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Most of your life is spent fulfilling the financial dreams of your family.
While fulfilling this responsibility, your financial aspirations may take a back seat. To pursue your aspiration, you need additional income.
Will SBI Life Smart Lifetime Saver Plan aid you in fulfilling your financial aspirations?
This detailed analysis will take you through the basic details & returns analysis of the SBI Life Smart Lifetime Saver Plan.
Table of Contents:
1.)What is SBI Life Smart Lifetime Saver Plan?
2.)Features of the SBI Life Smart Lifetime Saver Plan
3.)Eligibility Criteria for the SBI Life Smart Lifetime Saver Plan
4.)Benefits under the SBI Life Smart Lifetime Saver Plan
- Survival Income
- Maturity Benefit
- Death Benefit
5.)The Grace Period, Lapse, Reduced Paid-up & Revival of the SBI Life Smart Lifetime Saver Plan
6.)Free Look-Up Period of the SBI Life Smart Lifetime Saver Plan
7.)Surrendering the SBI Life Smart Lifetime Saver Plan
8.)Advantages of the SBI Life Smart Lifetime Saver Plan
9.)Disadvantages of the SBI Life Smart Lifetime Saver Plan
10.)Research Methodology
11.)IRR Analysis of the SBI Life Smart Lifetime Saver Plan
12.)SBI Life Smart Lifetime Saver Plan Vs. Other Investment Options
13.)SBI Life Smart Lifetime Saver Plan Vs. Pure Term Insurance + ELSS/PPF
14.) Final Verdict on the SBI Life Smart Lifetime Saver Plan
What is SBI Life Smart Lifetime Saver Plan?
It is an Individual, Non-Linked, Participating (PAR), Whole Life Insurance, Savings product.
With this comprehensive plan, you get regular guaranteed and non-guaranteed income in the form of a Cash Bonus, if declared, that helps plan your legacy while enjoying protection for a lifetime.
Features of the SBI Life Smart Lifetime Saver Plan
- Life cover till the age of 100.
- Choice of 3 premium payment terms: 10, 12 & 15 years.
- Lump sum maturity benefit is the Total Annualized Premiums payable under the policy.
- Guaranteed Survival Income starting from the end of the Premium Payment Term.
- Additional Non-Guaranteed Survival Income (Cash Bonus), if declared, starting from the end of 7 policy years.
- Option to accumulate survival incomes.
- Two optional riders are available.
Eligibility Criteria for the SBI Life Smart Lifetime Saver Plan
The basic working of this plan is given at a glance below;
|
Age at Entry |
Minimum: |
|
Maximum Age at Maturity |
100 |
|
Policy Term |
100 |
|
Premium paying term |
5 |
|
Premium Frequency |
Yearly, |
|
Annualized Premium (in |
Minimum |
|
Minimum Basic Sum Assured |
10 |
|
Riders |
Accidental |
Benefits under the SBI Life Smart Lifetime Saver Plan
Survival Income
Guaranteed Survival Income:
On survival of the life assured and provided all premiums which have fallen due are paid, this will be paid at the end of each policy year starting from the end of the premium payment term, till surrender, death or maturity, whichever is earlier.
Guaranteed Survival Income is the Guaranteed Income Rate multiplied by the Basic Sum Assured.
Non-Guaranteed Survival Income (Cash Bonus):
On survival of the life assured and provided all premiums which have fallen due are paid, in addition to the Guaranteed Survival Income, this will be paid at the end of each policy year starting from the end of the 7th policy year till surrender, death or maturity, whichever is earlier.
Non-Guaranteed Survival income (Cash Bonus) will be equal to the Cash bonus rate, if declared, multiplied by the Basic Sum Assured.
An option to defer and accumulate the Guaranteed Survival Income and/or Non-Guaranteed Survival Income (Cash Bonus), if declared, and withdraw the same along with applicable interest is available during the policy term.
Maturity Benefit
On survival of the life assured till the end of the policy term, the following is payable in lumpsum:
- Guaranteed Sum Assured on Maturity plus a Terminal bonus if declared.
- Additionally, accumulated deferred survival income, if any will be paid.
On maturity of the policy, the policy will terminate and no further benefits will be payable.
