SBI Life New Smart Samriddhi Plan Review: Is It Worth Buying?
Taking Smart Decisions will ensure that you always stay one step ahead in life.
One such Smart Decision is in choosing the Right Investment Product.
SBI Life Smart Platina Assure Plan assures a Guaranteed Return while providing a Life Insurance Cover.
This detailed review will help you decide whether investing in the SBI Life Smart Platina Assure Plan is a Smart Decision or not.
It is an Individual, Non-Linked, Non-Participating Life Endowment Assurance Savings Product.
It provides life cover for your family and helps to achieve your desired Financial Goals in life. It assures guaranteed returns with the advantage of paying a premium for a limited term.
The basic workings of the plan are given at a glance below;
| Age at Entry | Min :3 year |
| Maximum | 75 years |
| Policy Term | 15 & 20 years |
| Premium | 7 years for a policy term of 15 years |
| Premium | Yearly/ |
| Annualized | Minimum:50,000 |
| Basic | Minimum: |
The SBI Life Smart Platina Assure Plan offers a Rate of Guaranteed Additions based on the two premium slabs as per the below table, provided all due premiums are paid.
| Annualized | Slabs | Greater |
| Rate | 4.55% | 5.05% |
Guaranteed Sum Assured on maturity (i.e., Basic Sum Assured) Plus accrued Guaranteed Additions.
In the unfortunate event of death of the Life Assured, ‘Sum Assured on Death’ along with accrued Guaranteed Additions, if any, will be payable to the beneficiary.
Where Sum Assured on Death is higher of
Grace period
The plan offers a grace period of 30 days for payment of yearly premiums and 15 days for monthly premiums from the premium due date.
Reduced paid-up
After completion of the first policy year, the policy acquires reduced paid-up value if at least first full policy year’s premiums has been paid and any subsequent premiums have not been paid.
All the benefits are reduced proportionately by the ratio of the number of premiums paid to the actual number of premiums payable under the policy.
Revival
A lapsed policy may be revived, within 5 years from the date of the first unpaid premium.
On revival, the policy will be eligible for future Guaranteed Additions.
In case you disagree with the terms and conditions of the SBI Life Smart Platina Assure Plan, you have the option to return the policy to the corporation, within 30 days beginning from the date of receipt of the policy document, whether received electronically or otherwise.
The policy acquires Guaranteed Surrender Value only if at least first 2 full policy years’ premiums have been paid. The policy acquires Special Surrender Value after completion of first policy year only if at least first full policy year’s premium(s) has been paid.
On surrender, the higher of the Non-Guaranteed Special Surrender Value (SSV) or the Guaranteed Surrender Value (GSV) will be paid.
You can refer to the SBI Life Smart Platina Assure Policy Brochure for more details.
The above features & other details can’t help you in your Investment Decision Making. This plan offers Guaranteed Maturity Benefits.
So, we can easily calculate the return for the SBI Life Smart Platina Assure Policy. By calculating the returns, you can decide whether to buy this plan or not. Also, this return can be compared with other investment returns.
SBI Life Smart Platina Assure Plan: IRR Analysis Let us assume that a 40-year-old male buys the SBI Life Smart Platina Assure Plan for a sum assured of ₹ 10,00,000.
The policy term is 15 years & the premium paying term is 7 years.
The annualised premium is ₹ 1 lakh.
After paying a premium for 7 years, he would receive the maturity benefit at the end of 15 years.
We can calculate the internal rate of return for this cash flow below.
| Age | 40 |
| Basic Sum Assured | ₹ 10,00,000 |
| Policy Term | 15 |
| Premium paying term | 7 years |
| Annualised Premium | ₹ 1,00,000 |
Since the SBI Life Smart Platina Assure Plan is a Non-Linked & Non-Participating Insurance cum Savings Plan, he would receive a Guaranteed Maturity Benefit of ₹ 12,64,200 along with the Guaranteed Additions.
In case of the unfortunate event of the death of Mr. Malik, the nominee will get ₹ 10,00,000 + Accrued Guaranteed Additions, if any, as Death Benefit.
| Age | Year | Annualised premium / Maturity benefit | Death benefit |
| 40 | 1 | -1,00,000 | 10,00,000 |
| 41 | 2 | -1,00,000 | 10,00,000 |
| 42 | 3 | -1,00,000 | 10,00,000 |
| 43 | 4 | -1,00,000 | 10,00,000 |
| 44 | 5 | -1,00,000 | 10,00,000 |
| 45 | 6 | -1,00,000 | 10,00,000 |
| 46 | 7 | -1,00,000 | 10,00,000 |
| 47 | 8 | 0 | 10,00,000 |
| 48 | 9 | 0 | 10,00,000 |
| 49 | 10 | 0 | 10,00,000 |
| 50 | 11 | 0 | 10,00,000 |
| 51 | 12 | 0 | 10,00,000 |
| 52 | 13 | 0 | 10,00,000 |
| 53 | 14 | 0 | 10,00,000 |
| 54 | 15 | 0 | 10,00,000 |
| 55 | 12,64,200 | ||
| IRR | 5.01% |
The IRR for this cash flow is 5.01%. It is lower than a Bank’s FD rate.
