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SBI Life Smart Platina Plus claims that the policyholder can “Enjoy a little extra with regular guaranteed income.”
But will it give extra as it claims, or is it fed up with fake promises?
Will this insurance plan can help you to create long-term wealth?
Will this plan can give you a guaranteed income as promised?
Let’s analyze the SBI Life Smart Platina plus and discover whether this insurance plan is good or bad for you.
In this article, let’s see the detailed review of SBI Life Smart Platina Plus with illustrations before concluding.
Table of Content
What is SBI Life Smart Platina Plus and how does it work?
2 income plan options of SBI Life Smart Platina Plus
Key Features of SBI Life Smart Platina Plus
Benefits of SBI Life Smart Platina Plus
Analysis of SBI Life Smart Platina Plus Income Option with Illustrations
Pros and Cons of SBI Life Smart Platina Plus
SBI Life Smart Platina Plus vs. PPF + Term Insurance
SBI Life Smart Platina Plus vs. ELSS + Pure Term Insurance
How to surrender/cancel the Insurance Policy?
SBI Life Smart Platina Plus: Is It Good or Bad?
What is SBI Life Smart Platina Plus and how does it work?
Smart Platina Plus is a non-linked, non-participating life insurance savings product from SBI Life.
It is not a ULIP.
It claims that this policy can help you to achieve your financial independence in your later years by delivering consistent, guaranteed, and fixed regular income during the payout term.
It safeguards a family’s financial future throughout their lives.
SBI Life – Smart Platina Plus delivers assured income during the Payout Period.
After the end of the premium payment period plus one year as a survival benefit, you will get a fixed regular income.
This regular income will be paid during the end of each payout term frequency you choose.
At the end of the policy term, the maturity benefit, which is equivalent to 110% of the total premiums paid, will be returned.
2 Income Plan Options of SBI Life Smart Platina Plus:-
- Life Income
- Guaranteed Income
Depending on your choice, you can get your money in Yearly, Half-yearly, Quarterly, or Monthly payment installments.
You may choose the frequency of income payouts, which you can alter afterward.
Within nine months of the Premium Payment Term’s expiration, you can adjust the income payout frequency you chose at the start by contacting SBI Life.
The frequency to adjust the income payout frequency will only be accessible once for you, i.e. within nine months of the Premium Payment Term’s expiration date.
| Premium Payment Term | Payout Period | Policy Term(Premium Payment Term + 1 + Payout Period) |
| 7 years | 15/20/25/30 years | 23/28/33/38 years |
| 8 years | 15/20/25/30 years | 24/29/34/39 years |
| 10 years | 15/20/25 years | 26/31/36 years |
Key Features of SBI Life Smart Platina Plus:
1. Security: Life insurance protection for your family during the policy period.
2. Option to choose between two income plans to meet your financial needs: Guaranteed Income and Life Income.
3. Guaranteed Income Benefit: Get a fixed regular income each month for the payment period you need.
4. Maturity Benefit: At the end of the policy term, you can get 110% of the return.
5. Flexibility:
• Option to choose the payout period that can match your financial goals.
• Option to modify the frequency of income payouts before the payout period.
6. Income benefit frequency options: yearly, half-yearly, quarterly, or monthly basis.
7. Premium payment options are limited: to 7, 8, and 10 years.
8. Tax Benefits: Under the provisions of the Income Tax Act, 196
Benefits of SBI Life Smart Platina Plus:
Maturity Benefit:
In both life income and guaranteed income, you will get 110% of your annual premium term at the end of your policy term as a maturity benefit.
Survival Benefit:
In both options, you will get a fixed regular income during the payout period based on the frequency you choose.
Death Benefit:
The death benefit payable is different for each option.
Life Income:
In the Life Income option, if a policyholder passes away, then his nominee or legal hire will get the sum assured as mentioned in the policy conditions. The policy term will be terminated as soon as the nominee receives the sum assured.
Guaranteed Income:
If the policyholder passes away before the payout term, then the sum assured will be given to the nominee or the legal heir and the policy will be terminated.
If the policyholder passes away during the payout period then his nominee or legal heir can get the remaining guaranteed income plus the sum assured. The nominee or the legal heir also has an option to get the guaranteed income as lumpsum at any time during the payout period at discounted value.
Discounted at 8.25% per annum.
The nominee or legal heir will get the sum assured as the highest of the below,
- 1. 11 times of annual premium paid
- 2. 105% of the overall premium paid
- 3. Remaining guaranteed income + Maturity benefit (Only for Guaranteed Income option during payout term)
Analysis of SBI Life Smart Platina Plus Income Option with Illustrations:
1. Life Income Option:
For instance, if Mr. Ravi, a 35-year-old engineer. He purchases the Life Income Option Plan of SBI Life Smart Platina Plus.
He decided to pay Rs. 1, 00, 000 as premium per annum for 10 years. The payout duration is 15 years.
The policy term will be 26 years. So a year later, from the 12th term onwards, he will receive a regular income of Rs. 99, 210 per annum. It is 99.21% of a premium term he paid per annum.
At the end of the 26th year, he will get a Maturity benefit of Rs. 11, 00, 000. Which is 110% of the total premium he has paid.
