You need a proper plan to support your future goals. The action items to execute the plan should be taken with due care viz. selecting investment avenues, continuing your investing journey & proper exit from investment before the goal.
The first step of selecting investment avenues should be done with proper research or professional guidance. This review article about SBI Life Saral Swadhan + helps you in understanding the product & take an informed decision.
What are the advantages(pros) and disadvantages(cons) of SBI Life Saral Swadhan +?
What is the fund value, fund performance, and Internal Rate of Return of this plan?
Will it be a smart investment option for your future?
In this SBI Life Saral Swadhan + review, we have answered all your questions with precise calculations and illustrations.
Table of Contents
- Death benefit
- Maturity Benefit
5.)Grace period, Revival & Paid-up value of SBI Life Saral Swadhan + – Good or Bad?
6.)Free look period of SBI Life Saral Swadhan +
7.)Surrendering SBI Life Saral Swadhan +
8.)Advantages of SBI Life Saral Swadhan +
9.)Disadvantages of SBI Life Saral Swadhan +
10.)Research Methodology of SBI Life Saral Swadhan +
11.)Benefit Illustration & IRR(Internal Rate of Return i.e. Interest Rate) Analysis – SBI Life Saral Swadhan +
- SBI Life Saral Swadhan + vs SBI Life Smart Humsafar
- SBI Life Saral Swadhan + vs SBI Life Smart Platina Assure Plan
An Overview of SBI Life Saral Swadhan +
It is an Individual Non-linked Non-participating Life Insurance Savings Product. This product gives you a fixed life cover throughout the policy term along with a guaranteed maturity benefit. It safeguards your family with a life cover while providing a return of premium, enabling you to build a better life.
Before getting into the analysis of SBI Life Saral Swadhan +, please read the official brochure(pdf) of SBI Life Saral Swadhan + here
Features of SBI Life Saral Swadhan + – Analysis
- Simplified documentation & enrollment process.
- Affordable premium based on your age & sum assured.
- You can choose a policy term either 10 or 15 years.
- At maturity, you will get a guaranteed benefit of 100% or 115% of the total premiums paid.
Eligibility Criteria of SBI Life Saral Swadhan +
|Age at Entry||Minimum: 18 years||Maximum: 55 years|
|Maximum Age at Maturity||65 / 70 years|
|Policy Term||Regular Premium Payment Term:10 years, Limited Premium Payment Term:15 years|
|Premium Paying Term||Regular Premium Payment Term: Same as Policy Term, Limited Premium Payment Term: 10 years|
|Premium Amount||Minimum: INR 1,500||Maximum: INR 5,000|
|Basic Sum Assured||Minimum: 30,000||Maximum: 4,75,000|
Review of Benefits under SBI Life Saral Swadhan +
In the unfortunate event of death of the Life Assured during the policy term, Sum Assured on Death will be payable to the beneficiary. Where Sum Assured on Death will be Higher of
- Basic Sum Assured or
- 10 times the Annualized Premium or
- 105% of the total premiums received up to the date of death
On survival till the end of the policy term chosen the following Maturity benefit will be payable to you:
- Policy term 10 years: 100% of the Total premiums paid.
- Policy term 15 years: 115% of the Total premiums paid.
Grace period, Revival & Paid-up value of SBI Life Saral Swadhan + – Good or Bad?
A grace period of 30 days from the premium due date will be allowed for payment of premiums. The policy will remain in force during the grace period.
A lapsed policy may be revived within 5 consecutive years from the date of the first unpaid premium, on submission of evidence of health satisfactory to the Company, and payment of arrears of premium with interest.
The policy will acquire paid-up value only if premiums have been paid for at least 2 consecutive years. Sum Assured on Death/maturity benefit will be reduced to the same proportion as the ratio of the number of premiums paid to the total number of premiums payable under the policy.
Free look period of SBI Life Saral Swadhan +
In case you disagree with the terms and conditions, you have the option to return the policy within 15 days for policies sourced through any channel other than Distance Marketing and electronic policies and 30 days for electronic policies and policies sourced through Distance Marketing.
Surrendering SBI Life Saral Swadhan +
The policy will acquire surrender value only if premiums have been paid for at least 2 consecutive years. On surrender, the higher of the Non-Guaranteed Special Surrender Value (SSV) and the Guaranteed Surrender Value (GSV) will be paid.
Advantages of SBI Life Saral Swadhan +
- There is no specific advantage to this policy.
