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Can the SBI Life Smart Invest Builder Plan truly help you build long-term wealth while protecting your family’s financial future, or do its charges and conditions limit its potential?
Does the SBI Life Smart Invest Builder Plan offer the right combination of market-linked growth and life insurance protection, or are there better alternatives available?
Is the SBI Life Smart Invest Builder Plan genuinely a smart investment choice, or would keeping insurance and investments separate offer greater flexibility and value?
This article takes a closer look at the SBI Life Smart Invest Builder Plan, examining its features, how the bundled approach works, and whether it offers a suitable way to balance life protection with wealth creation.
Table of Contents:
What is the SBI Life Smart Invest Builder?
What are the features of the SBI Life Smart Invest Builder?
Who is eligible for the SBI Life Smart Invest Builder?
What are the benefits of the SBI Life Smart Invest Builder?
What are the fund options of the SBI Life Smart Invest Builder?
What are the charges of the SBI Life Smart Invest Builder?
Grace Period, Discontinuance and Revival of the SBI Life Smart Invest Builder
Free Look Period for the SBI Life Smart Invest Builder
Surrendering the SBI Life Smart Invest Builder
What are the advantages of the SBI Life Smart Invest Builder?
What are the disadvantages of the SBI Life Smart Invest Builder?
Research Methodology of SBI Life Smart Invest Builder
Benefit Illustration – IRR Analysis of SBI Life Smart Invest Builder
SBI Life Smart Invest Builder Vs. Other Investments
SBI Life Smart Invest Builder Vs. Pure Term + PPF/Equity Mutual Fund
Final Verdict on the SBI Life Smart Invest Builder
What is the SBI Life Smart Invest Builder?
SBI Life Smart Invest Builder is an Individual, unit-linked, Non-Participating, Life Insurance, Savings Product.
It provides regular monthly savings through market-linked returns similar to any systematic wealth-building options, while providing life insurance coverage throughout the policy term.
What are the features of the SBI Life Smart Invest Builder?
- Life Protection: Provides life insurance coverage throughout the policy term.
- Guaranteed Additions: Offers guaranteed additions based on the policy term, with longer terms attracting higher additions.
- Additional Maturity Benefit: Provides an additional guaranteed addition at maturity.
- No Policy Administration Charge: No policy administration charges for the first five policy years.
- No Premium Allocation Charge: Premium allocation charges are waived from the 11th policy year onwards.
- Multiple Investment Options: Offers 14 fund options, providing flexibility to choose investments based on individual preferences and risk appetite.
- Partial Withdrawals: Allows unlimited partial withdrawals from the sixth policy year onwards, subject to the policy terms and conditions.
- Systematic Withdrawal Plan (SWP): Enables monthly withdrawals to meet supplementary income needs from the 11th policy year onwards.
- Rider Benefits: Provides the option to enhance insurance coverage by adding eligible riders.
Who is eligible for the SBI Life Smart Invest Builder?
| Minimum | Maximum | |
| Age at Entry | 2 years | 55 years |
| Age at Maturity | 18 years | 70 years |
| Plan | Regular pay/ Limited Pay | |
| Premium payment Term (PPT) & Policy Term (PT) | PT | PPT |
| Regular pay: 15 to 30 years | Same as policy term | |
| Limited Pay: | ||
| 15 to 19 years | 7/10/12 years | |
| 20 to 30 years | 15 years | |
| Annual Premium amount | ₹ 5,000 per month | ₹ 20000 per month |
| Premium Frequency | Monthly | |
| Basic Sum Assured | Regular pay & Limited pay: 10* Annualised premium | |
What are the benefits of the SBI Life Smart Invest Builder?
1. Death benefit
In case of death of the Life Assured during the SBI Life Smart Invest Builder Plan Policy Term, provided all due premiums are paid till date of death, the beneficiary will receive the highest of the following:
- Your Fund Value as on the date of intimation of the death claim to the Company or
- Sum Assured less Applicable Partial Withdrawals (APW), if any or
- 105% of the Total Premiums Paid up to the date of death
2. Maturity Benefit
On survival of the Life Assured up to maturity, provided the SBI Life Smart Invest Builder Plan policy is in-force, the Fund Value as on the date of maturity shall be payable in lump sum.
