SBI Life New Smart Samriddhi Plan Review: Good or Bad?

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You strive to achieve a prosperous future for your loved ones financially.

For this, you need regular savings with consistent returns.

SBI Life New Smart Samriddhi Plan claims to provide Insurance Coverage & regular savings to achieve your Financial Goals.

This detailed review will help you to analyze whether the SBI Life New Smart Samriddhi Plan can give you a prosperous future in the long run.

What is SBI Life New Smart Samriddhi Plan?

It is an Individual, Non-linked, Non-Participating, Life Insurance Savings Product.
It provides insurance Coverage and regular savings that help to achieve your Financial Goals.
It offers Guaranteed Additions that enable you to earn benefits for your loved ones.

Features of the SBI Life New Smart Samriddhi Plan

Premium payment frequency could be monthly or yearly, as per convenience.
Pay for 6 or 7 years and enjoy the benefit throughout the policy term of 12 or 15 years respectively.
Enjoy Guaranteed Additions at the end of each policy year.
Get 141% to 181% of the sum of annualized premiums paid as maturity benefits depending on age and annualized premium chosen.
The plan is available without medical examination & also swift processing of policy.
Tax benefit as per Sec 80C & Sec 10 (10D).

Eligibility Criteria for the SBI Life New Smart Samriddhi Plan

The basic details of the SBI Life New Smart Samriddhi Plan are given at a glance below;

Age at Entry	Min.:3 year Max.:50 years
Maximum Age at Maturity	65 years
Policy Term	12 & 15 years
Premium Payment Term (PPT)	6 years for a policy term of 12 years 7 years for a policy term of 15 years
Premium Frequency	Yearly/ Monthly
Annualized Premium (in multiples of 1,000)	Minimum: 12,000 Maximum: 75,00
Basic Sum Assured (BSA)	Minimum: 63,500 Maximum: 5,73,000

Benefits under the SBI Life New Smart Samriddhi Plan

Guaranteed Additions

These guaranteed additions are payable on maturity of the SBI Life New Smart Samriddhi Policy along with Basic Sum Assured or on earlier death of the life assured along with Sum Assured on Death.

Annualized Premium	Slabs Less than 30,000	Greater than or equal to 30,000
Rate of Guaranteed Additions	5.5% p.a.	6% p.a.

Maturity Benefit (For In-force policies)

On survival, of the life assured till the end of the policy term, Basic Sum Assured Plus Accrued Guaranteed Additions is receivable.

Death Benefit (For In-force policies)

In the unfortunate event of death of the Life Assured at any time during the policy term, ‘Sum Assured on Death’ along with accrued Guaranteed Additions, if any, will be payable to the Nominee/Beneficiary.

Where Sum Assured on Death is higher of

Basic Sum Assured OR 10 times the Annualized Premium OR
105% of total premiums received up to the date of death.

The Grace Period, Reduced Paid-Up & Revival of the SBI Life New Smart Samriddhi Plan

Grace Period

The SBI Life New Smart Samriddhi Plan offers a grace period of 30 days for payment of yearly premiums and 15 days for monthly premiums from the premium due date.

Reduced Paid-Up

The policy acquires reduced paid-up value only if at least 2 full policy years’ premiums have been paid & further premiums are unpaid. All the benefits are reduced proportionately in the ratio of the number of premiums paid to the actual number of premiums payable under the policy.

Revival

A lapsed policy may be revived, within 5 years from the date of the first unpaid premium. On revival, the policy will be eligible for future Guaranteed Additions.

Free Look-Up Period of the SBI Life New Smart Samriddhi Plan

In case you disagree with the terms and conditions of the SBI Life New Smart Samriddhi Plan, you have the option to return the policy, within 15 days of the date of receipt for policies sourced through any channel mode other than Distance Marketing and electronic policies and 30 days for electronic policies and policies sourced through Distance Marketing.

Surrendering the SBI Life New Smart Samriddhi Plan

The SBI Life New Smart Samriddhi Policy acquires Surrender Value only if at least the first 2 full policy years’ premiums have been paid.