Death Benefit
On Death of the life assured, during the policy term the following will be paid to the nominee. Higher of:
- Sum Assured on Death + Guaranteed Survival Income, if any +Interim Non-Guaranteed Survival Income (Interim Cash Bonus), if declared; + Terminal bonus, if declared; or
- 105% of the Total Premiums Paid up to the date of death.
- Additionally, accumulated deferred survival income, if any will be paid.
The Grace Period, Lapse, Reduced Paid-up & Revival of the SBI Life Smart Lifetime Saver Plan
Grace period
A grace period of 30 days from the premium due date will be allowed for payment of yearly and half-yearly premiums and 15 days for monthly premiums.
Lapse
If the first two full policy years’ premiums have not been paid, the policy shall lapse without acquiring paid-up benefits after the expiry of the grace period from the date of the first unpaid premium.
All the benefits under the policy shall cease and no benefit shall be payable under the policy.
Reduced Paid-up policy
The policy acquires paid-up benefits only if the first 2 full policy years’ premiums have been paid. All the benefits will be reduced in proportion to the number of premiums paid so far by the total number of premiums payable under the policy.
Revival
If premiums are not paid within the grace period and the policy is not surrendered, the policy may be revived for full benefits within a revival period equal to five consecutive years from the date of the first unpaid premium
Free Look-Up Period of the SBI Life Smart Lifetime Saver Plan
If you disagree with any of the terms and conditions SBI Life Smart Lifetime Saver Policy, then you have the option to return the policy within a period of 15 days (30 days in case the policy is sold through distance mode and electronic policies) from the date of receipt of the policy document.
Surrendering the SBI Life Smart Lifetime Saver Plan
The SBI Life Smart Lifetime Saver Policy acquires surrender value provided at least the first 2 full policy years’ premiums have been paid. The policyholder may surrender an in-force or reduced paid-up policy.
On surrender, the higher of the Guaranteed Surrender Value (GSV) and Special Surrender Value (SSV) will be paid. Accumulated deferred survival income, if any and interim survival income, if any will also be added to the Surrender value.
Advantages of the SBI Life Smart Lifetime Saver Plan
- Premium Paying Term & Premium Paying Frequency can be chosen as per convenience.
- Death Benefit available throughout the policy term i.e., till age 100 years.
- Flexibility to accumulate the Survival Income & can withdraw it at any time during the policy term.
- Tax benefit as per Sec 80C.
Disadvantages of the SBI Life Smart Lifetime Saver Plan
- The survival benefit has both guaranteed & non-guaranteed components. So, you can’t earmark any of your expenses.
- Though it offers protection for the whole life, the life cover is inadequate.
- The survival income (guaranteed benefit) is reduced after a gap of every 30 years till maturity. Any survival income should be increased to adjust to inflation but here it works in reverse.
- No loan facility is available.
You can refer to the SBI Life Smart Lifetime Saver Policy Brochure for further details.
Research Methodology
The SBI Life Smart Lifetime Saver Plan offers a lifetime survival benefit & life cover. So, let us estimate how beneficial to you in terms of returns.
For, this we have taken an illustration given in the policy brochure.
Let us work out the Internal Rate of Return for this policy. This return can be compared with other investment products as we proceed with our analysis.
IRR Analysis of the SBI Life Smart Lifetime Saver Plan
Let us assume that a 45-year-old male buys the SBI Life Smart Lifetime Saver Plan with a 15-year premium paying term. The annual premium is ₹ 3 Lakhs. The non-guaranteed benefit starts at the end of the 7th year. The guaranteed benefit starts after the premium paying term. Let us work out the IRR for this cash flow.
|
Age |
45 years Male |
|
Policy Term |
100-45=55 years |
|
Premium Paying term |
15 years |
|
Annualised premium |
3 lakhs |
The non-guaranteed benefit depends on the bonus rate declared each year. The assumed rates of returns @4% and @8% p.a.