What are the fund options of the SBI Life Smart Invest Builder?
| S.no | Name of the fund | Equity & Equity Related Instruments | Debt Instruments | Money Market Instruments | Risk Profile |
| 1 | Equity Fund | 80-100% | 0-20% | 0-20% | High |
| 2 | Top 300 Fund | 60-100% | 0-40% | 0-40% | High |
| 3 | Equity Optimiser Fund | 60-100% | 0-40% | 0-40% | High |
| 4 | Growth Fund | 40-90% | 10-60% | 0-40% | Medium High |
| 5 | Balanced Fund | 40-60% | 0-40% | 20-60% | Medium |
| 6 | Bond Fund | – | 60-100% | 0-40% | Low to Medium |
| 7 | Money Market Fund | – | 0-20% | 80-100% | Low |
| 8 | Bond Optimiser Fund | 0-25% | 75%-100% | 0-25% | Low to Medium |
| 9 | Pure Fund | 80-100% | – | 0-20% | High |
| 10 | Midcap Fund | 80-100% | 0-20% | 0-20% | High |
| 11 | Corporate Bond Fund | 70-100% | 0-30% | 0-30% | Low to Medium |
| 12 | Blue chip Fund | 80-100% | 0-20% | 0-20% | High |
| 13 | Flexi cap Fund | 80-100% | 0-20% | 0-20% | High |
| 14 | Large Cap Fund | 80-100% | 0-20% | 0-20% | High |
| Discontinued Policy Fund | – | 60-100% | 0-40% | Low |
What are the charges of the SBI Life Smart Invest Builder?
A. Premium Allocation Charge
This charge shall be deducted from Premiums as they are paid, before allocation of units each time a Premium is received, and shall be as follows:
| Limited Pay | |||||
| Policy Year | Regular Pay | 7 Year PPT | 10 Year PPT | 12 Year PPT | 15 Year PPT |
| 1 | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% |
| 2 | 5.50% | 5.50% | 5.50% | 5.50% | 5.50% |
| 3 | 5.50% | 5.50% | 5.50% | 5.50% | 5.50% |
| 4 | 5.50% | 5.50% | 5.50% | 5.50% | 5.50% |
| 5 | 5.50% | 5.50% | 5.50% | 5.50% | 5.50% |
| 6 | 3.50% | 3.50% | 3.50% | 3.50% | 3.50% |
| 7 | 3.50% | 3.50% | 3.50% | 3.50% | 3.50% |
| 8 | 3.00% | NA | 3.00% | 3.00% | 3.00% |
| 9 | 3.00% | NA | 3.00% | 3.00% | 3.00% |
| 10 | 3.00% | NA | 3.00% | 3.00% | 3.00% |
| 11 onwards | 0.00% | NA | NA | 0.00% | 0.00% |
B. Policy Administration Charge
Policy Administration Charges as stated below shall be deducted by cancelling units at the prevailing unit price on the first business day of each policy month.
| Policy Year | Policy Administration Charge |
| 01 to 05 | Nil |
| 6 onwards | 0.33% of Annualised Premium |
C. Fund Management Charge
| S.no | Name of the fund | Fund Management Charge (p.a.) |
| 1 | Equity Fund | 1.35% |
| 2 | Top 300 Fund | 1.35% |
| 3 | Equity Optimiser Fund | 1.35% |
| 4 | Growth Fund | 1.35% |
| 5 | Balanced Fund | 1.25% |
| 6 | Bond Fund | 1.00% |
| 7 | Money Market Fund | 0.25% |
| 8 | Bond Optimiser Fund | 1.15% |
| 9 | Pure Fund | 1.35% |
| 10 | Midcap Fund | 1.35% |
| 11 | Corporate Bond Fund | 1.15% |
| 12 | Blue Chip Fund | 1.35% |
| 13 | Flexi Cap Fund | 1.35% |
| 14 | Large Cap Fund | 1.35% |
| Discontinued Policy Fund | 0.50% |
D. Discontinuance charges
Discontinuance charges are calculated as a percentage of annualised Premium or Fund Value. It varies according to the year of discontinuance.
