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Are you looking for a financial product that can help you meet future goals while also providing life insurance protection?
Whether it’s funding your child’s education, planning for retirement, or creating a financial safety net for your family, achieving these goals requires more than just good intentions—it requires the right financial strategy.
Money-back insurance plans often appeal to investors who value periodic pay-outs and guaranteed benefits.
But do these plans deliver enough value compared to alternative investment options?
SBI Life Smart Money Back Plus is one such plan that combines life insurance coverage with scheduled pay-outs during the policy term.
In this review, we’ll examine its features, benefits, costs, and limitations to help you determine whether it aligns with your financial goals and long-term wealth-building needs.
Table of Contents:
What is the SBI Life Smart Money Back Plus?
What are the features of the SBI Life Smart Money Back Plus?
Who is eligible for the SBI Life Smart Money Back Plus?
What are the benefits of the SBI Life Smart Money Back Plus?
Grace Period, Discontinuance and Revival of the SBI Life Smart Money Back Plus
Free Look Period for the SBI Life Smart Money Back Plus
Surrendering the SBI Life Smart Money Back Plus
What are the advantages of the SBI Life Smart Money Back Plus?
What are the disadvantages of the SBI Life Smart Money Back Plus?
Research Methodology of the SBI Life Smart Money Back Plus
Benefit Illustration – IRR Analysis of SBI Life Smart Money Back Plus
SBI Life Smart Money Back Plus Vs. Other Investments
SBI Life Smart Money Back Plus Vs. Pure-term + Equity Mutual Fund
Final Verdict on SBI Life Smart Money Back Plus
What is the SBI Life Smart Money Back Plus?
SBI Life Smart Money Back Plus is an Individual, Non-linked, Participating, Life Insurance Savings Product.
It ensures payouts at periodic intervals while also providing life insurance protection throughout the policy term.
It’s a seamless way to plan ahead and ensure you stay committed towards life’s key milestones with complete peace of mind.
What are the features of the SBI Life Smart Money Back Plus?
- Provides periodic cash payouts during the policy term to support planned financial needs and milestones.
- Survival Benefits amounting to 90% of the Sum Assured are paid in increasing instalments of 15%, 20%, 25%, and 30% at specified intervals.
- On maturity, the policy pays 40% of the Sum Assured along with any declared Vested Reversionary Bonus and Terminal Bonus, if applicable.
- Offers flexibility in choosing the premium payment term.
- Higher Sum Assured levels may qualify for premium discounts.
- Eligible for tax benefits under the applicable provisions of the Income Tax Act, 1961, subject to prevailing tax laws.
Who is eligible for the SBI Life Smart Money Back Plus?
| Minimum | Maximum | |
| Entry Age | 30 days |
50 years |
|
Maturity Age |
20 years | 70 years |
| Sum Assured | ₹ 2,00,000 |
No limit; subject to Board-approved Underwriting Policy |
|
Premium Payment Term/ Policy Term / Pay-out Period (in Years) |
Premium Payment Term |
Policy Term |
|
7 |
20-25 years |
|
|
10 |
||
|
12 |
||
|
Premium Frequency |
Yearly, Half-Yearly and Monthly |
|
|
Premium Amount |
Yearly – ₹20,000 Half-yearly – ₹10,200 Monthly – ₹ 1,700 |
No Limit, subject to Board Approved Underwriting Polic |
|
Rider |
SBI Life – Accident Benefit Rider (UIN:111B041V01) |
|
What are the benefits of the SBI Life Smart Money Back Plus?
1. Death Benefit
In the unfortunate event of the death of Life Assured during the policy term, provided the policy is in force, the Death Benefit is payable as a lump sum, which is the higher of the following:
- Sum Assured on Death Plus Vested Reversionary Bonuses, if declared, plus Terminal Bonus, if any.
- 105% of the Total Premiums Paid up to the date of death,
where Sum Assured on Death is the higher of Sum Assured or 11 times the Annualised Premium
The death benefit mentioned above is payable irrespective of any Survival Benefits already paid.