On surrender, the higher of the Non-Guaranteed Special Surrender Value (SSV) or the Guaranteed Surrender Value (GSV) will be paid.

Advantages of the SBI Life New Smart Samriddhi Plan

All the benefits under this plan are guaranteed. It is a Non-Linked & Non-Participating Policy.
Guaranteed additions will boost your maturity value.
With the payment of a limited premium, you enjoy life cover for the whole policy term.
Loan facility is available to a maximum of 90% of the Surrender Value.

Disadvantages of the SBI Life New Smart Samriddhi Plan

The Maturity Benefit will not be sufficient to meet the inflated cost of your Financial Goals.
The Life cover is inadequate to meet your family’s future financial needs.

You can go through the SBI Life New Smart Samriddhi Policy Brochure for further details.

Research Methodology

SBI Life New Smart Samriddhi Plan is a limited premium policy with a guaranteed maturity benefit.

If we work out the Internal Rate of Return of this policy it will help you in your investment decision making.

Even though the above details give you an idea for working on the policy, it will be better if we estimate the return. This return can be compared with other investment alternatives available in the market.

SBI Life New Smart Samriddhi Plan – IRR Analysis

If a 29-Year-Old Male buys the SBI Life New Smart Samriddhi Plan for a sum assured of ₹ 5,27,800, it would cost him an Annual Premium of ₹ 70, 000.

The Premium Paying Term is 7 years & the policy term is 15 years. He would get the Maturity Benefit at the end of 15 years.

Age	29 years Male
Basic Sum Assured	5,27,800
Policy Term	15 years
Premium Paying Term	7 years
Annualized Premium	70,000

If he pays a premium of ₹ 70,00 for 7 years, he would be receiving the Maturity Benefit (including Guaranteed Addition) of ₹ 8,80,600.

The following table gives you the Internal Rate of Return Calculation.

		SBI Life New Smart Samriddhi
Age	Year	Annualized premium / Maturity benefit	Death benefit
40	1	-70,000	5,27,800
41	2	-70,000	5,27,800
42	3	-70,000	5,27,800
43	4	-70,000	5,27,800
44	5	-70,000	5,27,800
45	6	-70,000	5,27,800
46	7	-70,000	5,27,800
47	8	0	5,27,800
48	9	0	5,27,800
49	10	0	5,27,800
50	11	0	5,27,800
51	12	0	5,27,800
52	13	0	5,27,800
53	14	0	5,27,800
54	15	0	5,27,800
55		8,80,600	5,27,800

	IRR	4.97%

The IRR works out to be 4.97% which is not beneficial for a 15-year investment period. This is lower than a Bank FD rate of interest.

The Maturity Benefit will not help you to meet your Financial Goals. Also, the sum assured is inadequate to meet your family’s future financial needs.

In the long run, your investment should yield more than economic inflation which is missing in the SBI Life New Smart Samriddhi Plan.

SBI Life New Smart Samriddhi Plan Vs. Other Investment Products

In the earlier calculation, it is evident that the SBI Life New Smart Samriddhi Plan is not favorable to an investor.

Now, let us compare the yield with other investment products.

For comparison purposes let us assume the Sum Assured, Premium Paying Term, Policy Term & Annual Premium similar to the above illustration.

SBI Life New Smart Samriddhi Plan Vs. Pure Term Insurance + PPF/ELSS

SBI Life New Smart Samriddhi Plan is an Endowment Policy. Similarly, we can have Life Insurance Cover & Savings Benefits to meet both purposes.

Pure Term Life Insurance for a sum assured of ₹ 5 lakhs would cost ₹ 4,100 for 15-year cover & Premium Paying Term is 7 years.

In the earlier illustration, the premium amount is ₹ 70,000. So, the balance amount would be utilized for investment.

You can choose the investment product based on your risk appetite.