E. Mortality Charges
Mortality charges are deducted on the first business day of each policy month from Fund Value by way of cancellation of units. Mortality charges will be based on your age and Sum at Risk at the time of charge deduction.
F. Switching Charge
A charge of ₹ 100 is applicable for every switch, in excess of two free switches in the same policy year during the SBI Life Smart Invest Builder Plan policy term.
G. Partial Withdrawal Charge:
Partial withdrawal in any policy year is free of charge. However, revision of charges, if applicable, would be subject to the prevailing Regulations.
Inference from these charges: Your entire premium is not invested in the chosen fund upfront. A portion is deducted towards various policy charges, and only the remaining amount is allocated to investments. Unlike direct investments in certain market-linked products, these charges can reduce the amount available for wealth creation and, over time, lower the overall returns from your investment.
Grace Period, Discontinuance and Revival of the SBI Life Smart Invest Builder
Grace Period
A grace period of 15 days would be allowed for payment of monthly premiums. The SBI Life Smart Invest Builder Plan policy will remain in force during the grace period.
Discontinuance
If the policy is discontinued during the Lock-in Period (i.e. during the first 5 policy years): the fund value after deducting the applicable discontinuance charges shall be credited to the Discontinued Policy Fund and the risk cover and rider cover, if any, shall cease. The discontinuance fund value as on the end of the revival period or lock-in period, whichever is later.
If the policy is discontinued after the Lock-in Period (i.e. after the first 5 policy years): the policy will be converted into a reduced paid-up policy. Paid – Up Sum Assured will be calculated as original sum assured multiplied by a ratio of “total period for which premiums have already been paid” to the “maximum period for which premiums were originally payable”. The fund value as on the end of the revival period or the date of maturity, whichever is earlier, would be paid to you and the contract would be terminated.
Revival
You can revive the SBI Life Smart Invest Builder Plan policy within the revival period of 3 consecutive complete years from the date of first unpaid premium, during which you can revive your policy by paying all due premiums without any interest or fee.
Free Look Period for the SBI Life Smart Invest Builder
You have a free look period of 30 days beginning from the date of the receipt of the policy document, whether received electronically or otherwise, to review the terms and conditions of the policy.
In the event you disagree with any of the SBI Life Smart Invest Builder Plan policy terms and conditions, or otherwise and have not made any claim, you have the option to return the policy to the Company for cancellation, stating the reason for the same
Surrendering the SBI Life Smart Invest Builder
If surrender is requested during the first 5 Policy years: Your Fund Value after deduction of applicable discontinuance charge (if any) will be transferred to the ‘Discontinued Policy Fund’. Fund Management Charge of the Discontinued Policy Fund shall be deducted. No other charge will be deducted. Risk cover will cease to apply. The Surrender Value will be payable on the 1st working day of the 6th policy year, and the policy will terminate.
If the surrender is requested any time after completion of 5 policy years, then the Fund Value will be paid, and the SBI Life Smart Invest Builder Plan policy will terminate
What are the advantages of the SBI Life Smart Invest Builder?
- Guaranteed Additions: Earn guaranteed additions for opting for a longer policy term.
- Death Benefit Settlement Option: In the event of the life assured’s death, the nominee can choose to receive the death benefit in instalments over the settlement period.
- Systematic Withdrawal Facility: Allows systematic withdrawals during the policy term from the 11th policy year onwards.
- Fund Switching Facility: Offers the flexibility to switch investments among 14 available funds to align with changing investment needs and risk preferences.
- Premium Redirection: Allows future premiums to be redirected to different funds from the second policy year onwards, based on changing investment preferences.
What are the disadvantages of the SBI Life Smart Invest Builder?
- Limited Liquidity: The plan does not permit partial withdrawals during the first five policy years, restricting access to your invested funds during this period.
- No Loan Facility: The policy does not offer a loan facility against the investment.
- Repetitive Fund Options: The asset allocation across the available funds appears similar, limiting meaningful differentiation between the investment options.
- Inadequate Life Cover: The sum assured may be insufficient to meet the family’s financial protection needs.
- Limited Premium Payment Flexibility: Premiums can be paid only in monthly instalments, which may be inconvenient for investors who prefer other payment frequencies.