The bonus rates are assumed constant during the bonus accrual period, whereas the actual bonus could vary, depending on the investment experience of the Company.
|
At |
At |
||||
|
Age |
Year |
Annualised |
Death |
Annualised |
Death |
|
45 |
1 |
-3,00,000 |
36,00,000 |
-3,00,000 |
36,00,000 |
|
46 |
2 |
-3,00,000 |
36,00,000 |
-3,00,000 |
36,00,000 |
|
47 |
3 |
-3,00,000 |
36,00,000 |
-3,00,000 |
36,00,000 |
|
48 |
4 |
-3,00,000 |
36,00,000 |
-3,00,000 |
36,00,000 |
|
49 |
5 |
-3,00,000 |
36,00,000 |
-3,00,000 |
36,00,000 |
|
50 |
6 |
-3,00,000 |
36,00,000 |
-3,00,000 |
36,00,000 |
|
51 |
7 |
-3,00,000 |
36,00,000 |
-3,00,000 |
36,00,000 |
|
52 |
8 |
-2,74,500 |
36,00,000 |
-1,23,000 |
36,00,000 |
|
53 |
9 |
-2,74,500 |
36,00,000 |
-1,23,000 |
36,00,000 |
|
54 |
10 |
-2,74,500 |
36,00,000 |
-1,23,000 |
36,00,000 |
|
55 |
11 |
-2,74,500 |
36,00,000 |
-1,23,000 |
36,00,000 |
|
56 |
12 |
-2,74,500 |
36,00,000 |
-1,23,000 |
36,00,000 |
|
57 |
13 |
-2,74,500 |
36,00,000 |
-1,23,000 |
36,00,000 |
|
58 |
14 |
-2,74,500 |
36,00,000 |
-1,23,000 |
36,00,000 |
|
59 |
15 |
-2,74,500 |
36,00,000 |
-1,23,000 |
36,00,000 |
|
60 |
16 |
1,53,000 |
36,00,000 |
3,04,500 |
36,00,000 |
|
61 |
17 |
1,53,000 |
36,00,000 |
3,04,500 |
36,00,000 |
|
62 |
18 |
1,53,000 |
36,00,000 |
3,04,500 |
36,00,000 |
|
63 |
19 |
1,53,000 |
36,00,000 |
3,04,500 |
36,00,000 |
|
64 |
20 |
1,53,000 |
48,78,000 |
3,04,500 |
48,78,000 |
|
65 |
21 |
1,53,000 |
48,78,000 |
3,04,500 |
48,78,000 |
|
66 |
22 |
1,53,000 |
48,78,000 |
3,04,500 |
48,78,000 |
|
67 |
23 |
1,53,000 |
48,78,000 |
3,04,500 |
48,78,000 |
|
68 |
24 |
1,53,000 |
48,78,000 |
3,04,500 |
48,78,000 |
|
69 |
25 |
1,53,000 |
48,78,000 |
3,04,500 |
48,78,000 |
|
70 |
26 |
1,53,000 |
48,78,000 |
3,04,500 |
48,78,000 |
|
71 |
27 |
1,53,000 |
48,78,000 |
3,04,500 |
48,78,000 |
|
72 |
28 |
1,53,000 |
48,78,000 |
3,04,500 |
48,78,000 |
|
73 |
29 |
1,53,000 |
48,78,000 |
3,04,500 |
48,78,000 |
|
74 |
30 |
1,53,000 |
48,78,000 |
3,04,500 |
48,78,000 |
|
75 |
31 |
1,53,000 |
48,78,000 |
3,04,500 |
48,78,000 |
|
76 |
32 |
1,53,000 |
48,78,000 |
3,04,500 |
48,78,000 |
|
77 |
33 |
1,53,000 |
48,78,000 |
3,04,500 |
48,78,000 |
|
78 |
34 |
1,53,000 |
48,78,000 |
3,04,500 |
48,78,000 |
|
79 |
35 |
1,53,000 |
48,78,000 |
3,04,500 |
48,78,000 |
|
80 |
36 |
1,53,000 |
48,78,000 |
3,04,500 |
48,78,000 |
|
81 |
37 |
1,53,000 |
48,78,000 |
3,04,500 |
48,78,000 |
|
82 |
38 |
1,53,000 |
48,78,000 |
3,04,500 |
48,78,000 |
|
83 |
39 |
1,53,000 |
48,78,000 |
3,04,500 |
48,78,000 |
|
84 |
40 |
1,53,000 |
48,78,000 |
3,04,500 |
48,78,000 |
|
85 |
41 |
1,53,000 |
48,78,000 |
3,04,500 |
48,78,000 |
|
86 |
42 |
1,53,000 |
48,78,000 |
3,04,500 |
48,78,000 |
|
87 |
43 |
1,53,000 |
48,78,000 |
3,04,500 |
48,78,000 |
|
88 |
44 |
1,53,000 |
48,78,000 |
3,04,500 |
48,78,000 |
|
89 |
45 |
1,53,000 |
48,78,000 |
3,04,500 |
48,78,000 |
|
90 |
46 |
1,53,000 |
