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In the journey of life, married couples are like partners; they share their success, progress, and prosperity. To achieve success, they have to join hands together.
To value this relationship, SBI has launched a product called Smart Humsafar. Humsafar is an Urdu word that means companion or a life partner in English.
Will this plan prove to be a lifelong companion for you and your better half?
What are the advantages(pros) and disadvantages(cons) of SBI Life Smart Humsafar?
What is the Internal Rate of Return(IRR) of SBI Life Smart Humsafar?
What are the benefits?
What are the maturity value, fund value, and fund performance of the SBI Life Smart Humsafar plan?
We understand that all of these questions keep bothering you a cautious customer!
We have answered all your questions in this review with precise calculations and crystal-clear illustrations of the good and bad aspects.
Finally!
You will find whether the SBI Life Smart Humsafar plan helps you to achieve prosperity along with protection.
Table of contents
1.)An Overview of SBI Life Smart Humsafar
2.)Features of SBI Life Humsafar – Analysis
3.)Eligibility Criteria of SBI Life Smart Humsafar
4.)Review of Benefits under SBI Life Smart Humsafar – Good or Bad?
- Maturity benefit
- Death benefit
5.)Review of Grace Period & Revival under SBI Life Smart Humsafar – Good or Bad?
- Grace period
- Revival
- Free look period
6.)Surrendering SBI Life Smart Humsafar
7.)Advantages of SBI Life Smart Humsafar – Analysis
8.)Disadvantages of SBI Life Smart Humsafar
9.)Research Methodology of SBI Life Smart Humsafar
10.)Benefit Illustration of SBI Life Smart Humsafar – IRR analysis(Internal Rate of Return i.e. Interest Rate)
11.)SBI Life Smart Humsafar vs Other Investment Plans – Review
- SBI Life Smart Humsafar Vs Term Insurance + PPF / ELSS – Review
- SBI Life Smart Humsafar vs SBI Life Smart Future Choices – Review
- SBI Life Smart Humsafar vs SBI Life Smart Privilege Plan – Review
12.)SBI Life Smart Humsafar vs Other Investment Plans – Review Conclusion
13.)Final Verdict on SBI Life Humsafar – Good or Bad Investment Plan?
An Overview of SBI Life Smart Humsafar
It is an Individual, Non-Linked, Participating Life Insurance Savings Product. It is a Joint Life plan issued on the lives of husband and wife. It provides you with the benefits of insurance coverage and savings for both husband and wife. There is an inbuilt Premium waiver benefit.
Before reading the review of SBI Life Smart Humsafar,
please read the Official Brochure(pdf) of SBI Life Smart Humsafar for a better overall perspective.
This will in turn help you evaluate the pros and cons of SBI Life Smart Humsafar effectively.
Let’s analyse the features of SBI Life Smart Humsafar in short and crisp points!
Features of SBI Life Humsafar – Analysis
- It is joint life insurance covering you and your spouse under a single policy.
- Guaranteed minimum bonus for first 3 policy years of 2.50% of the Basic Sum Assured.
- Premium waiver benefit in case of death of any one of the lives assured.
- Additional rider benefits can be added at an affordable cost.
- The plan pays a maturity amount on the survival of one or both the lives assured at the end of the policy term.
- Provides financial protection in the event of death of both lives assured.
Eligibility Criteria of SBI Life Smart Humsafar
| Age at Entry | Minimum: 18 years | Maximum: 46 years |
| Maximum Age at Maturity | 65 years | |
| The maximum age difference between the lives assured | 20 years | |
| Basic Sum Assured | Minimum: 100,000 | Maximum: 5,00,00,000 |
| Policy Term | Minimum: 10 years | Maximum: 30 years |
| Premium Frequency | Yearly / Half-yearly / Quarterly / Monthly | |
| Premium Payment Term | Same as the policy term | |
| Premium Frequency Loading | Half-Yearly: 51.00% of annualized premium
Quarterly: 26.00% of annualized premium Monthly: 8.50% of annualized premium |
|
| Premium | Minimum | Maximum |
| Yearly: 6,000
Half-yearly: 3,000 Quarterly: 1,500 Monthly: 500 |
Based on the basic sum assured | |
Review of Benefits under SBI Life Smart Humsafar – Good or Bad?
- Maturity benefit
If either one or both of the lives assured survive till maturity then Basic Sum Assured + Vested Simple Reversionary Bonuses + Terminal Bonus, if any, will be given to the policyholder provided the policy is in force.