Disadvantages of SBI Life Saral Swadhan +
- There is no rider option.
- A loan facility is not available.
- The premium payment can be done only in annual mode.
- It is a non-participating & non-linked policy, so the return on investment is literally zero under regular pay & very meager under limited pay.
- The sum assured is too low to meet your family’s future needs in case of an eventuality.
- No bonus or loyalty additions in this plan. Even traditional endowment policy provides loyalty additions for sticking to the policy throughout the term.
Research Methodology of SBI Life Saral Swadhan +
SBI Life Saral Swadhan + does not offer any other benefit other than returning the total premium paid. If we work out the Internal Rate of Return (IRR) for this cash flow, it will be zero under regular pay (100% return of premium).
The IRR for regular pay will also be very meager (115% return of premium). Though you may get back your money at the end of the policy term, the return is minuscule or nil. To understand this, a benefit illustration taken from the policy brochure is explained below.
Benefit Illustration & IRR(Internal Rate of Return i.e. Interest Rate) Analysis – SBI Life Saral Swadhan +
|Sum Assured||₹ 1,90,000|
|Policy term||15 years|
|Premium paying term||10 years|
|Annual premium||₹ 2,000|
A 25-year-old male buys SBI Life Saral Swadhan + for a sum assured of ₹ 1,90,000. He would be paying an annual premium of ₹ 2,000 for 10 years. At the end of 15 years, 115% of the total premium paid so far is given as a maturity benefit.
|Age||Year||Annualised premium / Maturity benefit||Death benefit|
The IRR is calculated at 1.33% in the above illustration.
Term plans do not accumulate any cash value or provide a savings component. They are designed purely for providing financial protection in case of the insured person’s death.
On the other hand, traditional insurance policies offer both life cover & savings or investment component that grows over the policy’s duration.
This SBI Life Saral Swadhan + doesn’t offer any cash value, but it just returns your premium. You pay the premium & get the life cover during the policy term. Your premium is returned without any value addition.
SBI Life Saral Swadhan + neither fits in the insurance basket nor the investment basket.
SBI Life Saral Swadhan + vs SBI Life Smart Humsafar
SBI Life Smart Humsafar is a joint life insurance policy issued on the lives of married couples. You get the advantages of savings and insurance protection for the husband and wife. A premium waiver benefit is built-in.
Please read the review below with IRR analysis and calculations.
SBI Life Saral Swadhan + vs SBI Life Smart Platina Assure Plan
Both plans are Individual Non-linked Non-participating plans but SBI Life Saral Swadhan + is a Life Insurance Savings Product while SBI Life Smart Platina Assure Plan is a Life Endowment Assurance Savings Product.
Read the complete review below with the analysis of the pros and cons.
SBI Life Saral Swadhan + vs Other Investment Plans – Review Conclusion
As we discussed earlier, this SBI Life Saral Swadhan + doesn’t offer any cash value, but it just returns your premium. You pay the premium & get the life cover during the policy term. Your premium is returned without any value addition.
After a thorough comparison with all other alternative investment options, it seems clear that bank FDs give you higher returns than SBI Life Saral Swadhan +.
Do you think it is wise to invest in a plan that only pays your premium back without any added benefit?
Final Verdict on SBI Life Saral Swadhan + – Good or Bad?
The sum assured is very low under SBI Life Saral Swadhan +. The minimum sum assured is ₹ 30,000 & the maximum sum assured is ₹ 4,75,000.
The minimum sum assured under Saral Jeevan Bhima policies is ₹ 5 lakhs. Saral Jeevan Bhima is a standard term plan as per guidelines of the Insurance Regulatory & Development Authority of India (IRDAI). So, there is no point in opting for this plan.
The main purpose of obtaining a life insurance policy is to protect your family in case of eventualities. But like many policies in the bazaar, the sum assured of SBI Life Saral Swadhan + is too low to cover even the basic needs of your family.
It is completely absurd to choose SBI Life Saral Swadhan +.
Be careful of insurance agents who try to push you into this plan for their agent commission.
Traditional policies offer a combination of insurance protection and savings or investment opportunities. Part of the premium goes towards the cost of insurance, while the remainder is allocated towards building cash value or investment returns.
Traditional policies usually have higher premiums because they combine life insurance protection with a savings or investment element.
Term plans generally have lower premiums compared to traditional life insurance policies. Term plans are often preferred for their affordability and simplicity. When choosing a term plan life insurance policy, it’s important to consider your financial goals, budget, and the level of coverage you require.
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