2. Survival Benefits
The Survival Benefits instalments expressed as a fixed percentage of Sum Assured are payable on survival of Life Assured till the end of the specified policy years during the policy term, subject to the policy being in force, and are as follows:
|
Survival Benefit Instalment as a Percentage of Sum Assured |
||||||
| End of the Policy Year/ Policy Term | 20 | 21 | 22 | 23 | 24 |
25 |
|
4 |
15% | 15% | 15% | 15% | 15% | |
| 5 |
15% |
|||||
|
8 |
20% | 20% | 20% | 20% | 20% | |
| 10 |
20% |
|||||
|
12 |
25% | 25% | 25% | 25% | 25% | |
| 15 |
25% |
|||||
|
16 |
30% | 30% | 30% | 30% | 30% | |
|
20 |
30% |
|||||
|
TOTAL |
90% | 90% | 90% | 90% | 90% | 90% |
3. Maturity Benefits
On survival of Life Assured till the end of the policy term, provided the policy is in force, Sum Assured on Maturity Plus Vested Reversionary Bonus if declared, plus Terminal Bonus, if any, is payable as a lump sum. Where, Sum Assured on maturity is equal to 40% of Sum Assured.
Grace Period, Discontinuance and Revival of the SBI Life Smart Money Back Plus
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.
Discontinuance
Lapse: If the first full policy year’s premium(s) have not been paid, the policy shall lapse without acquiring Reduced Paid – Up value on 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 Value: After completion of the first policy year, the policy acquires Reduced Paid-Up value if at least the first full policy year’s premium(s) have been paid, and any subsequent premiums have not been paid.
Once the policy becomes Reduced Paid-up, no further reversionary bonus will be vested as the Policy shall not be entitled to participate in future profits.
However, the already vested reversionary bonuses, if declared, shall remain attached to the Reduced Paid-up 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 five consecutive complete years from the date of the first unpaid premium.
Free Look Period for the SBI Life Smart Money Back Plus
The policyholder has a free look period of 30 days beginning from the date of receipt of the policy document, whether received electronically or otherwise, to review the terms and conditions of the policy.
In the event the policyholder disagrees with any of the policy terms and conditions, or otherwise and has not made any claim, the policyholder has the option to return the policy to the company for cancellation.
Surrendering the SBI Life Smart Money Back Plus
An In-force or Reduced Paid-up Policy can be surrendered at any time during the Policy Term for a Surrender Value.
The higher of Special Surrender Value (SSV) or Guaranteed Surrender Value (GSV) is payable as Surrender Value. Upon the payment of the Surrender Benefit in a lump sum, the policy will terminate, and no future benefits will be payable.
The policy acquires Guaranteed Surrender Value (GSV) only if at least the first 2 full policy years’ premiums have been paid.
The Special Surrender Value (SSV) shall become payable after completion of the first policy year, provided one full policy year’s premium(s) have been received.
What are the advantages of the SBI Life Smart Money Back Plus?
- The maturity benefit is payable as a lump sum by default; however, the policy offers a Settlement Option that allows the maturity proceeds to be received in a structured manner.
- Optional rider benefits are available to enhance the policy’s protection coverage.
- Policy loans can be availed against the policy, subject to a maximum limit of 50% of the surrender value.
- High Sum Assured policies are eligible for premium discounts, which remain applicable throughout the premium payment term.
What are the disadvantages of the SBI Life Smart Money Back Plus?
- Regular survival benefit payouts may be used for discretionary spending rather than being invested towards long-term financial goals.
- The survival benefits are paid at predetermined intervals and cannot be deferred to a later date based on the policyholder’s preference.
- The maturity benefit is not fully guaranteed, as the bonus component depends on the insurer’s annual bonus declarations and may vary over time.
- Although the survival benefits are guaranteed, the overall returns generated by the policy may not be sufficiently attractive when compared to other long-term investment alternatives.
Research Methodology of the SBI Life Smart Money Back Plus
The SBI Life Smart Money Back Plus Plan offers guaranteed periodic payouts during the policy term.
While these payouts may appear attractive for meeting intermediate financial needs, it is important to evaluate the plan based on its overall return potential.
To assess this, we have calculated the Internal Rate of Return (IRR) using the benefit illustration provided in the policy brochure.
Benefit Illustration – IRR Analysis of SBI Life Smart Money Back Plus
Consider a 35-year-old female who opts for the plan with a Sum Assured of ₹5 lakhs.
The policy term is 25 years, the premium paying term is 10 years, and the annual premium is ₹50,797.
|
Female |
35 years |
| Sum Assured |
₹ 5,00,000 |
|
Policy Term |
25 years |
| Premium Paying Term |
10 years |
|
Annualised Premium |
₹ 50,797 |
Under the plan, survival benefits are paid at the end of the 5th, 10th, 15th, and 20th policy years.
These payouts are expressed as a percentage of the Sum Assured.