If he passes away during the policy term, then his nominee will get the highest sum assured of the death benefit.
2. Guaranteed Income Option:
If Mr. Ravi purchased Guaranteed Income Option, then it will be almost the same as the Life Income Option. But he will receive 96.32% of his annual premium paid as a regular income.
When he passes away before the payout term, let’s say during the 7th year, then his nominee will receive a sum assured of Rs. 11, 00, 000
If he passes away during payout term, then his nominee will receive a death benefit of Rs. 13, 01, 383 and will continue to receive the regular income of Rs. 96, 320
Is it enough to consider this insurance plan can be purchased for 26 years?
Can this plan help you to reach your financial independence?
Let’s compare this insurance plan with other investment plans before deciding.
Pros and Cons of SBI Life Smart Platina Plus:
Pros:
1. Frequency of the income payout (Survival Benefit) can be changed in the later stage. However, a policyholder can change it only once. i.e. within 9 months from the date of expiry of Premium Paying Term.
2. You can get a life cover till the end of the policy term.
3. Flexibility to choose Premium paying term and payout period.
4. You can avail of 50% of the surrender value as a loan. The rate of interest is 150 basis points greater than the G-sec rate.
5. If you want to surrender the policy after the free look period, then you can surrender it after paying your 2nd premium term.
Cons:
1. In the income option plan, once you choose the Life Income or Guaranteed Income Option, then it cannot be changed.
2. The income payout is a fixed one. It is not adjustable to inflation. So it will not be enough to manage your expenses. So, it will be a great disadvantage to meet your increasing expenses.
3. The sum assured will not be sufficient to manage your family’s needs after you.
4. It is an insurance cum investment plan. But neither will not be beneficial for you.
5. You can get a loan or surrender the policy only after the completion of 2 policy years.
SBI Life Smart Platina Plus vs. PPF + Term Insurance:
If you think that SBI Life Smart Platina Plus Insurance Plan is a good investment plan for long-term investment, then let’s compare it with PPF for a better understanding.
Let’s say, your overall investment amount is Rs. 1, 00, 000
Pure Term Insurance:
Sum Assured = Rs. 50,00,000
So you are paying an annual premium = Rs. 9, 750
Tenure = 25 years
You can invest the remaining in PPF.
So, your investment amount = Rs. 90, 250 per annum
Tenure = 10 years
PPF’s current Interest Rate = 7.10% with no risk.
| Age | Year | Annual Premium/Survival Benefit | Death Benefit | Life Insurance Premium + PPF | Death Benefit |
|
35 |
1 | -100000 |
1100000 |
-100000 |
50,00,000 |
|
36 |
2 | -100000 | 1100000 | -100000 |
50,00,000 |
|
37 |
3 | -100000 | 1100000 | -100000 |
50,00,000 |
|
38 |
4 | -100000 | 1100000 | -100000 | 50,00,000 |
| 39 | 5 | -100000 | 1100000 | -100000 |
50,00,000 |
|
40 |
6 | -100000 | 1100000 | -100000 | 50,00,000 |
|
41 |
7 | -100000 | 1100000 | -100000 |
50,00,000 |
| 42 | 8 | -100000 | 1100000 | -100000 |
50,00,000 |
|
43 |
9 | -100000 | 1100000 | -100000 | 50,00,000 |
| 44 | 10 | -100000 | 1100000 | -100000 |
50,00,000 |
|
45 |
11 | 0 | 1100000 | -100000 | 0 |
|
46 |
12 | 96320 | 1302383 | 0 | 0 |
| 47 | 13 | 96320 | 1302383 | 0 |
0 |
| 48 | 14 | 96320 | 1302383 | 0 |
0 |
|
49 |
15 | 96320 | 1302383 | 0 | 0 |
| 50 | 16 | 96320 | 1302383 | 0 |
0 |
|
51 |
17 | 96320 | 1302383 | 0 | 0 |
| 52 | 18 | 96320 | 1302383 | 0 |
0 |
|
53 |
19 | 96320 | 1302383 | 0 | 0 |
| 54 | 20 | 96320 | 1302383 | 0 |
0 |
|
55 |
21 | 96320 | 1302383 | 0 | 0 |
| 56 | 22 | 96320 | 1302383 | 0 |
0 |
|
57 |
23 | 96320 | 1302383 | 0 | 0 |
| 58 | 24 | 96320 | 1302383 | 0 |
0 |
|
59 |
25 | 96320 | 1302383 | 0 | 0 |
| 60 | 26 | 1196320 | 1302383 |
₹37,54,283.12 |
|
|
IRR |
5.99% |
6.58% |
As you can see in the PPF Return calculator, the Guaranteed Income Option in SBI Life Smart Platina Plus will give you an IRR (Internal Rate of Return) of 5.99%.
But if you invest in PPF, it will give you an IRR of 6.58% which is slightly higher than the SBI Life Insurance plan.
After 10 years, the maturity value of PPF will be Rs. 13, 41, 791.
After 25 years, the final maturity value of PPF without annual contribution will be Rs. 37, 45, 283 which is higher than the Guaranteed Income return.
