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Is SBI Life Smart Swadhan Neo the secure option you’ve been searching for, or just another insurance product?

Is SBI Life Smart Swadhan Neo the right plan to guarantee a risk-free return, or is there a catch?

Can the SBI Life Smart Swadhan Neo Plan provide the peace of mind you need regarding future savings?

In this review, we’ll explore the features, benefits, and drawbacks of the SBI Life Smart Swadhan Neo plan, offering insights to help you understand its suitability as a life insurance option.

What is the SBI Life Smart Swadhan Neo?

SBI Life – Smart Swadhan Neo is an Individual, Non-Linked, Non-Participating, Life Insurance Savings Product. SBI Life Smart Swadhan Neo Plan is designed to meet your insurance needs, with the added advantage of getting your total premium(s) paid back on Maturity.

What are the features of the SBI Life Smart Swadhan Neo?

Twin benefits of Protection and 100% return on premium
Pay premiums through a Single payment or for a Limited period (7, 10, 15 years) or throughout the policy term
Choose the Policy term from 15 years to 30 years
Optional Accident Benefit Rider available
Tax Benefits as per the prevailing norms under the Income Tax Act, 1961.

Who is eligible for the SBI Life Smart Swadhan Neo?

	Minimum	Maximum
Age at Entry	18 years	50/60 years
Maximum age at maturity	65/75 years
Sum Assured	₹ 5,00,000	₹ 24,90,000
Policy term	15 years	30 years
Premium paying term	Single premium, Limited premium – 7/10/15 years,Regular Premium
Premium frequency	Single, Yearly, Half-yearly and Monthly

What are the benefits of the SBI Life Smart Swadhan Neo?

1. Death Benefit

In the unfortunate event of death of the Life Assured during the SBI Life Smart Swadhan Neo Plan policy term, the Sum Assured on Death will be payable to the Nominee in a lump sum.

Where Sum Assured on Death:

For Single Premium Policies: Higher of (Sum Assured or125% of Single Premium)

For Limited Premium Payment Term (LPPT) / Regular Premium (RP) Policies: Highest of (Sum Assured or 10 times of Annualized Premium or 105% of the total premiums paid till the date of death)

2. Maturity Benefit

On survival of the Life Assured up to maturity, 100% of the total premiums paid during the SBI Life Smart Swadhan Neo Plan policy tenure, shall be paid in a lump sum.

Grace period, Lapsed and Paid-up Policy and Revival of SBI Life Smart Swadhan Neo

For Regular and Limited pay policies

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.

Lapsed and Paid-up Policy

If the first full policy year’s premium has not been paid, the SBI Life Smart Swadhan Neo Plan 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 SBI Life Smart Swadhan Neo Plan policy shall cease and no benefit shall be payable under the Policy.

After completion of the first policy year, the policy acquires Reduced paid-up value only if at least the first full policy year premium(s) has been paid and thereafter premiums are not paid within the grace period, the policy shall continue as paid-up policy till maturity.

Paid-up Sum Assured on death = {Sum Assured on Death* (The total period for which premiums have already been paid / The maximum period for which premiums were originally payable)}

Revival

The policy may be revived within a period of five consecutive complete years from the date of the first unpaid premium and before the date of maturity.

Free Look Period for the SBI Life Smart Swadhan Neo

In case you disagree with any of the SBI Life Smart Swadhan Neo Plan policy terms and conditions, you have the option to return the policy within 30 days beginning from the date of receipt of the policy document, whether received electronically or otherwise.

Surrendering SBI Life Smart Swadhan Neo

Single Premium policies can be surrendered at any time during the SBI Life Smart Swadhan Neo Plan policy term.

LPPT and Regular Premium Policy: The policyholder can surrender the in-force policy or paid-up policy at any time during the policy term, after payment of at least one full policy year’s premium.

Guaranteed Surrender Value (GSV) or Special Surrender Value (SSV), whichever is higher, is paid as Surrender Value.

The policy acquires Guaranteed Surrender Value only if at least the first 2 full policy years’ premiums have been paid.

The SBI Life Smart Swadhan Neo Plan policy acquires Special Surrender Value after completion of the first policy year only if at least the first full policy year’s premium (s) has been paid.

What are the advantages of the SBI Life Smart Swadhan Neo?

Additional riders can be included with the base policy for enhanced coverage.
A policy loan is available, allowing up to 50% of the surrender value to be borrowed.

What are the disadvantages of the SBI Life Smart Swadhan Neo?

The sum assured may be insufficient to meet basic family needs.
The return of premium features raises the overall premium cost.
The SBI Life Smart Swadhan Neo Plan does not offer any bonus or loyalty additions.

Research Methodology of SBI Life Smart Swadhan Neo

With the SBI Life Smart Swadhan Neo plan, you pay a premium for life coverage, and if you outlive the policy term, you receive a maturity benefit—the premiums you’ve paid are returned upon survival.

However, the SBI Life Smart Swadhan Neo Plan offers no real value addition. Let’s calculate the IRR using the figures from the policy brochure to understand the returns.

Benefit Illustration – IRR Analysis of SBI Life Smart Swadhan Neo

For example, a 40-year-old male purchases the SBI Life Smart Swadhan Neo plan with a sum assured of ₹24 Lakhs. The policy term and premium payment term are both 25 years, and the annual premium is ₹28,595.