48,78,000 |
3,04,500 |
48,78,000 |
|
91 |
47 |
1,53,000 |
48,78,000 |
3,04,500 |
48,78,000 |
|
92 |
48 |
1,53,000 |
48,78,000 |
3,04,500 |
48,78,000 |
|
93 |
49 |
1,53,000 |
48,78,000 |
3,04,500 |
48,78,000 |
|
94 |
50 |
1,53,000 |
48,78,000 |
3,04,500 |
48,78,000 |
|
95 |
51 |
1,53,000 |
48,78,000 |
3,04,500 |
48,78,000 |
|
96 |
52 |
1,53,000 |
48,78,000 |
3,04,500 |
48,78,000 |
|
97 |
53 |
1,53,000 |
48,78,000 |
3,04,500 |
48,78,000 |
|
98 |
54 |
1,53,000 |
48,78,000 |
3,04,500 |
48,78,000 |
|
99 |
55 |
1,53,000 |
48,78,000 |
3,04,500 |
48,78,000 |
|
100 |
1,00,23,000 |
1,55,74,500 |
|||
|
IRR |
3.58% |
6.51% |
|||
If the policyholder survives for 100 years, the maturity benefit is payable. The IRR under the 4% scenario is 3.58% & the IRR under the 8% scenario is 6.51%.
These rates are calculated after considering the maturity benefit at the end of 100 years of age. These returns are not beneficial when considering a long-term investment.
Though you may receive a regular income, the amount may vary every year (here it is assumed as a consistent amount). This might affect your plans. Investing in the SBI Life Smart Lifetime Saver Plan is not beneficial in terms of returns & inconsistent survival amount.
SBI Life Smart Lifetime Saver Plan Vs. Other Investment Options
Under SBI Life Smart Lifetime Saver Plan, in the initial years, you accumulate your savings & later you receive regular survival benefits.
Similarly, we can choose some other investments to accumulate savings & invest the accumulated corpus to withdraw money regularly.
Also, we can assume a life cover for a sum assured of ₹ 50 lakhs because, in the earlier illustration, the sum assured is around ₹ 49 lakhs.
The premium for a life cover of ₹ 50 lakhs would cost ₹ 6200 for a 15-year premium paying term (limited pay).
In the earlier illustration, the annual premium is ₹ 3 lakhs. The balance amount after paying the premium is utilised for investment.
SBI Life Smart Lifetime Saver Plan Vs. Pure Term Insurance + ELSS/PPF
|
Pure Term Life Insurance |
|
|
Sum Assured |
₹ 5 lakhs |
|
Policy Term |
Whole life |
|
Premium Paying term |
15 years |
|
Annualised premium |
₹ 6,200 |
|
The amount left for |
₹ 2,93,800 |
Assumptions:
After paying the premium for the pure term, the remaining amount is utilised for PPF/ELSS investment in the initial 15 years.
The maximum annual contribution to PPF account is ₹ 1,50,000. But here we assume that the balance amount is invested in the PPF account just for comparison purposes.
The ELSS maturity proceeds are subject to capital gains tax. Here we have considered a tax for the same. So, the IRR is a post-tax IRR.
In the initial 15 years, the savings are invested in either PPF or ELSS as per your choice. Later on, the accumulated fund from the respective investment in 7% return investment to have a regular cash flow similar to the above illustration.