- Death benefit
First Death:
If your policy is in force as of the date of first death: A higher of A or B is paid to the surviving life assured.
A. Sum assured on death (higher than Basic Sum Assured or10 times of annualized premium)
B. 105% of the total premiums received up to the date of death under the base policy.
Additionally, all future premiums starting from the next policy anniversary will be waived off for the surviving life assured.
Second Death
If your policy is in force as of the date of the second death: A higher of A or B is paid to the surviving life assured.
A. Sum assured on death + Vested Simple Reversionary Bonuses + Terminal Bonus, if any (Sum assured on death = higher of Basic Sum Assured or10 times of annualized premium)
B. 105% of the total premiums received up to the date of death under the base policy.
SBI Life Smart Humsafar – Bonus
The Simple Reversionary Bonus rate for the first 3 policy years is guaranteed to be at least 2.50% of the Basic Sum Assured. A terminal bonus may also be declared and paid at maturity, earlier death, or surrender.
Review of Grace Period & Revival under SBI Life Smart Humsafar – Good or Bad?
- Grace period
30 days grace period from the premium due date for yearly/ half-yearly/ quarterly premium and 15 days for monthly premium is allowed.
- Revival
A lapsed / Paid up policy may be revived within 5 consecutive years from the date of the first unpaid premium
- Free look period
If you disagree with the terms and conditions, you can return the policy within 15 days of receipt, for policies sourced through any channel mode other than Distance Marketing and electronic policies (30 days for policies sourced through Distance Marketing and electronic policies).
Surrendering SBI Life Smart Humsafar
Only after the policy’s first two complete policy years’ worth of premiums have been paid will the policy become paid up and/or have a surrender value.
The Guaranteed Surrender Value (GSV) = GSV factors (total premiums paid) + the Surrender value of the vested bonuses.
Let’s analyse the advantages of SBI Life Smart Humsafar in short and crisp points!
Advantages of SBI Life Smart Humsafar – Analysis
- On the first death of the joint life, the death benefit is paid & future premiums will be waived.
- At maturity or on the second death, apart from maturity benefit/death benefit, you will receive a simple revisionary bonus & terminal bonus (if any).
- Loans can be availed to a maximum of 90% of the surrender value.
- Discount on the premium is available for a high sum assured.
- Tax benefit as per Sec 80 C & Sec 10(10D).
Now let’s look at the not-so-good features of SBI Life Smart Humsafar.
Disadvantages of SBI Life Smart Humsafar
- The bonuses are guaranteed only for the first 3 years.
- As this is a participating policy, the maturity benefit is not guaranteed.
- For a long-term investment, the potential return is low & as a result, it affects your final goals.
Research Methodology of SBI Life Smart Humsafar
This is an insurance cum investment product. So far, the discussion is about the basic details. To determine whether this policy suits you or not, you need to analyze the investment part of this policy. For this let us analyse the benefit illustration taken from the SBI portal. The potential return of the policy can be compared with similar investment products. This will help you to understand better & take informed decisions.
Benefit Illustration of SBI Life Smart Humsafar – IRR analysis(Internal Rate of Return i.e. Interest Rate)
This is a joint life policy; we can assume that a 35-year-old male & his spouse 30 years old have taken the SBI life Smart Humsafar policy for a sum assured of ₹10 lakhs.
The annual premium is ₹73,410 & the premium paying term & policy term is 15 years. At the end of the policy term (15 years), they receive the maturity benefit including the bonus.
| Male | 35 Years |
| Spouse | 30 years |
| Sum Assured | ₹ 10 Lakhs |
| Policy term | 15 years |
| Premium paying term | 15 years |
| Annual premium | ₹ 73,410 |
The bonus rates are assumed as 4% p.a. & 8% p.a. It is assumed constant during the bonus accrual period, whereas the actual bonus could vary depending on future investment performance. These are not guaranteed and they are not higher or lower limits of returns.
