Life e-Wealth Plus?
What are the benefits of the SBI Life e-Wealth Plus?
What are the investment strategies and fund options available in the SBI Life e-Wealth Plus?
What are the charges under the SBI Life e-Wealth Plus?
Grace Period, Discontinuance and Revival of SBI Life e-Wealth Plus
Free Look Period in SBI Life e-Wealth Plus
Surrendering SBI Life e-Wealth Plus
What are the advantages of the SBI Life e-Wealth Plus?
What are the disadvantages of the SBI Life e-Wealth Plus?
Research Methodology of SBI Life e-Wealth Plus
Benefit illustration – IRR Analysis of SBI Life e-Wealth Plus
SBI Life e-Wealth Plus Vs. Other Investments
SBI Life e-Wealth Plus Vs. Pure-term + PPF/ELSS
Final Verdict on the SBI Life e-Wealth Plus
SBI Life e-Wealth Plus is an Individual, Unit Linked, Non-Participating, Life Insurance, Savings product. It provides you with the twin benefits of Life Insurance Cover and Wealth Creation. The SBI Life e-Wealth Plus plan is suitable for making market-linked returns hassle-free.
| Minimum | Maximum | |
| Age at Entry | 5 years | 50 years |
| Age at Maturity | 18 years | 65 years |
| Policy term | Regular Pay – 10 years/ Limited Pay – 15 years | 30 years |
| Premium payment mode | Regular pay / Limited pay | |
| Premium Frequency | Yearly / Monthly | |
| Premium payment Term (PPT) | Regular pay: Same as policy term / Limited pay: 7 & 10 years | |
| Premium Range | Yearly: ₹ 36,000 | No Limit |
| Monthly: ₹ 3,000 | ||
| Basic Sum Assured | 10* Annualised premium | |
In the unfortunate event of the death of the Life Assured, while the SBI Life e-Wealth Plus Plan policy is in force, the highest of the below is payable:
On survival of the Life Assured up to maturity provided the SBI Life e-Wealth Plus Plan policy is in force, the Fund Value as on the date of maturity shall be payable in a lump sum.
There are two fund management strategies available under this product – Growth Strategy and Active Strategy.
In this strategy, the Premium is invested through the ‘Automatic Asset Allocation’ feature.
In the Automatic Asset Allocation feature, the allocations in the Equity Fund are reduced and the allocations in the Bond Fund and Money Market Fund increase, in a pre-determined percentage, as the SBI Life e-Wealth Plus Plan Policy Term progresses.
| Number of policy years till maturity | Equity fund | Bond fund | Money market fund | |||
| Minimum | Maximum | Minimum | Maximum | Minimum | Maximum | |
| >=18 years | 60% | 80% | 0% | 40% | 0% | 20% |
| 17 | 60% | 80% | 0% | 40% | 0% | 20% |
| 16 | 60% | 80% | 0% | 40% | 0% | 20% |
| 15 | 60% | 80% | 0% | 40% | 0% | 20% |
| 14 | 60% | 80% | 0% | 40% | 0% | 20% |
| 13 | 55% | 75% | 5% | 45% | 0% | 20% |
| 12 | 50% | 70% | 10% | 50% | 0% | 20% |
| 11 | 45% | 65% | 15% | 55% | 0% | 20% |
| 10 | 40% | 60% | 20% | 60% | 0% | 20% |
| 9 | 35% | 55% | 25% | 65% | 0% | 20% |
| 8 | 30% | 50% | 30% | 70% | 0% | 20% |
| 7 | 25% | 45% | 35% | 75% | 0% | 20% |
| 6 | 20% | 40% | 40% | 80% | 0% | 20% |
| 5 | 15% | 35% | 45% | 85% | 0% | 20% |
| 4 | 10% | 30% | 50% | 90% | 0% | 20% |
| 3 | 5% | 25% | 55% | 95% | 0% | 20% |
| 2 | 0% | 20% | 60% | 100% | 0% | 20% |
| 1 | 0% | 15% | 65% | 100% | 0% | 20% |
In this strategy, you can choose your fund allocation from twelve-unit funds, as per your risk appetite.