At the 8% scenario, the annual survival benefit is ₹ 3,04,500. The same is assumed to be withdrawn from the 7% return investment. After withdrawing till the age of 100, the final corpus is included in the IRR calculation.
|
Term |
Term |
||||
|
Age |
Year |
Term |
Death |
Term |
Death |
|
45 |
1 |
-3,00,000 |
50,00,000 |
-3,00,000 |
50,00,000 |
|
46 |
2 |
-3,00,000 |
50,00,000 |
-3,00,000 |
50,00,000 |
|
47 |
3 |
-3,00,000 |
50,00,000 |
-3,00,000 |
50,00,000 |
|
48 |
4 |
-3,00,000 |
50,00,000 |
-3,00,000 |
50,00,000 |
|
49 |
5 |
-3,00,000 |
50,00,000 |
-3,00,000 |
50,00,000 |
|
50 |
6 |
-3,00,000 |
50,00,000 |
-3,00,000 |
50,00,000 |
|
51 |
7 |
-3,00,000 |
50,00,000 |
-3,00,000 |
50,00,000 |
|
52 |
8 |
-3,00,000 |
50,00,000 |
-3,00,000 |
50,00,000 |
|
53 |
9 |
-3,00,000 |
50,00,000 |
-3,00,000 |
50,00,000 |
|
54 |
10 |
-3,00,000 |
50,00,000 |
-3,00,000 |
50,00,000 |
|
55 |
11 |
-3,00,000 |
50,00,000 |
-3,00,000 |
50,00,000 |
|
56 |
12 |
-3,00,000 |
50,00,000 |
-3,00,000 |
50,00,000 |
|
57 |
13 |
-3,00,000 |
50,00,000 |
-3,00,000 |
50,00,000 |
|
58 |
14 |
-3,00,000 |
50,00,000 |
-3,00,000 |
50,00,000 |
|
59 |
15 |
-3,00,000 |
50,00,000 |
-3,00,000 |
50,00,000 |
|
60 |
16 |
3,04,500 |
50,00,000 |
3,04,500 |
50,00,000 |
|
61 |
17 |
3,04,500 |
50,00,000 |
3,04,500 |
50,00,000 |
|
62 |
18 |
3,04,500 |
50,00,000 |
3,04,500 |
50,00,000 |
|
63 |
19 |
3,04,500 |
50,00,000 |
3,04,500 |
50,00,000 |
|
64 |
20 |
3,04,500 |
50,00,000 |
3,04,500 |
50,00,000 |
|
65 |
21 |
3,04,500 |
50,00,000 |
3,04,500 |
50,00,000 |
|
66 |
22 |
3,04,500 |
50,00,000 |
3,04,500 |
50,00,000 |
|
67 |
23 |
3,04,500 |
50,00,000 |
3,04,500 |
50,00,000 |
|
68 |
24 |
3,04,500 |
50,00,000 |
3,04,500 |
50,00,000 |
|
69 |
25 |
3,04,500 |
50,00,000 |
3,04,500 |
50,00,000 |
|
70 |
26 |
3,04,500 |
50,00,000 |
3,04,500 |
50,00,000 |
|
71 |
27 |
3,04,500 |
50,00,000 |
3,04,500 |
50,00,000 |
|
72 |
28 |
3,04,500 |
50,00,000 |
3,04,500 |
50,00,000 |
|
73 |
29 |
3,04,500 |
50,00,000 |
3,04,500 |
50,00,000 |
|
74 |
30 |
3,04,500 |
50,00,000 |
3,04,500 |
50,00,000 |
|
75 |
31 |
3,04,500 |
50,00,000 |
3,04,500 |
50,00,000 |
|
76 |
32 |
3,04,500 |
50,00,000 |
3,04,500 |
50,00,000 |
|
77 |
33 |
3,04,500 |
50,00,000 |
3,04,500 |
50,00,000 |
|
78 |
34 |
3,04,500 |
50,00,000 |
3,04,500 |
50,00,000 |
|
79 |
35 |
3,04,500 |
50,00,000 |
3,04,500 |
50,00,000 |
|
80 |
36 |
3,04,500 |
50,00,000 |
3,04,500 |
50,00,000 |
|
81 |
37 |
3,04,500 |
50,00,000 |
3,04,500 |
50,00,000 |
|
82 |
38 |
3,04,500 |
50,00,000 |
3,04,500 |
50,00,000 |
|
83 |
39 |
3,04,500 |
50,00,000 |
3,04,500 |
50,00,000 |
|
84 |
40 |
3,04,500 |
50,00,000 |
3,04,500 |
50,00,000 |
|
85 |
41 |
3,04,500 |
50,00,000 |
3,04,500 |
50,00,000 |
|
86 |
42 |
3,04,500 |
50,00,000 |
3,04,500 |
50,00,000 |
|
87 |
43 |
3,04,500 |
50,00,000 |
3,04,500 |
50,00,000 |
|
88 |
44 |
3,04,500 |
50,00,000 |
3,04,500 |
50,00,000 |
|
89 |
45 |
3,04,500 |
50,00,000 |
3,04,500 |