| At 4% p.a. | At 8% p.a. | ||||
| Age | Year | Annualized premium / Maturity benefit | Death benefit | Annualized premium / Maturity benefit | Death benefit |
| 35 | 1 | -73,410 | 10,00,000 | -73,410 | 10,00,000 |
| 36 | 2 | -73,410 | 10,00,000 | -73,410 | 10,00,000 |
| 37 | 3 | -73,410 | 10,00,000 | -73,410 | 10,00,000 |
| 38 | 4 | -73,410 | 10,00,000 | -73,410 | 10,00,000 |
| 39 | 5 | -73,410 | 10,00,000 | -73,410 | 10,00,000 |
| 40 | 6 | -73,410 | 10,00,000 | -73,410 | 10,00,000 |
| 41 | 7 | -73,410 | 10,00,000 | -73,410 | 10,00,000 |
| 42 | 8 | -73,410 | 10,00,000 | -73,410 | 10,00,000 |
| 43 | 9 | -73,410 | 10,00,000 | -73,410 | 10,00,000 |
| 44 | 10 | -73,410 | 10,00,000 | -73,410 | 10,00,000 |
| 45 | 11 | -73,410 | 10,00,000 | -73,410 | 10,00,000 |
| 46 | 12 | -73,410 | 10,00,000 | -73,410 | 10,00,000 |
| 47 | 13 | -73,410 | 10,00,000 | -73,410 | 10,00,000 |
| 48 | 14 | -73,410 | 10,00,000 | -73,410 | 10,00,000 |
| 49 | 15 | -73,410 | 10,00,000 | -73,410 | 10,00,000 |
| 50 | 12,93,250 | 16,03,750 | |||
| IRR | 1.98% | 4.57% | |||
In the above illustration, we have calculated the IRR (Internal Rate of Return i.e. Interest Rate) of SBI Life Smart Humsafar at 1.98% & 4.57% respectively.
At maturity, you will receive ₹ 12.93 lakhs if the bonus rate is 4%, or else you will receive ₹ 16.03 lakhs if the bonus rate is 8% throughout the policy term. The IRR calculation is shown in the above table.
The IRR is 1.98% under the 4% scenario; this rate is below a savings bank interest rate. The IRR is 4.57% under the 8% scenario; this is also far below than bank FD rate.
For a 15-year period, the investment return should be higher than the inflation rate & eventually, you could meet your goals.
Since the investment rate is poor, if you invest in SBI Life Smart Humsafar, you may fall short of funds when the goal is due.
SBI Life Smart Humsafar vs Other Investment Plans- Review
As we discussed in the earlier part, the investment return is not satisfactory in SBI Life smart Humsafar. We can analyze the other investment return by investing the same premium amount as in the earlier illustration.
SBI Life smart Humsafar is insurance cum investment & that too it has a joint life cover option. To meet this, we can take a life cover for both individuals for a sum assured of ₹ 10 lakhs each.
It would cost a premium of ₹ 9,100 (₹ 5000 for males & ₹ 4100 for females) per annum. Out of ₹73,410; the first insurance premium is paid & the balance amount of ₹ 64,310 could be utilised for investment.
SBI Life Smart Humsafar Vs Term Insurance + PPF / ELSS – Review
| Pure term insurance | |
| Sum Assured | ₹ 10 Lakhs |
| Policy term | 15 years |
| Premium paying term | 15 years |
| Annual premium | ₹ 9,100 |
| Investment | ₹ 63,410 |
For comparison purposes, all the metrics are assumed similar to the benefit illustration. For investment, you can choose either debt or equity based on your risk profile. Here we have chosen PPF (debt) & ELSS (equity).
| Term Insurance + PPF | Term insurance + ELSS | ||||
| Age | Year | Term Insurance premium + PPF | Death benefit | Term Insurance premium + ELSS | Death benefit |
| 35 | 1 | -73,410 | 10,00,000 | -73,410 | 10,00,000 |
| 36 | 2 | -73,410 | 10,00,000 | -73,410 | 10,00,000 |
| 37 | 3 | -73,410 | 10,00,000 | -73,410 | 10,00,000 |
| 38 | 4 | -73,410 | 10,00,000 | -73,410 | 10,00,000 |
| 39 | 5 | -73,410 | 10,00,000 | -73,410 | 10,00,000 |
| 40 | 6 | -73,410 | 10,00,000 | -73,410 | 10,00,000 |
| 41 | 7 | -73,410 | 10,00,000 | -73,410 | 10,00,000 |
| 42 | 8 | -73,410 | 10,00,000 | -73,410 | 10,00,000 |
| 43 | 9 | -73,410 | 10,00,000 | -73,410 | 10,00,000 |
| 44 | 10 | -73,410 | 10,00,000 | -73,410 | 10,00,000 |
| 45 | 11 | -73,410 | 10,00,000 | -73,410 | 10,00,000 |
| 46 | 12 | -73,410 | 10,00,000 | -73,410 | 10,00,000 |
| 47 | 13 | -73,410 | 10,00,000 | -73,410 | 10,00,000 |
| 48 | 14 | -73,410 | 10,00,000 | -73,410 | 10,00,000 |
| 49 | 15 | -73,410 | 10,00,000 | -73,410 | 10,00,000 |
| 50 | 17,44,177 | 25,23,103 | |||
| IRR | 5.56% | 9.81% | |||
In the above illustration, the IRR of Term Insurance + PPF is calculated at 5.56%, and the IRR(Internal Rate of Return i.e. Interest Rate) of Term Insurance + ELSS is at 9.81%.
