An In-depth Research Analysis on SBI Life Smart Insure Wealth Plus.

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Will the SBI Life Smart Insure Wealth Plus plan build your wealth while protecting your loved ones?

As you keep progressing in life, your goals and ambitions will also grow along with it.

Achieving your aspirations while empowering your family’s financial stability is essential. To help you achieve your Financial Stability you need adequate life cover.

Should you look to invest in SBI Life Smart Insure Wealth Plus for adequate life cover and higher returns?

In this article let us review the SBI Life Smart Insure Wealth Plus Plan’s Advantages (Pros), Disadvantages (Cons), and Investment Strategy. This research analysis will help you know the plan and also make wise investment decisions.

SBI Life Smart Insure Wealth Plus Benefit Illustration – IRR Analysis

13.) Comparing SBI Life Smart Insure Wealth Plus with Other Investment

SBI Life Smart Insure Wealth Plus Vs Pure Term + PPF / ELSS
SBI Life Smart Insure Wealth Plus Plan VS SBI Life Smart Annuity Plus Plan.
SBI Life Smart Insure Wealth Plus Plan VS SBI Life Smart Swadhan Plus Plan.

14.) Final Verdict on SBI Life Smart Insure Wealth Plus

1.) What is SBI Life Smart Insure Wealth Plus?

SBI Life Smart Insure Wealth Plus is an Individual, Unit Linked, Non-Participating Life Insurance Product.

This is a monthly savings plan which helps you build your savings gradually brick by brick by allocating money every month, in a disciplined manner.

This mode of savings will aid in navigating through the ups and downs of the market most efficiently.

2.) What are the Features of SBI Life Smart Insure Wealth Plus?

3 investment strategies to suit your needs.
Easy Monthly premium payment.
9 Fund Options under the Smart Choice strategy.
Return of Mortality Charges on maturity.
Fund Value Boosters through loyalty additions from the 11^th Policy Year Onwards.
Systematic Monthly Withdrawal to facilitate regular payouts.

3.) What are the Eligibility Criteria for SBI Life Smart Insure Wealth Plus?

	Minimum	Maximum
Age at Entry	30 days	55 years
Age at Maturity	18 years	65 years
Plan type	Regular type
Policy Term	10, 15, 20 and 25 years
Premium Payment Term (PPT)	Same as the policy term
Premium Amount	Rs. 4000	No Limit
Basic Sum Assured	Annualised premium * 10

4.) What are the Benefits of SBI Life Smart Insure Wealth Plus?

SBI Life Smart Insure Wealth Plus Death Benefit

On the death of the Life Assured, the company will pay the Higher of:

The Fund Value as on the date of intimation of death to the company, or
Sum assured less Applicable Partial Withdrawal (APW), or
105% of the total premiums received up to the date of death less Applicable Partial Withdrawal (APW)

SBI Life Smart Insure Wealth Plus Maturity Benefit

When the SBI Life Smart Insure Wealth Plus matures, you will receive fund value calculated at the prevailing NAV on the maturity date along with the Return of Mortality Charges paid in a lump sum.

5.) Investment Strategies and Fund Options of SBI Life Smart Insure Wealth Plus

You can choose from 3 investment strategies:

i) Trigger Strategy:

In this Investment Strategy, your premiums will be invested in 80:20 proportions in the Equity Fund and Corporate Bond Fund respectively.

If the NAV of the Equity Fund differs more than 15% (up or down) at any point in time, then the Equity Fund will automatically get re-distributed amongst the 2 funds i.e., Equity Fund and Corporate Bond Fund, in the ratio of 80:20, without any charges.

ii) Auto Asset Allocation Strategy:

Your premiums are invested across Equity Fund, Corporate Bond Fund, and Money Market Fund. The percentage of investments would be as per the range given below, depending on the term to maturity:

iii ) Smart Choice Strategy:

Based on your risk appetite and the objective of your investment, you can choose from the 9 fund options given below under the Smart Choice Strategy plan. The proportion of these investments for various funds is as follows:

Name of the fund	Equity & Equity Related Instruments	Debt Instruments	Money Market Instruments	Risk Profile
Pure Fund	80-100%	NIL	0-20%	High
Mid-cap Fund	80-100%	0-20%	0-20%	High
Bond Optimiser Fund	0-25%	0-25%	75-100%	Low to Medium
Balanced Fund	40-60%	0-40%	20-60%	Medium
Equity Optimiser Fund	60-100%	0-40%	0-40%	High
Equity Fund	80-100%	0-20%	0-20%	High
Growth Fund	40-90%	10-60%	0-40%	Medium High
Money Market Fund	NIL	0-20%	80-100%	Low
	Corporate Bond	Debt Instruments	Money Market Instruments
Corporate Bond Fund	70-100%	0-30%	0-30%	Low to Medium
		Government Securities	Money Market Instruments
Discontinued Policy Fund		60-100%	0-40%	Low

6.) Charges under SBI Life Smart Insure Wealth Plus

Premium Allocation Charge:

The Premium Allocation Charge varies according to the policy year.