50,00,000 |
|
90 |
46 |
3,04,500 |
50,00,000 |
3,04,500 |
50,00,000 |
|
91 |
47 |
3,04,500 |
50,00,000 |
3,04,500 |
50,00,000 |
|
92 |
48 |
3,04,500 |
50,00,000 |
3,04,500 |
50,00,000 |
|
93 |
49 |
3,04,500 |
50,00,000 |
3,04,500 |
50,00,000 |
|
94 |
50 |
3,04,500 |
50,00,000 |
3,04,500 |
50,00,000 |
|
95 |
51 |
3,04,500 |
50,00,000 |
3,04,500 |
50,00,000 |
|
96 |
52 |
3,04,500 |
50,00,000 |
3,04,500 |
50,00,000 |
|
97 |
53 |
3,04,500 |
50,00,000 |
3,04,500 |
50,00,000 |
|
98 |
54 |
3,04,500 |
50,00,000 |
3,04,500 |
50,00,000 |
|
99 |
55 |
3,04,500 |
50,00,000 |
3,04,500 |
50,00,000 |
|
100 |
5,42,76,346 |
10,70,28,915 |
|||
|
IRR |
6.96% |
8.02% |
|||
The accumulated corpus value under PPF is ₹ 79.68 lakhs & under ELSS is ₹ 1.22 crores (Pre-Tax). The Post-Tax ELSS value is ₹ 1.14 crores. The accumulated corpus is invested in a 7% return instrument for regular withdrawal.
|
ELSS Tax calculation |
|
|
Maturity value after 15 years |
₹ |
|
Less |
|
|
Purchase price |
₹ |
|
Long-term capital gains |
₹ |
|
Exemption limit |
₹ |
|
Taxable LTCG |
₹ |
|
Tax paid on LTCG |
₹ |
|
Maturity value after tax |
₹ |
After withdrawing regularly, you are left with an ample amount of money at the age of 100. In the SBI Life Smart Lifetime Saver Plan, the maturity value under both scenarios – 4% & 8% is around ₹ 1 – 1.5 crores.
But here the final corpus value is ₹ 5.42 crores in PPF & ₹ 10.7 crores in ELSS which is almost 5 times & 10 times higher.
The IRR for pure term & PPF combination is 6.96% & Pure term & ELSS combination is 8.02%.
These rates are far better than the SBI Lifetime Smart Saver Plan. Also, you have liquidity in these investments.
Either you can utilise the corpus for any of your Financial Goals or shift your funds to better-yielding products in the long run.
Final Verdict on the SBI Life Smart Lifetime Saver Plan
SBI Life Smart Lifetime Saver Plan offers survival benefit every year after the end of the premium paying term & also provide lumpsum maturity benefit at the end of 100 years.
All these benefits include both guaranteed & non-guaranteed portions. The IRR for a long-term investment should be higher than the inflation rate.
Here, the IRR is lower than the inflation rate. So, investing in the SBI Life Smart Lifetime Saver Plan is not a good option to get regular cash flow.
In general, having life cover till your working age is enough or sometimes you may extend till you meet most of your financial goals & pay off your liabilities if any.
During the post-retirement, effective investment of accumulated retirement corpus, an emergency kitty & health insurance is more than enough. A whole life policy doesn’t give you any value addition to your retirement plan even if it offers a survival benefit.
Consult your Financial Advisor & draft a Retirement Plan that suits the ideal retirement life you have imagined.
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