Any Investment, in the long run should beat inflation.
But the SBI Life Smart Platina Assure Plan fails to beat the inflation.
This Maturity value will not be sufficient to meet the inflated cost of the Financial Goals.
SBI Life Smart Platina Assure Plan has both Life Cover & Investment Options.
We can compare the returns of this policy with other Investment Alternatives.
For comparison, we can assume Pure Term Insurance for Life Cover & Invest in an Investment Product separately for our Financial Goals.
We can assume Life Cover, Policy Terms & Premium Paying Terms similar to the Benefit Illustration. It is advisable to take adequate life cover for yourself before starting your Investment Journey.
Here, in the illustration, the life cover is inadequate (₹ 10 lakhs).
A Pure Term Insurance Policy for a sum assured of ₹ 10 lakhs would cost ₹ 18,500 for a Limited Premium Paying Term of 5 years. The Policy Term is 15 years.
In the earlier illustration, the Premium Paying Term is 7 years.
So, in the last 2 years, the entire amount of ₹ 1 lakh is available for Investment. Let us assume PPF & Equity Mutual Fund for Investment Purposes.
| Pure Term Life Insurance Policy | |
| Sum Assured | ₹ 10,00,000 |
| Policy Term | 15 years |
| Premium Paying Term | 5 years |
| Annualised Premium | ₹ 18,500 |
| Investment | ₹ 81,500 |
Under PPF, the minimum term period (with contribution) is 15 years. But in the earlier illustration, the premium paying term is 7 years.
In order to make 15 years contribution, adjustments were made in the 7th year premium. So, in the last 8 years, a minimum contribution of ₹ 500 is deposited in the PPF account.
Under Equity mutual fund, in the first 5 years, the balance amount left after paying Pure Term Insurance Premium is utilized for investment.
In the next 2 years, the entire ₹ 1 lakh is utilized for your Equity mutual fund investment.
The fund grows as such in the last 8 years.
The final Maturity Value is subject to Capital Gain Tax. The Tax Calculation is given below.
| Term Insurance + PPF | Term insurance + Equity Mutual Fund | ||||
| Age | Year | Term Insurance premium + PPF | Death benefit | Term Insurance premium + Equity Mutual Fund | Death benefit |
| 40 | 1 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 41 | 2 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 42 | 3 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 43 | 4 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 44 | 5 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 45 | 6 | -1,00,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 46 | 7 | -96,000 | 10,00,000 | -1,00,000 | 10,00,000 |
| 47 | 8 | -500 | 10,00,000 | 0 | 10,00,000 |
| 48 | 9 | -500 | 10,00,000 | 0 | 10,00,000 |
| 49 | 10 | -500 | 10,00,000 | 0 | 10,00,000 |
| 50 | 11 | -500 | 10,00,000 | 0 | 10,00,000 |
| 51 | 12 | -500 | 10,00,000 | 0 | 10,00,000 |
| 52 | 13 | -500 | 10,00,000 | 0 | 10,00,000 |
| 53 | 14 | -500 | 10,00,000 | 0 | 10,00,000 |
| 54 | 15 | -500 | 10,00,000 | 0 | 10,00,000 |
| 55 | 13,80,750 | 21,81,882 | |||
| IRR | 5.78% | 9.78% | |||
| Equity Mutual Fund Tax Calculation | |
| Maturity value after 15 years | 23,88,937 |
| Purchase price | 6,07,500 |
| Long-Term Capital Gains | 17,81,437 |
| Exemption limit | 1,25,000 |
| Taxable LTCG | 16,56,437 |
| Tax paid on LTCG | 2,07,055 |
| Maturity value after tax | 21,81,882 |
The IRR under PPF & Pure Term Insurance Combo is 5.78% & the IRR for the Pure Term Insurance + Equity Mutual Fund combo is 9.78% (Post-Tax Equity Mutual Fund IRR).
The returns from the Equity Mutual Fund are higher than the SBI Life Smart Platina Assure Plan. The Equity Mutual Fund investment can beat inflation comfortably in the long run. This helps you in accumulating corpus.
SBI Smart Platina Assure Plan is a Guaranteed Return Savings Plan that provides life cover for your family. It inculcates the habit of savings. But the main point here is that the savings should aid you in fulfilling your Life’s Financial Goals.
But this Endowment Plan fails to do so. Down the lane, the cost of your Financial Goal increases due to inflation.
Though the maturity benefit under this policy is guaranteed, it won’t be sufficient to meet your Financial Goals. Also, the sum assured in the SBI Life Smart Platina Assure Plan is inadequate.
You can consider a Pure Term Life Insurance Policy for an adequate sum assured. The sum assured offered by the Pure Term Insurance Plan is high, and at the same time, it is available at convenient premium costs.
List your Financial Goals & invest in a Diversified Portfolio based on your risk appetite & time horizon. Never mix your savings with Insurance.
Always Consult with your Financial Planner to customize your Investment Plan best suited to your Financial Needs in order to attain better results.
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