Policy year	Premium Allocation charge
1	8%
2 to 5	6%
6 to 10	4%
11 to 25	3%

Policy Administration Charges:

The Policy Administration Charge of SBI Life Smart Insure Wealth Plus depends on the policy year.

Policy year	Policy Administration Charges
1 to 5	NIL
6 to 25	150 per month

Fund Management Charges:

SBI Life Smart Insure Wealth Plus Fund Management Charge varies according to the fund chosen.

Fund Name	Fund Management Charges
Equity Fund	1.35%
Equity Optimizer Fund	1.35%
Growth Fund	1.35%
Balanced Fund	1.25%
Bond Optimiser Fund	1.15%
Corporate Bond Fund	1.15%
Pure Fund	1.35%
Midcap Fund	1.35%
Money Market Fund	0.25%
Discontinued Policy Fund	0.50%

Discontinuance Charges:

Discontinuance charges are expressed as a percentage of one Annualized Premium or Fund Value. It depends on the year of discontinuance and the premium amount.

Switching Charges:

This product enables you to switch funds with ease at your convenience. The Switching Charges would be subject to a cap of ₹ 500 per Switch.

Premium Redirection Charges:

Unlimited Premium Redirection can be done very easily. The Premium Redirection Charges would be subject to a cap of ₹ 500 per transaction.

Partial Withdrawal Charges:

A charge of ₹ 100 is applicable for every partial withdrawal over one free partial withdrawal per policy year during 6-10 policy years.

Mortality Charges:

Mortality charges are deducted on the first working day of each policy month. It will be based on your age and Sum at Risk at the time of charge deduction.

Inference from these charges

The plan levies numerous charges and these charges will pull down the returns in the long run.

Though you get an opportunity to invest in the market, your returns gained are not proportionate to the risk undertaken. Risk-Adjusted Return is missing from SBI Life Smart Insure Wealth Plus due to its hefty charges.

7.) SBI Life Smart Insure Wealth Plus Grace period, Discontinuance and Revival

Grace Period

You will have a grace period of 15 days from the due date for premium payment.

Discontinuance of Policy

If the 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 the risk cover shall cease.

The policyholder has an option to revive or surrender the policy. 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.

Revival

The 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 without any interest or fee.

8.) Free Look Period in SBI Life Smart Insure Wealth Plus

In case you disagree with any of the terms and conditions, you have the option to return the policy, within 15 days for policies purchased through channels other than Direct Marketing, for electronic policies (30 days for policies sold through distance marketing electronic policies), from the date of the receipt of the policy document.

For more clarification, you can refer to SBI Life Smart Insure Wealth Plus Policy Brochure

9.) Surrendering SBI Life Smart Insure Wealth Plus

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 6^th policy year the policy will terminate.

If you surrender after the completion of the first 5 policy years, the fund value is payable immediately the policy will terminate.

10.) Advantages of SBI Life Smart Insure Wealth Plus

An automated partial withdrawal facility called Systematic Monthly Withdrawal is available to the policyholder.
Under smart choice investment strategies, you can switch between the 9 funds available.
A Loyalty Addition of 0.3% of the fund value is added every year from the 11^th policy year.
The nominee may choose to get the death benefit payments in installments.
On the maturity date, the total amount of mortality charges deducted in respect of life cover provided throughout the policy term will be paid back to you.

11.) Disadvantages of SBI Life Smart Insure Wealth Plus

The lock-in period is 5 years.
No loan facility is available.
Though the plan pays back the mortality charges, the time value of money is not considered.

12.) SBI Life Smart Insure Wealth Plus Research Methodology

This review analysis so far covered the basic features and the workings of the plan. Next, we will be analysing the SBI Life Smart Insure Wealth Plus plan in terms of returns.

Calculation of return on investment helps to compare the plan with other similar investments.

SBI Life Smart Insure Wealth Plus Benefit Illustration – IRR Analysis

We have taken a quote from the SBI portal for the calculation of the Internal Rate of Return (IRR).

A 30-year-old male has opted for the SBI Life- Smart Insure Wealth Plus policy for a payment term of 15 years with a Basic Sum Assured of ₹ 12 lakh. He is paying a premium of ₹ 10,000 per month.

He chooses for 100% Equity Fund under the Smart Choice Strategy. Let’s see how the benefits are under this plan.

Male	30 years
Sum Assured	12 Lakhs
Policy Term	15 years
Premium paying Term	15 years
Premium	10,000
Premium paying Mode	Monthly

If he pays the premium regularly, he will get the fund value at the end of 15 years.

In the below benefit illustration, the assumed gross returns are 8% p.a. and 4% p.a respectively. These assumed rates of returns are not guaranteed.