At the end of 15 years, under PPF you get a maturity benefit of ₹ 17.44 lakhs & the IRR is 5.56%. Here you get better returns when compared to SBI Life Smart Humsafar. Under ELSS, you get a maturity benefit of ₹ 25.23 lakhs. This is a post-tax value.
ELSS are subject to capital gains tax at the time of redemption. The tax calculation is given below.
| ELSS Tax Calculation | |
| Maturity value after 15 years | 26,85,153 |
| Less | |
| Purchase price | 9,64,650 |
| Long-term capital gains | 17,20,503 |
| Exemption limit | 1,00,000 |
| Taxable LTCG | 16,20,503 |
| Tax paid on LTCG | 1,62,050 |
| Maturity value after tax | 25,23,103 |
The IRR for Pure term + ELSS combo is 9.81% (Post-tax return). This is an inflation-beating return & will help in achieving your goals.
There is a wide gap between the SBI Life Smart Humsafar return & the return we get in the above alternate investment. Don’t select an investment blindly, look for the potential risk & return from the product.
SBI Life Smart Humsafar vs SBI Life Smart Future Choices – Review
Both the plans are Individual, Non-Linked, Participating Life Insurance Savings Products.
One of the differences between the two plans is that there are 11 different fund options in the SBI Life Smart Privilege Plan.
Click below to read the complete review with illustrations and IRR (Internal Rate of Return i.e. Interest Rate) analysis to compare the good and bad aspects of both plans.
SBI Life Smart Future Choices Plan Review: Is It a Smart Investment Choice?
SBI Life Smart Humsafar vs SBI Life Smart Privilege Plan – Review
SBI Life Smart Privilege Plan is a ULIP whereas SBI Life Smart Humsafar is an Individual, Non-Linked, Participating Life Insurance Savings Plan.
One of the differences between the two plans is that there are 11 different fund options in the SBI Life Smart Privilege Plan.
Read the complete review with a thorough analysis of the pros and cons to weigh the good & bad aspects of both plans.
How Good or Bad is SBI Life Smart Privilege Plan?– Review 2023
SBI Life Smart Humsafar vs Other Investment Plans – Review Conclusion
We have delved deep into the other alternative investment choices for SBI Life Smart Humsafar and have concluded that a simple Term Insurance + PPF / ELSS seems to be a far better option compared to SBI Life Smart Humsafar.
When we search for new plans for a better investment, it is always wise to decide after a thorough comparison and analysis with other common investment options.
Final Verdict on SBI Life Humsafar – Good or Bad Investment Plan?
SBI Life Smart Humsafar is a joint life insurance that provides a savings option. As the name suggests” Humsafar” the plan is designed to cater to the needs of the couples & thereby try to meet the goals of the family.
Since it is a joint life cover with premium waiver benefit on the first death, a major portion of the annual premium is utilized for Joint life cover & premium waiver rider. The rest is utilised for investment.
SBI Life Smart Humsafar is not worth to be added to your investment basket as the investment return is not satisfactory.
SBI Life Smart Humsafar offers a low sum assured when compared to pure-term policies.
Please be careful when insurance agents try to force you into this plan.
They get a high agent commission for this plan like many policies in the bazaar.
It is advisable to prudently calculate the required life cover for yourself & your spouse (if required). And then buy a term plan, this will protect your investment plan from turmoil.
Select investments based on your personal goals, risk appetite & time horizon. Build a diversified investment portfolio that will help you in achieving all your life goals.
Do you think is it safe to plan your finances by just taking advice from social media sites like Quora, Facebook, Twitter, etc? A professional financial planner can help you with better comprehensive financial planning.
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