Male	40 years
Sum Assured	₹ 24,00,000
Policy Term	25 years
Premium Paying Term	25 years
Annualised Premium	₹ 28,595

Age	Year	Annualised premium / Maturity benefit	Death benefit
40	1	-28,595	24,00,000
41	2	-28,595	24,00,000
42	3	-28,595	24,00,000
43	4	-28,595	24,00,000
44	5	-28,595	24,00,000
45	6	-28,595	24,00,000
46	7	-28,595	24,00,000
47	8	-28,595	24,00,000
48	9	-28,595	24,00,000
49	10	-28,595	24,00,000
50	11	-28,595	24,00,000
51	12	-28,595	24,00,000
52	13	-28,595	24,00,000
53	14	-28,595	24,00,000
54	15	-28,595	24,00,000
55	16	-28,595	24,00,000
56	17	-28,595	24,00,000
57	18	-28,595	24,00,000
58	19	-28,595	24,00,000
59	20	-28,595	24,00,000
60	21	-28,595	24,00,000
61	22	-28,595	24,00,000
62	23	-28,595	24,00,000
63	24	-28,595	24,00,000
64	25	-28,595	24,00,000
65		7,14,875

	IRR	0.00%

Assuming he pays this premium consistently, he will receive ₹7,14,875 at maturity after 25 years. The IRR for this cash flow is zero as per the SBI Life Smart Swadhan Neo Plan maturity calculator since the plan doesn’t offer any additional benefits.

Essentially, the plan provides life cover for the term and simply returns the premiums if the insured survives. This results in a zero return on investment.

For life coverage, a pure-term policy would be a more efficient option. With SBI Life Smart Swadhan Neo, you’re paying a higher premium only to receive the premium back at the end of the term.

SBI Life Smart Swadhan Neo Vs. Other Investments

Comparing different products helps to better understand the benefits and limitations of the SBI Life Smart Swadhan Neo plan. In a pure-term life insurance policy, you pay a premium solely for life cover, with no return if you outlive the term.

However, the premium is significantly lower than with-profit or return-of-premium policies.

SBI Life Smart Swadhan Neo Vs. Pure-term + ELSS

For instance, a pure-term policy with a ₹24 Lakh sum assured costs ₹20,400 annually for a 25-year term. In comparison, the annual premium for the same coverage in SBI Life Smart Swadhan Neo is ₹28,595.

By choosing the pure-term option, you could save ₹8,195 each year, which can then be invested according to your risk tolerance.

Pure Term Life Insurance Policy
Sum Assured	₹ 24,00,000
Policy Term	25 years
Premium Paying Term	25 years
Annualised Premium	₹ 20,400
Investment	₹ 8,195

High-risk investors might consider equity-based options, while low-risk investors could choose debt instruments. In this example, we assume investing the surplus in an Equity Linked Savings Scheme (ELSS), an equity-focused instrument.

		Term insurance + ELSS
Age	Year	Term Insurance premium + ELSS	Death benefit
40	1	-28,595	24,00,000
41	2	-28,595	24,00,000
42	3	-28,595	24,00,000
43	4	-28,595	24,00,000
44	5	-28,595	24,00,000
45	6	-28,595	24,00,000
46	7	-28,595	24,00,000
47	8	-28,595	24,00,000
48	9	-28,595	24,00,000
49	10	-28,595	24,00,000
50	11	-28,595	24,00,000
51	12	-28,595	24,00,000
52	13	-28,595	24,00,000
53	14	-28,595	24,00,000
54	15	-28,595	24,00,000
55	16	-28,595	24,00,000
56	17	-28,595	24,00,000
57	18	-28,595	24,00,000
58	19	-28,595	24,00,000
59	20	-28,595	24,00,000
60	21	-28,595	24,00,000
61	22	-28,595	24,00,000
62	23	-28,595	24,00,000
63	24	-28,595	24,00,000
64	25	-28,595	24,00,000
65		11,12,052

	IRR	3.25%

After 25 years, the ELSS investment could grow to a pre-tax value of ₹12.23 Lakhs, with a post-tax value of ₹11.12 Lakhs, yielding a post-tax IRR of 3.25%.

ELSS Tax Calculation
Maturity value after 25 years	12,23,792
Purchase price	2,04,875
Long-Term Capital Gains	10,18,917
Exemption limit	1,25,000
Taxable LTCG	8,93,917
Tax paid on LTCG	1,11,740
Maturity value after tax	11,12,052

While the IRR may seem modest, this approach generates a larger corpus than the return-of-premium feature in the SBI Life Smart Swadhan Neo plan. By investing your surplus in alignment with your goals, you can build wealth more effectively.

This comparison highlights that return-of-premium policies carry a higher premium than pure-term policies, limiting their overall investment efficiency.

Final Verdict on SBI Life Smart Swadhan Neo

The SBI Life Smart Swadhan Neo plan provides life cover but offers no additional benefits beyond the return of premium at maturity, which is touted as a key advantage. However, this feature comes at a higher premium that may not be justified. Moreover, the sum assured under this plan may be inadequate to meet a family’s basic needs and also it has a high agent commission.

An IRR analysis shows that the plan yields no effective returns, while the comparison highlights the advantages of choosing a pure-term insurance policy for life coverage. The additional premium required for SBI Life Smart Swadhan Neo could be better utilized for wealth accumulation.

For comprehensive life protection, a pure-term life insurance policy is a better choice, offering high coverage at a more affordable premium. For wealth building, consider creating a diversified investment portfolio aligned with your financial goals, time horizon, and risk profile.

When it comes to financial advice, are Quora, Facebook, and Twitter the final word?

It’s also wise to consult a Certified Financial Planner (CFP) for goal-based financial planning. A CFP can help you select the right mix of investment and insurance products tailored to your needs.

SBI Life Smart Swadhan Neo Plan: Good or Bad? An Insightful Review

Table of Contents:

What is the SBI Life Smart Swadhan Neo?

What are the features of the SBI Life Smart Swadhan Neo?

Who is eligible for the SBI Life Smart Swadhan Neo?