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.
1.)What is SBI Life New Smart Samriddhi Plan?
2.)Features of the SBI Life New Smart Samriddhi Plan
3.)Eligibility Criteria for the SBI Life New Smart Samriddhi Plan
4.)Benefits under the SBI Life New Smart Samriddhi Plan
5.)The Grace Period, Reduced Paid-Up & Revival of the SBI Life New Smart Samriddhi Plan
6.)Free Look-Up Period of the SBI Life New Smart Samriddhi Plan
7.)Surrendering the SBI Life New Smart Samriddhi Plan
8.)Advantages of the SBI Life New Smart Samriddhi Plan
9.)Disadvantages of the SBI Life New Smart Samriddhi Plan
10.)Research Methodology
11.)SBI Life New Smart Samriddhi Plan – IRR Analysis
12.)SBI Life New Smart Samriddhi Plan Vs. Other Investment Products
13.)SBI Life New Smart Samriddhi Plan Vs. Pure Term Insurance + PPF/ELSS
14.)Final Verdict on the 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.
The basic details of the SBI Life New Smart Samriddhi Plan are given at a glance below;
| Age at Entry | Min.:3 year |
| Maximum Age at Maturity | 65 years |
| Policy Term | 12 & 15 years |
| Premium Payment Term (PPT) | 6 years for a policy term of |
| Premium Frequency | Yearly/ Monthly |
| Annualized Premium (in | Minimum: 12,000 |
| Basic Sum Assured (BSA) | Minimum: 63,500 |
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 | Slabs Less than 30,000 | Greater than or equal to |
| Rate of Guaranteed Additions | 5.5% p.a. | 6% p.a. |
On survival, of the life assured till the end of the policy term, Basic Sum Assured Plus Accrued Guaranteed Additions is receivable.
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
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.
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.
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.
You can go through the SBI Life New Smart Samriddhi Policy Brochure for further details.
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.
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 |
| Premium Paying Term | 7 |
| 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 | |
| Age | Year | Annualized | Death |
| 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.
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 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 | |
| Basic Sum Assured | 5,00,000 |
| Policy Term | 15 |
| Premium paying term | 5 |
| Annualized Premium | 4,100 |
| The amount left for | 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 | Term | ||
| Age | Year | Term | Death | Term | Death |
| 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.
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.
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