Pure Term Insurance policy
Basic Sum Assured	5,00,000
Policy Term	15 years
Premium paying term	5 years
Annualized Premium	4,100
The amount left for investment	65,900

In the first 5 years, the amount left after paying the Pure Term Insurance Premium is utilised for your PPF/ELSS investments. In the next 2 years, the full premium is available for investment.

Under ELSS, after investing in the first 7 years, the fund grows for the next 8 years. The final maturity proceeds are taxable for Capital Gains. The Tax Calculation is given below.

PPF matures after 15 years. It requires a minimum contribution of ₹ 500. But then in the earlier illustration, the Premium Paying Term is 7 years. So, in the seventh-year adjustments were made to pay premium for the next 8 years.

In the last 8 years, a minimum contribution of ₹ 500 is invested & in the rest of the years, after paying the Pure Term Insurance Premium, the amount left is utilised for PPF investment.

		Term Insurance + PPF		Term insurance + ELSS
Age	Year	Term Insurance premium + PPF	Death benefit	Term Insurance premium + ELSS	Death benefit
40	1	-70,000	5,00,000	-70,000	5,00,000
41	2	-70,000	5,00,000	-70,000	5,00,000
42	3	-70,000	5,00,000	-70,000	5,00,000
43	4	-70,000	5,00,000	-70,000	5,00,000
44	5	-70,000	5,00,000	-70,000	5,00,000
45	6	-70,000	5,00,000	-70,000	5,00,000
46	7	-66,000	5,00,000	-70,000	5,00,000
47	8	-500	5,00,000	0	5,00,000
48	9	-500	5,00,000	0	5,00,000
49	10	-500	5,00,000	0	5,00,000
50	11	-500	5,00,000	0	5,00,000
51	12	-500	5,00,000	0	5,00,000
52	13	-500	5,00,000	0	5,00,000
53	14	-500	5,00,000	0	5,00,000
54	15	-500	5,00,000	0	5,00,000
55		10,74,402	5,00,000	17,37,996	5,00,000

	IRR	6.70%		10.93%

ELSS Tax Calculation
Maturity value after 15 years	₹18,67,829
Less
Purchase price	₹4,69,500
Long-term capital gains	₹13,98,329
Exemption limit	₹1,00,000
Taxable LTCG	₹12,98,329
Tax paid on LTCG	₹1,29,833
Maturity value after tax	₹17,37,996

The IRR under both scenarios is far better than the SBI Life New Smart Samriddhi Plan.

The Pure term + PPF combo yields you 6.7% IRR & Pure term + ELSS combo yields you 10.93% IRR.

The maturity proceeds will help you to achieve your Financial Goals. They are Inflation-Beating Returns.

Final Verdict on the SBI Life New Smart Samriddhi Plan

SBI Life New Smart Samriddhi Plan is a Traditional Savings Plan. It is a comprehensive savings plan that provides a combination of protection and savings benefits to the policyholder and their family.

The plan provides a Maturity Benefit, which is equal to the sum of the guaranteed Maturity Benefit and the accumulated Guaranteed Additions. Though it offers guaranteed maturity benefits, it may not be sufficient enough to meet your financial goals.

The returns from the SBI Life New Smart Samriddhi Plan are not even matching any Debt Instrument Rate of Return. So, investing in the SBI Life New Smart Samriddhi Policy will leave you in a deficit when meeting your Financial Goals.

Have an adequate Life Insurance Policy & start your Investment Journey. Never mix up your Investment Portfolio & Insurance Portfolio.

Build a Diversified Investment Portfolio to meet your Life’s Financial Goals.

If you have any queries in building a Diversified Portfolio, then seek Professional Financial Advice.

Finance Professional will help you in drafting a custom-made Financial Plan considering your Personal Goals & Personal Risk Appetite.

SBI Life New Smart Samriddhi Plan Review: Is It Worth Buying?

Table of Contents:

What is SBI Life New Smart Samriddhi Plan?

Features of the SBI Life New Smart Samriddhi Plan

Eligibility Criteria for the SBI Life New Smart Samriddhi Plan