In addition, the policyholder receives a maturity benefit at the end of the term, which includes the Sum Assured along with applicable bonuses.
|
At 4% p.a. |
At 8% p.a. | ||||
| Age | Year | Annualised premium / Maturity benefit | Death benefit | Annualised premium / Maturity benefit |
Death benefit |
|
35 |
1 | -50,797 | 5,00,000 | -50,797 | 5,00,000 |
| 36 | 2 | -50,797 | 5,00,000 | -50,797 |
5,00,000 |
|
37 |
3 | -50,797 | 5,00,000 | -50,797 | 5,00,000 |
| 38 | 4 | -50,797 | 5,00,000 | -50,797 |
5,00,000 |
|
39 |
5 | -50,797 | 5,00,000 | -50,797 | 5,00,000 |
| 40 | 6 | 24,203 | 5,00,000 | 24,203 |
5,00,000 |
|
41 |
7 | -50,797 | 5,00,000 | -50,797 | 5,00,000 |
| 42 | 8 | -50,797 | 5,00,000 | -50,797 |
5,00,000 |
|
43 |
9 | -50,797 | 5,00,000 | -50,797 | 5,00,000 |
| 44 | 10 | -50,797 | 5,00,000 | -50,797 |
5,00,000 |
|
45 |
11 | 1,00,000 | 5,00,000 | 1,00,000 | 5,00,000 |
| 46 | 12 | 0 | 5,00,000 | 0 |
5,00,000 |
|
47 |
13 | 0 | 5,00,000 | 0 | 5,00,000 |
| 48 | 14 | 0 | 5,00,000 | 0 |
5,00,000 |
|
49 |
15 | 0 | 5,00,000 | 0 | 5,00,000 |
| 50 | 16 | 1,25,000 | 5,00,000 | 1,25,000 |
5,00,000 |
|
51 |
17 | 0 | 5,00,000 | 0 | 5,00,000 |
| 52 | 18 | 0 | 5,00,000 | 0 |
5,00,000 |
|
53 |
19 | 0 | 5,00,000 | 0 | 5,00,000 |
| 54 | 20 | 0 | 5,00,000 | 0 |
5,00,000 |
|
55 |
21 | 1,50,000 | 5,00,000 | 1,50,000 | 5,00,000 |
| 56 | 22 | 0 | 5,00,000 | 0 |
5,00,000 |
|
57 |
23 | 0 | 5,00,000 | 0 | 5,00,000 |
| 58 | 24 | 0 | 5,00,000 | 0 |
5,00,000 |
|
59 |
25 | 0 | 5,00,000 | 0 | 5,00,000 |
|
60 |
2,18,750 |
7,20,625 |
|||
| IRR | 2.21% |
5.65% |
|||
The benefit illustration provides projections based on assumed investment return rates of 4% p.a. and 8% p.a.
These rates are only illustrative in nature and are neither guaranteed nor indicative of the maximum or minimum returns that may be earned.
Based on the projected cash flows, the IRR works out to 2.21% under the 4% return scenario, reflecting negligible wealth creation.
Even under the 8% return scenario, the IRR is only 5.65%, which is lower than the returns offered by many debt-oriented investment options.
The IRR analysis clearly indicates that the SBI Life Smart Money Back Plus Plan locks your money in for the long term while generating relatively modest returns.
Given its low return potential, the plan is unlikely to create a meaningful corpus or effectively support the achievement of long-term financial goals.
SBI Life Smart Money Back Plus Vs. Other Investments
The SBI Life Smart Money Back Plus Plan delivers relatively low investment returns while also providing inadequate life insurance coverage due to the bundling of insurance and investment into a single product.
A more efficient approach is to separate these two objectives by purchasing a pure term life insurance policy and investing the surplus premium independently.
SBI Life Smart Money Back Plus Vs. Pure-term + Equity Mutual Fund
To illustrate this, consider a pure term life insurance policy offering a Sum Assured of ₹5 lakhs.
Assuming an annual premium of ₹5,000, a policy term of 25 years, and a premium paying term of 10 years, the difference of ₹45,797 per year (₹50,797 − ₹5,000) becomes available for investment.
|
Pure Term Life Insurance Policy |
|
|
Sum Assured |
₹ 5,00,000 |
| Policy Term |
25 years |
|
Premium Paying Term |
10 years |
| Annualised Premium |
₹ 5,000 |
|
Investment |
₹ 45,797 |
For this comparison, the surplus amount is invested in an Equity Mutual Fund.