| S.no | Name of the fund | Equity & Equity Related Instruments | Debt Instruments | Money Market Instruments | Risk Profile |
| 1 | Equity Fund | 80-100% | 0-20% | 0-20% | High |
| 2 | Top 300 Fund | 60-100% | 0-40% | 0-40% | High |
| 3 | Equity Optimiser Fund | 60-100% | 0-40% | 0-40% | High |
| 4 | Growth Fund | 40-90% | 10-60% | 0-40% | Medium High |
| 5 | Balanced Fund | 40-60% | 0-40% | 20-60% | Medium |
| 6 | Bond Fund | – | 60-100% | 0-40% | Low to Medium |
| 7 | Money Market Fund | – | 0-20% | 80-100% | Low |
| 8 | Bond Optimiser Fund | 0-25% | 75%-100% | 0-25% | Low to Medium |
| 9 | Pure Fund | 80-100% | – | 0-20% | High |
| 10 | Midcap Fund | 80-100% | 0-20% | 0-20% | High |
| 11 | Corporate Bond Fund | 70-100% | 0-30% | 0-30% | Low to Medium |
| 12 | Blue-chip Fund | 80-100% | 0-20% | 0-20% | High |
| Discontinued Policy Fund | – | 60-100% | 0-40% | Low |
Nil
A Policy Administration Charge of ₹ 100 per month will be deducted throughout the term of the policy.
| S.no | Name of the fund | Fund Management Charge (p.a.) |
| 1 | Equity Fund | 1.35% |
| 2 | Top 300 Fund | 1.35% |
| 3 | Equity Optimiser Fund | 1.35% |
| 4 | Growth Fund | 1.35% |
| 5 | Balanced Fund | 1.25% |
| 6 | Bond Fund | 1.00% |
| 7 | Money Market Fund | 0.25% |
| 8 | Bond Optimiser Fund | 1.15% |
| 9 | Pure Fund | 1.35% |
| 10 | Midcap Fund | 1.35% |
| 11 | Corporate Bond Fund | 1.15% |
| 12 | Blue-chip Fund | 1.35% |
| Discontinued Policy Fund | 0.50% |
Discontinuance charges are calculated as a percentage of a Single Premium or Fund Value. It varies according to the year of discontinuance.
Mortality charges are deducted from each policy month from Fund Value by way of cancellation of units. This is charged based on your age and Sum at Risk.
A charge of ₹ 100 is applicable for every switch, in excess of two free switches in the same policy year during the SBI Life e-Wealth Plus Plan policy term.
A charge of ₹100 is applicable for every partial withdrawal in excess of one free partial withdrawal in the same SBI Life e-Wealth Plus Plan policy year
Inference from these charges: In this plan, your entire premium isn’t immediately invested in the fund you choose.
Instead, a portion is used to cover various charges, with only the remaining amount directed toward the investment. These charges can gradually reduce your overall investment returns over time.
A grace period of 30 days will be allowed to pay the premium.
If the SBI Life e-Wealth Plus Plan policy is discontinued during the first 5 policy years: the fund value after deducting the applicable discontinuance charges, shall be credited to the discontinued policy fund, and the risk cover shall cease.
The proceeds of the discontinued policy shall be payable at the end of the lock-in period or date of surrender whichever is later.
If the policy is discontinued after the first 5 policy years: the policy will be converted into a reduced paid-up policy. The paid-up sum assured is the multiplication of the original sum assured with the total number of premiums paid / the original number of premiums payable.
The SBI Life e-Wealth Plus Plan offers a revival period of 3 years from the date of the first unpaid premium, during which you can revive your policy, by paying all due premiums.
In case you disagree with any of the terms and conditions, you have the option to return the policy, within 30 days beginning from the date of the receipt of the policy document, whether received electronically or otherwise.
If you surrender in the first 5 policy years, then – Your Fund Value net of appropriate discontinuance charges (if any) at the time of surrender request will be transferred to the Discontinued Policy Fund.
The Fund Value will be payable any 1 working day of the 6th policy year the policy will terminate.
If you surrender after the completion of the first 5 policy years, the fund value is payable immediately and the policy will terminate.
For investors, estimating potential returns is essential for sound decision-making. Market-linked products are generally expected to generate returns that justify the associated risks.
Let’s examine the benefit illustration provided in the policy brochure to determine whether the risk in the SBI Life e-Wealth Plus plan is justified.
Consider a 30-year-old woman investing in SBI Life e-Wealth Plus with a sum assured of ₹10 lakhs. She opts for a 20-year policy term and pays an annual premium of ₹1,00,000. At the end of the policy, the accumulated fund value will be paid out.
| Female | 30 years |
| Sum Assured | ₹ 10,00,000 |
| Policy Term | 20 years |
| Premium Paying Term | 20 years |
| Annualised Premium | ₹ 1,00,000 |
The brochure illustrates assumed returns at 4% and 8% per annum. These scenarios are for illustrative purposes only and do not represent guaranteed returns or the upper and lower limits of potential returns. The actual maturity benefit will depend on the plan’s performance over time.
| At 4% p.a. | At 8% p.a. | ||||
| Age | Year | Annualised premium / Maturity benefit | Death benefit | Annualised premium / Maturity benefit | Death benefit |
| 30 | 1 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 31 | 2 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 32 | 3 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 33 | 4 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 34 | 5 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 35 | 6 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 36 | 7 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 37 | 8 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 38 | 9 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 39 | 10 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 40 | 11 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 41 | 12 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 42 | 13 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 43 | 14 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 44 | 15 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 45 | 16 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 46 | 17 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 47 | 18 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 48 | 19 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 49 | 20 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 50 | 25,96,001 | 40,71,998 | |||
| IRR | 2.42% | 6.37% | |||
Under the 4% return scenario, the estimated fund value is ₹25.96 lakhs, resulting in an Internal Rate of Return (IRR) of 2.42% as per the SBI Life e-Wealth Plus Plan maturity calculator.