But, in the Guaranteed Income option in SBI Life Smart Platina Plus, you get Rs. 11, 96, 320 as a return for 26 years and Rs. 13, 02, 383 as a death benefit
In both investment and insurance PPF beats SBI Life Smart Platina Plus.
Still, do you think is it worth investing your money for 26 years?
Now, let’s compare this insurance plan with ELSS and see how it performs!
SBI Life Smart Platina Plus vs. ELSS + Pure Term Insurance:
Insurance Premium = Rs. 9, 750
Tenure = 25 years
Sum Assured = Rs. 50, 00, 000
Amount Invested in ELSS = Rs. 90, 250 per annum
Tenure = 10 years
ELSS Interest Rate = 12% with moderate risk.
|
Age |
Year | Annual Premium/Survival Benefit | Death Benefit | Life Insurance Premium + ELSS | Death Benefit |
|
35 |
1 | -100000 | 1100000 | -100000 | 50,00,000 |
| 36 | 2 | -100000 | 1100000 | -100000 |
50,00,000 |
|
37 |
3 | -100000 | 1100000 | -100000 | 50,00,000 |
| 38 | 4 | -100000 | 1100000 | -100000 |
50,00,000 |
|
39 |
5 | -100000 | 1100000 | -100000 | 50,00,000 |
| 40 | 6 | -100000 | 1100000 | -100000 |
50,00,000 |
|
41 |
7 | -100000 | 1100000 | -100000 | 50,00,000 |
| 42 | 8 | -100000 | 1100000 | -100000 |
50,00,000 |
|
43 |
9 | -100000 | 1100000 | -100000 | 50,00,000 |
| 44 | 10 | -100000 | 1100000 | -100000 |
50,00,000 |
|
45 |
11 | 0 | 1100000 | -100000 | 0 |
| 46 | 12 | 96320 | 1302383 | 0 |
0 |
|
47 |
13 | 96320 | 1302383 | 0 | 0 |
| 48 | 14 | 96320 | 1302383 | 0 |
0 |
|
49 |
15 | 96320 | 1302383 | 0 | 0 |
| 50 | 16 | 96320 | 1302383 | 0 |
0 |
|
51 |
17 | 96320 | 1302383 | 0 | 0 |
| 52 | 18 | 96320 | 1302383 | 0 |
0 |
|
53 |
19 | 96320 | 1302383 | 0 | 0 |
| 54 | 20 | 96320 | 1302383 | 0 |
0 |
|
55 |
21 | 96320 | 1302383 | 0 | 0 |
| 56 | 22 | 96320 | 1302383 | 0 |
0 |
|
57 |
23 | 96320 | 1302383 | 0 | 0 |
| 58 | 24 | 96320 | 1302383 | 0 |
0 |
|
59 |
25 | 96320 | 1302383 | 0 | 0 |
| 60 | 26 | 1196320 | 1302383 | ₹97,09,154.03 | |
|
IRR |
5.99% |
11.46% |
Here the IRR (Internal Rate of Return) of ELSS will be 11.46%.
After 10 years, the maturity value of ELSS will be Rs. 17, 73, 826
After 25 years, the final maturity value of ELSS without annual contribution will be Rs. 97, 09, 154 which is also higher than the Guaranteed Income return.
SBI Life Smart Wealth Platina will give you the return that equals Bank FDs. It can hardly beat the inflation rate.
How to surrender/cancel the Insurance Policy?
There is a free look period of 15 days (if you purchase this policy online, then the free look period will be 30 days) to cancel the insurance policy.
If the policyholder wants to cancel the policy, then he does the cancellation by stating the reasons for objections. There are some deductions applicable in refunding the premium paid.
You can contact SBI Life Customer Care for more details or you can read the brochure here.
What will happen if you want to surrender/ cancel the policy after the free look period?
If you are planning to surrender the insurance policy after the free look period, then you have to wait for 2 years.
The lock-in period to surrender the insurance policy is two years.
The policy can be surrendered only after the payment completion of 2nd premium term.
The surrender value would be higher than the Special Surrender Value (SSV) and Guaranteed Surrender Value (GSV).
The Guaranteed Surrender Value (GSV) is equal to (GSV factors multiplied by the total premiums paid) fewer survival benefits paid if any,
Special Surrender Value = SSV Factor x (Total Outstanding Reduced Guaranteed Income + 110% of the Total Premiums paid)
SSV characteristics would be modified subject to prior approval by IRDAI.
For details on GSV and SSV characteristics, please refer to the policy document.
SBI Life Smart Platina Plus: Is It Good or Bad?
As mentioned earlier, both Life Income Option and Guaranteed Income Option in SBI Life
Smart Platina Plus give you a return that is equal to Bank FDs.
If you are planning to purchase this insurance policy for the long-term, it will not help you to grow your wealth or will give you an inflation-beating return.
This insurance plus investment policy neither serves as a good investment plan nor a good investment scheme compared to investment or insurance.
If you are looking for an investment and insurance plan for the long-term, then you can choose the combination of pure term insurance and PPF as a risk-free investment.
If you think you can take a risk, then you can choose other investment options such as mutual funds.
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