- Impact of Charges on Returns: Multiple policy charges reduce the amount available for investment, potentially affecting overall returns and limiting wealth-creation potential.
Research Methodology of SBI Life Smart Invest Builder
In this section, we will evaluate the returns generated by the SBI Life Smart Invest Builder Plan to compare its performance with other investment instruments and help investors make informed financial decisions.
For this analysis, we will calculate the Internal Rate of Return (IRR) using the benefit illustration provided in the policy brochure.
Benefit Illustration – IRR Analysis of SBI Life Smart Invest Builder
Consider a 25-year-old male who purchases the SBI Life Smart Invest Builder Plan with a policy term of 30 years and a premium-paying term of 12 years.
He pays a monthly premium of ₹10,000 (annual premium of ₹1,20,000) and opts for a sum assured of ₹12,00,000.
| Male | 25 years |
| Sum Assured | ₹ 12,00,000 |
| Policy Term | 30 years |
| Premium Paying Term | 12 years |
| Annualised Premium | ₹ 1,20,000 |
The policyholder pays premiums for the first 12 years, while the accumulated fund value is payable at the end of the 30-year policy term.
The brochure illustrates returns at 4% and 8%; these rates are not guaranteed and do not represent the minimum or maximum possible returns under the SBI Life Smart Invest Builder Plan policy.
| At 4% p.a. | At 8% p.a. | ||||
| Age | Year | Annualised premium / Maturity benefit | Death benefit | Annualised premium / Maturity benefit | Death benefit |
| 25 | 1 | -1,20,000 | 12,00,000 | -1,20,000 | 12,00,000 |
| 26 | 2 | -1,20,000 | 12,00,000 | -1,20,000 | 12,00,000 |
| 27 | 3 | -1,20,000 | 12,00,000 | -1,20,000 | 12,00,000 |
| 28 | 4 | -1,20,000 | 12,00,000 | -1,20,000 | 12,00,000 |
| 29 | 5 | -1,20,000 | 12,00,000 | -1,20,000 | 12,00,000 |
| 30 | 6 | -1,20,000 | 12,00,000 | -1,20,000 | 12,00,000 |
| 31 | 7 | -1,20,000 | 12,00,000 | -1,20,000 | 12,00,000 |
| 32 | 8 | -1,20,000 | 12,00,000 | -1,20,000 | 12,00,000 |
| 33 | 9 | -1,20,000 | 12,00,000 | -1,20,000 | 12,00,000 |
| 34 | 10 | -1,20,000 | 12,00,000 | -1,20,000 | 12,00,000 |
| 35 | 11 | -1,20,000 | 12,00,000 | -1,20,000 | 12,00,000 |
| 36 | 12 | -1,20,000 | 12,00,000 | -1,20,000 | 12,00,000 |
| 37 | 13 | 0 | 12,00,000 | 0 | 12,00,000 |
| 38 | 14 | 0 | 12,00,000 | 0 | 12,00,000 |
| 39 | 15 | 0 | 12,00,000 | 0 | 12,00,000 |
| 40 | 16 | 0 | 12,00,000 | 0 | 12,00,000 |
| 41 | 17 | 0 | 12,00,000 | 0 | 12,00,000 |
| 42 | 18 | 0 | 12,00,000 | 0 | 12,00,000 |
| 43 | 19 | 0 | 12,00,000 | 0 | 12,00,000 |
| 44 | 20 | 0 | 12,00,000 | 0 | 12,00,000 |
| 45 | 21 | 0 | 12,00,000 | 0 | 12,00,000 |
| 46 | 22 | 0 | 12,00,000 | 0 | 12,00,000 |
| 47 | 23 | 0 | 12,00,000 | 0 | 12,00,000 |
| 48 | 24 | 0 | 12,00,000 | 0 | 12,00,000 |
| 49 | 25 | 0 | 12,00,000 | 0 | 12,00,000 |
| 50 | 26 | 0 | 12,00,000 | 0 | 12,00,000 |
| 51 | 27 | 0 | 12,00,000 | 0 | 12,00,000 |
| 52 | 28 | 0 | 12,00,000 | 0 | 12,00,000 |
| 53 | 29 | 0 | 12,00,000 | 0 | 12,00,000 |
| 54 | 30 | 0 | 12,00,000 | 0 | 12,00,000 |
| 55 | 25,92,109 | 64,58,863 | |||
| IRR | 2.41% | 6.22% | |||
- At a 4% assumed rate of return: The projected maturity fund value is ₹25.92 lakh, translating into an IRR of 2.41% as per the SBI Life Smart Invest Builder Plan maturity calculator.