With an 8% return, the estimated fund value is ₹40.71 lakhs, providing an IRR of 6.37% as per the SBI Life e-Wealth Plus Plan maturity calculator.
These returns may not be favourable for a long-term investment strategy. The SBI Life e-Wealth Plus plan lacks the alpha generation needed for effective wealth accumulation.
Additionally, inflation will increase the cost of future financial goals, indicating a potential shortfall in achieving the desired corpus.
In the SBI Life e-Wealth Plus plan, the risk and return are not well-aligned, making it less ideal for wealth accumulation. Let’s consider alternative investment strategies that offer better risk-adjusted returns.
Combining insurance and investment often falls short of providing optimal yields, whereas separating these components can be more advantageous. Using the same parameters as before, let’s examine two alternative scenarios.
For life coverage, a pure-term insurance policy with a sum assured of ₹50 lakhs costs ₹4,300 annually for a 20-year term. This leaves a balance of ₹95,700 from the initial ₹1 lakh premium, which can be invested according to the investor’s risk preference.
| Pure Term Life Insurance Policy | |
| Sum Assured | ₹ 10,00,000 |
| Policy Term | 20 years |
| Premium Paying Term | 20 years |
| Annualised Premium | ₹ 4,300 |
| Investment | ₹ 95,700 |
| Term Insurance + PPF | Term insurance + ELSS | ||||
| Age | Year | Term Insurance premium + PPF | Death benefit | Term Insurance premium + ELSS | Death benefit |
| 30 | 1 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 31 | 2 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 32 | 3 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 33 | 4 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 34 | 5 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 35 | 6 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 36 | 7 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 37 | 8 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 38 | 9 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 39 | 10 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 40 | 11 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 41 | 12 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 42 | 13 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 43 | 14 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 44 | 15 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 45 | 16 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 46 | 17 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 47 | 18 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 48 | 19 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 49 | 20 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 50 | 42,47,988 | 70,12,385 | |||
| IRR | 6.73% | 10.87% | |||
For conservative investors: Debt options like PPF may be preferred. Based on current rates, the estimated maturity value of a PPF investment is ₹42.47 lakhs, with an IRR of 6.73%, closely matching the 8% scenario in SBI Life e-Wealth Plus.
Despite being a low-risk debt instrument, PPF offers returns that outperform the ULIP’s 8% projection.
For risk-tolerant investors: Equity investments, such as ELSS funds, may be a better choice. Assuming average returns, the estimated pre-tax maturity value of an ELSS investment is ₹77.22 lakhs.
After accounting for capital gains tax, the net maturity value is around ₹70.12 lakhs, yielding a post-tax IRR of 10.87%.
| ELSS Tax Calculation | |
| Maturity value after 20 years | 77,22,869 |
| Purchase price | 19,14,000 |
| Long-Term Capital Gains | 58,08,869 |
| Exemption limit | 1,25,000 |
| Taxable LTCG | 56,83,869 |
| Tax paid on LTCG | 7,10,484 |
| Maturity value after tax | 70,12,385 |
These alternative returns significantly enhance wealth accumulation. Comparing the returns, it’s evident that investing separately provides higher returns than the ULIP, accelerating the achievement of financial goals.
SBI Life e-Wealth Plus is a typical ULIP providing both life cover and market-linked investment options. However, the analysis shows that the life cover offered is insufficient to meet a family’s basic financial needs.
Additionally, the returns are below expectations for a market-linked product, with high charges further diminishing the overall yield and it also has a high agent commission.
The insurance and investment aspects of SBI Life e-Wealth Plus may not be ideal for an investor, and choosing this plan could disrupt your financial goals.
If you are willing to take on market risk, there are other investment options that offer more favourable risk-adjusted returns.
For long-term investing, it’s essential to choose a strategy that aligns with your risk tolerance. For life coverage, a pure-term insurance policy is often a better choice, as it provides adequate protection at a lower cost, leaving you with more funds to invest.
When it comes to financial advice, are Quora, Facebook, and Twitter the final word?
Selecting the right insurance and investment products is crucial. If this process feels complex, consulting a Certified Financial Planner can be beneficial. Their expertise will help you find products that align with your financial goals and personal needs.
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