So, you should not interpret that the returns under the plan are going to be either 8% p.a. or 4% p.a.

	Amount Invested	Fund Value	IRR
At 4%	18,00,000	20,37,748	1.63%
At 8%	18,00,000	27,86,316	5.58%

The fund value at the assumed rate of 4% is 20.37 Lakhs and the IRR for the same is 1.63%. The fund value at the 8% scenario is 27.86 Lakhs and the IRR for the same is 5.58%.

SBI Life Smart Insure Wealth Plus invests in market-related securities, but the yield is lower than even a debt instrument’s return. This IRR analysis shows that the risk-return is not proportionate.

13.) Comparing SBI Life Smart Insure Wealth Plus with Other Investment

In the long run, investing in SBI Life Smart Insure Wealth Plus will not help you reach your milestone.

Now, let us compare the returns that we calculated in the earlier section with other alternate investment returns.

The monthly premium of ₹10,000 could be invested in other better-yielding instruments. Before that, we need a life cover.

In the earlier illustration, the sum assured is ₹ 12 lakhs. Let us take a pure term life insurance policy with monthly premium payments and invest the balance amount monthly.

i) SBI Life Smart Insure Wealth Plus Vs Pure Term + PPF / ELSS

A pure term life insurance for 12 Lakh Sum assured would cost a monthly premium of ₹ 450. So, the balance amount of ₹ 9550 could be invested based on your preference.

Pure Term Insurance Policy
Sum Assured	12 Lakhs
Policy Term	15 years
Premium paying Term	15 years
Premium	450
Premium paying Mode	Monthly
Investment	9,550

Other Investments could be a market-linked product similar to SBI Life Smart Insure Wealth Plus. Or else, you can stick with a debt instrument. For 15 years, you can invest ₹ 9550 per month.

	Amount Invested	Fund Value	IRR
PPF (Debt)	18,00,000	30,13,674	6.54%
ELSS (Equity) (Post-tax)	18,00,000	42,72,530	10.73%

Maturity value after 15 years	45,45,145
Less
Purchase price	17,19,000
Long -Term capital gains	28,26,145
Exemption limit	1,00,000
Taxable LTCG	27,26,145
Tax paid on LTCG	2,72,614
Maturity value after tax	42,72,530

PPF account matures after 15 years and the final maturity value is ₹ 30.13 Lakhs. The IRR for Pure term + PPF combo is 6.54%. The ELSS fund pre-tax maturity value is ₹ 45.45 Lakhs.

After setting aside the capital gains tax, the post-tax maturity value is ₹ 42.72 Lakhs. The IRR for Pure Term and ELSS combo is 10.73% (post-tax return).

This IRR comparison, helps you to figure out how different product works. You can generate better returns in these alternate investments.

SBI Life Smart Insure Wealth Plus earns less than a Debt Instrument Return. The risk and return are in proportion. Also, with the returns from SBI Life Smart Insure Wealth Plus you can’t combat inflation in the long run.

ii) SBI Life Smart Insure Wealth Plus Plan VS SBI Life Smart Annuity Plus Plan.

SBI Life Smart Annuity Plus is a hassle-free single premium investment vehicle where the investment earns you regular returns. You can choose from a wide range of Annuity Options.

If you are curious about this plan, then you can refer to our article on SBI Life Smart Annuity Plus: Good or Bad? A Comprehensive Analysis Review

iii) SBI Life Smart Insure Wealth Plus Plan VS SBI Life Smart Swadhan Plus Plan.

In SBI Life Smart Swadhan Plus Plan the Premium Paying Term Policy Term can be chosen at your convenience. Also, 100% of the total premium will be returned to the investor at the time of maturity.

To check whether this policy suits your Financial Needs and Requirements,
you can refer to the article on SBI Life Smart Swadhan Plus Review – Good or Bad?

14.) Final Verdict on SBI Life Smart Insure Wealth Plus

SBI Life Smart Insure Wealth Plus allows investors to invest every month. There are no other frequency modes for premium payment other than monthly mode.

The plan allows you to get the fund value at maturity or through monthly installments.

SBI Life Smart Insure Wealth doesn’t help in the wealth accumulation process. For long-term goals, you may well fall short of the required corpus if you invest in this plan.

The reason behind this is hefty charges and high agent commission paid. This is similar to any other ULIP plan which is available in the market. The monthly premium payment and receiving the benefits in installment is available in any other traditional policies.

On the whole, the returns and insurance coverage are not satisfactory for an investor. Alternatively, you can buy adequate life cover through a Pure Term life insurance policy and invest separately based on your life goals.

This strategy helps to beat inflation in the long run.

Please do not assume that just with the help of social media sites like Quora, Facebook, Twitter, etc you can create a Proper Financial Planning.

Consulting a Certified Financial Planner to draft a goal-based financial plan is very important for your Financial Goals.