- At an 8% assumed rate of return: The projected maturity fund value is ₹64.58 lakh, translating into an IRR of 6.22% as per the SBI Life Smart Invest Builder Plan maturity calculator.
Despite the long 30-year investment horizon, the returns under both scenarios raise concerns about the plan’s wealth-creation potential.
The IRR in the 4% scenario is particularly low, while even the 8% scenario produces a return that may not adequately compensate investors for the risks associated with market-linked investments.
Therefore, the SBI Life Smart Invest Builder Plan may not be an attractive choice for long-term wealth accumulation.
Investors should evaluate its projected returns against alternative investment options, taking into account the associated risks, charges, liquidity constraints, and their long-term financial goals.
SBI Life Smart Invest Builder Vs. Other Investments
Several investment options offer greater flexibility and potentially better returns than the SBI Life Smart Invest Builder Plan.
In this section, we will evaluate an alternative strategy that separates life insurance from wealth creation by combining a pure term insurance policy with independent investments.
SBI Life Smart Invest Builder Vs. Pure Term + PPF/Equity Mutual Fund
For a fair comparison, we will use the same assumptions as in the earlier illustration.
A pure term insurance policy providing life cover of ₹12 lakh costs ₹8,400 annually, with a policy term of 30 years and a premium-paying term of 10 years.
| Pure Term Life Insurance Policy | |
| Sum Assured | ₹ 12,00,000 |
| Policy Term | 30 years |
| Premium Paying Term | 10 years |
| Annualised Premium | ₹ 8,400 |
| Investment | ₹ 1,11,600 |
First 10 years: An annual term insurance premium of ₹8,400 is paid, and the remaining ₹1,11,600 is invested. Next 2 years: The entire annual amount of ₹1.20 lakh is invested, as the term insurance premium has already been paid for the stipulated premium-paying period.
| Term Insurance + PPF | Term insurance + Equity Mutual Fund | ||||
| Age | Year | Term Insurance premium + PPF | Death benefit | Term Insurance premium + Equity Mutual Fund | Death benefit |
| 25 | 1 | -1,20,000 | 12,00,000 | -1,20,000 | 12,00,000 |
| 26 | 2 | -1,20,000 | 12,00,000 | -1,20,000 | 12,00,000 |
| 27 | 3 | -1,20,000 | 12,00,000 | -1,20,000 | 12,00,000 |
| 28 | 4 | -1,20,000 | 12,00,000 | -1,20,000 | 12,00,000 |
| 29 | 5 | -1,20,000 | 12,00,000 | -1,20,000 | 12,00,000 |
| 30 | 6 | -1,20,000 | 12,00,000 | -1,20,000 | 12,00,000 |
| 31 | 7 | -1,20,000 | 12,00,000 | -1,20,000 | 12,00,000 |
| 32 | 8 | -1,20,000 | 12,00,000 | -1,20,000 | 12,00,000 |
| 33 | 9 | -1,20,000 | 12,00,000 | -1,20,000 | 12,00,000 |
| 34 | 10 | -1,20,000 | 12,00,000 | -1,20,000 | 12,00,000 |
| 35 | 11 | -1,20,000 | 12,00,000 | -1,20,000 | 12,00,000 |
| 36 | 12 | -1,18,500 | 12,00,000 | -1,20,000 | 12,00,000 |
| 37 | 13 | -500 | 12,00,000 | 0 | 12,00,000 |
| 38 | 14 | -500 | 12,00,000 | 0 | 12,00,000 |
| 39 | 15 | -500 | 12,00,000 | 0 | 12,00,000 |
| 40 | 16 | 0 | 12,00,000 | 0 | 12,00,000 |
| 41 | 17 | 0 | 12,00,000 | 0 | 12,00,000 |
| 42 | 18 | 0 | 12,00,000 | 0 | 12,00,000 |
| 43 | 19 | 0 | 12,00,000 | 0 | 12,00,000 |
| 44 | 20 | 0 | 12,00,000 | 0 | 12,00,000 |
| 45 | 21 | 0 | 12,00,000 | 0 | 12,00,000 |
| 46 | 22 | 0 | 12,00,000 | 0 | 12,00,000 |
| 47 | 23 | 0 | 12,00,000 | 0 | 12,00,000 |
| 48 | 24 | 0 | 12,00,000 | 0 | 12,00,000 |
| 49 | 25 | 0 | 12,00,000 | 0 | 12,00,000 |
| 50 | 26 | 0 | 12,00,000 | 0 | 12,00,000 |
| 51 | 27 | 0 | 12,00,000 | 0 | 12,00,000 |
| 52 | 28 | 0 | 12,00,000 | 0 | 12,00,000 |
| 53 | 29 | 0 | 12,00,000 | 0 | 12,00,000 |
| 54 | 30 | 0 | 12,00,000 | 0 | 12,00,000 |