To replicate the cash flow pattern of the SBI Life Smart Money Back Plus Plan, withdrawals equivalent to the plan’s survival benefits are made from the mutual fund investment at the respective intervals during the policy term.
|
Term insurance + Equity Mutual Fund |
|||
| Age | Year | Term Insurance premium + Equity Mutual Fund |
Death benefit |
|
35 |
1 | -50,797 | 5,00,000 |
| 36 | 2 | -50,797 |
5,00,000 |
|
37 |
3 | -50,797 | 5,00,000 |
| 38 | 4 | -50,797 |
5,00,000 |
|
39 |
5 | -50,797 | 5,00,000 |
| 40 | 6 | 24,203 |
5,00,000 |
|
41 |
7 | -50,797 | 5,00,000 |
| 42 | 8 | -50,797 |
5,00,000 |
|
43 |
9 | -50,797 | 5,00,000 |
| 44 | 10 |
-50,797 |
5,00,000 |
|
45 |
11 | 1,00,000 | 5,00,000 |
| 46 | 12 | 0 |
5,00,000 |
|
47 |
13 | 0 | 5,00,000 |
| 48 | 14 | 0 |
5,00,000 |
|
49 |
15 | 0 | 5,00,000 |
| 50 | 16 | 1,25,000 |
5,00,000 |
|
51 |
17 | 0 | 5,00,000 |
| 52 | 18 | 0 |
5,00,000 |
|
53 |
19 | 0 | 5,00,000 |
| 54 | 20 | 0 |
5,00,000 |
|
55 |
21 | 1,50,000 | 5,00,000 |
| 56 | 22 | 0 |
5,00,000 |
|
57 |
23 | 0 | 5,00,000 |
| 58 | 24 | 0 |
5,00,000 |
|
59 |
25 | 0 | 5,00,000 |
| 60 |
27,00,899 |
||
| IRR |
10.81% |
||
At the end of the 25-year period, the remaining units are redeemed to match the final maturity payout under the SBI Life Smart Money Back Plus Plan.
For tax calculations, capital gains are considered only at the final redemption and not on the earlier withdrawals, assuming that the annual long-term capital gains remain within the exempt limit of ₹1.25 lakh.
|
Equity Mutual Fund Tax Calculation |
|
|
Maturity value after 25 years |
30,03,460 |
| Purchase price |
4,57,970 |
|
Long-Term Capital Gains |
25,45,490 |
| Exemption limit |
1,25,000 |
|
Taxable LTCG |
24,20,490 |
| Tax paid on LTCG |
3,02,561 |
|
Maturity value after tax |
27,00,899 |
Based on this analysis, the combination of pure term life insurance and equity mutual fund investment generates a post-tax IRR of 10.81%, substantially higher than the returns offered by the SBI Life Smart Money Back Plus Plan.
Apart from delivering superior returns, this strategy also offers greater flexibility.
You retain control over when and how much to withdraw based on your actual financial requirements rather than being restricted to predetermined payout dates.
In contrast, the SBI Life Smart Money Back Plus Plan suffers from two major limitations—limited flexibility and inadequate life insurance coverage—making it a less effective solution for achieving long-term financial goals.
Final Verdict on SBI Life Smart Money Back Plus
The SBI Life Smart Money Back Plus Plan is designed to provide periodic liquidity through regular payouts while offering life insurance protection to the policyholder’s family.
Although this objective may appear appealing, a closer analysis reveals that the plan delivers relatively low returns.
The corpus accumulated under the plan is unlikely to provide meaningful financial support when major life goals or unforeseen expenses arise.
From an investment perspective, the plan falls short of helping investors achieve long-term financial goals.
The survival benefits are modest and may not keep pace with inflation or rising future expenses.
At the same time, the life insurance coverage offered under the plan is insufficient to adequately protect a family’s financial well-being in the event of the policyholder’s demise.
As a result, the SBI Life Smart Money Back Plus Plan does not effectively serve either as a robust investment vehicle or as a comprehensive insurance solution.
A more prudent approach is to separate insurance and investment.
The first step should be to secure an adequate pure-term life insurance policy, which provides substantial life cover at a relatively low cost.
This ensures that your family’s financial future is protected without compromising your investment potential.
Once adequate life cover is in place, you can build a diversified investment portfolio aligned with your financial goals, investment horizon, and risk appetite.
Such an approach offers greater flexibility, better transparency, and the potential for superior long-term wealth creation.
For a goal-based and comprehensive financial plan, consider consulting a Certified Financial Planner (CFP).
A qualified professional can help assess your financial situation and recommend suitable investment strategies and products tailored to your specific objectives and circumstances.
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