| 55 | 74,55,885 | 2,06,16,167 | |||
| IRR | 6.83% | 11.18% | |||
For wealth accumulation, we consider two investment alternatives based on the investor’s risk appetite: a Public Provident Fund (PPF) for a conservative approach and an equity mutual fund for an investor willing to accept market risk.
1. PPF – Low-Risk Investment Option
PPF has a 15-year maturity period and requires a minimum annual contribution of ₹500.
Since the original illustration assumes a 12-year investment contribution period, the investment schedule has been adjusted to comply with PPF rules. Under the assumptions used, the projected maturity value is ₹74.55 lakh, with an IRR of 6.83%.
2. Equity Mutual Fund – Market-Linked Investment Option
Under the equity mutual fund strategy, the projected investment value at the end of the investment horizon is ₹2.33 crore before capital gains tax.
After accounting for the applicable tax, the estimated maturity value is ₹2.06 crore, translating into a post-tax IRR of 11.18% for the combined term insurance and equity mutual fund strategy.
| Equity Mutual Fund Tax Calculation | |
| Maturity value after 30 years | 2,33,49,763 |
| Purchase price | 13,56,000 |
| Long-Term Capital Gains | 2,19,93,763 |
| Exemption limit | 1,25,000 |
| Taxable LTCG | 2,18,68,763 |
| Tax paid on LTCG | 27,33,595 |
| Maturity value after tax | 2,06,16,167 |
The comparison illustrates how separating insurance from investments can provide greater flexibility and potentially improve wealth-creation outcomes.
While the PPF option caters to investors with a lower risk appetite, the equity mutual fund option offers higher long-term growth potential, albeit with market risk.
Unlike the SBI Life Smart Invest Builder Plan, this approach allows investors to manage their insurance and investment decisions independently.
Equity mutual fund investments generally offer greater liquidity, subject to applicable exit loads and tax implications, while PPF withdrawals are subject to prescribed lock-in and withdrawal rules.
Final Verdict on the SBI Life Smart Invest Builder
The SBI Life Smart Invest Builder Plan requires you to pay premiums for a limited period, with the accumulated fund value payable at the end of the policy term.
However, it is essentially a ULIP with multiple charges that can affect overall returns.
Moreover, the available fund options appear repetitive, offering limited differentiation in asset allocation for investors with varying risk appetites.
One of the primary objectives of investing in market-linked instruments is to generate returns that outpace inflation and help achieve long-term financial goals.
However, the returns illustrated under the SBI Life Smart Invest Builder Plan may not be compelling enough to justify the associated investment risks and it also has a high agent commission.
Additionally, the sum assured may be inadequate to meet your family’s life insurance needs. Therefore, combining life insurance with market-linked investments in a single product may not be the most effective strategy.
A better approach is to separate insurance from investments. Choose a pure term life insurance policy to secure adequate life cover, and focus on building a diversified investment portfolio to achieve your future financial goals.
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Consulting a qualified financial advisor can help you develop a personalised financial plan aligned with your risk appetite, financial goals, and investment time horizon, enabling you to make informed decisions and work towards long-term financial security.
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