SBI Life Smart Swadhan Plus Review

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Anyone who is the breadwinner of the family is responsible for the financial requirement of the family. As a responsible person, you need to plan & fulfill all the requirements (goals) of the family even if you are not around.

To achieve your financial goals, SBI Life offers a product named Smart Swadhan Plus. It assures you of protecting your family’s financial needs in case of any unfortunate incident and also rewards you by returning the premium amount on your survival.

Is the SBI Life Smart Swadhan Plus plan good or bad?

What is the Internal Rate of Return(IRR) of this plan?

Will the advantages(pros) of this plan outweigh the disadvantages(cons) or it is the other way around?

How do the promises made by this plan in the official brochure pdf deliver compare to mutual funds and PPF?

These questions are common for an aware customer, it is necessary to do a thorough review before purchasing an investment product.

In this review article of the SBI Life Smart Swadhan Plus plan, let us find out whether this plan fits your investment basket or not.

SBI Life Smart Swadhan Plus Vs. Term Insurance + PPF / ELSS
SBI Life Smart Swadhan Plus vs SBI Life Smart Future Choices Plan –Review
SBI Life Smart Swadhan Plus vs SBI Life New Smart Samriddhi Plan – Review

13.)SBI Life Smart Swadhan Plus vs Other Investment Plans – Review Conclusion
14.)Final Verdict on SBI Life Smart Swadhan Plus – Good or Bad?

Introduction to SBI Life Smart Swadhan Plus

It is an Individual Non-linked Non-participating Life Insurance Savings Product. It offers life cover with the added advantage of getting your total premiums paid back on Maturity, provided the policy is in force.

It assures you of protecting your family’s financial needs in case of any unfortunate incident and also rewards you by returning the premium amount on your survival, offering you both affordable protection and a refund of premiums paid.

Before going into the review of the SBI Life Smart Swadhan Plus plan, please read the official brochure for more clarity, in this way, you can evaluate the good or bad aspects of this plan much better!

SBI Life Smart Swadhan Plus plan official brochure(pdf)

Now, let’s analyse the features of SBI Life Smart Swadhan Plus in short points.

Features of SBI Life Smart Swadhan Plus – Analysis

Option to pay premiums in one single payment(lump sum), over a certain time (5, 10, or 15 years), or for the duration of the policy term.
Get a Discount on premium rates for a high sum assured.
Flexibility to choose the policy term from 10 years to 30 years.
In case of survival till maturity, returns 100% of Total Premiums Paid under the Policy.

Who are eligible for the SBI Life Smart Swadhan Plus Plan?

Age at Entry	Minimum: 18 years	Maximum: 55 / 65 years
Maximum Age at Maturity	65 / 75 years
Basic Sum Assured	Minimum: 5,00,000	Maximum: No limit
Policy Term	Minimum: 10 years	Maximum: 30 years
Premium Frequency	Single / Yearly / Half-yearly / Quarterly / Monthly
Premium Payment Term	Single payment, 5 years, 10 years, 15 years, and Same as policy term
Premium Frequency Loading	Half-Yearly: 52.00% of annualized premium Quarterly: 26.50% of annualized premium Monthly: 8.90% of annualized premium
Premium	Minimum	Maximum
Premium	Single: 21,000 Yearly: 2,300 Half-yearly: 1,200 Quarterly: 650 Monthly: 250	Based on the basic sum assured

Review of Benefits under SBI Life Smart Swadhan Plus – Good or Bad?

Death benefit

In the unfortunate event of death of the Life Assured, Sum Assured on Death will be payable to the beneficiary. Where Sum Assured on Death:

For Single Premium (SP) Policies: Higher of

Basic Sum Assured or

1.25 times of Single Premium

For Limited Premium Payment Term (LPPT) / Regular Premium (RP) Policies: Higher of

Basic Sum Assured or

10 times of the Annualized Premium or

105% of the total premiums received up to the date of death

Maturity Benefit

100% of the total premiums paid during the policy’s term must be paid in a lump sum if the Life Assured survives until maturity.

Tax benefits

For the following, you can be qualified for tax benefits under SBI Life Smart Swadhan Plus: premiums paid under Section 80C of the Income Tax Act of 1961. The maximum tax deduction permitted is 10 times the amount of the assurance.

The Grace Period, Revival & Paid-up Value of SBI Life Smart Swadhan Plus – Good or Bad?

Grace period

The offers you 30 days grace period from the premium due date for yearly/half-yearly/ quarterly premium frequencies and 15 days for monthly premium frequency.

Revival

A lapsed policy may be revived within 5 consecutive years from the date of the first unpaid premium, subject to satisfactory proof of insurability as required by the Company from time to time.

Paid-up value

The policy will acquire paid-up value only if premiums have been paid for at least 2 consecutive years. Sum Assured on Death/maturity benefit will be reduced to the same proportion as the ratio of. the proportion of premiums paid to all premiums due under the policy.

Free look period of SBI Life Smart Swadhan Plus

In case you disagree with the terms and conditions, you have the option to return the policy within 15 days for policies sourced through any means other than electronic policies and policies obtained through distance marketing, and 30 days for electronic policies.

Surrendering SBI Life Smart Swadhan Plus – Analysis

Only after at least two years of uninterrupted premium payments will the policy start to accrue surrender value. On surrender, the higher of the Non-Guaranteed Special Surrender Value (SSV) and the Guaranteed Surrender Value (GSV) will be calculated and paid to the policyholder.

The Guaranteed Surrender Value is equal to GSV factors multiplied by the total premiums paid. The special surrender value is the best-estimated value of the future benefits available to the policyholder at the point of surrender.

Let’s review the Pros and cons of SBI Life Smart Swadhan Plus

Advantages of SBI Life Smart Swadhan Plus – Analysis

Premium paying terms & Policy terms can be chosen as per convenience.
There is no other specific advantage to this policy.

Disadvantages of SBI Life Smart Swadhan Plus – Analysis

There is no rider option.
A loan facility is not available.
It is a non-participating & non-linked policy, so the return on investment is ZERO.
No bonus or loyalty additions in this plan. Even traditional endowment policy provides loyalty additions for sticking to the policy throughout the term.

Research Methodology of SBI Life Smart Swadhan Plus

SBI Life Smart Swadhan Plus does not offer any other benefit other than returning the total premium paid. If we work out the Internal Rate of Return (IRR) for this cash flow, it will be zero. Though you may get back your money at the end of the policy term, the return is zero. Just for your reference, the calculation is given below.

Benefit Illustration & IRR Analysis(Internal Rate of Return i.e. Interest Rate) – SBI Life Smart Swadhan Plus

Male	40 Years
Sum Assured	₹ 50 Lakhs
Policy term	15 years
Premium paying term	15 years
Annual premium	₹ 67,950

A 40-year-old male buys SBI Life Smart Swadhan Plus for a sum assured of ₹ 50 lakhs. He would be paying an annual premium of ₹ 67,950 for 15 years. At the end of 15 years, the total premium paid so far (67950*15 = 10,19,250) is given as a maturity benefit.

Age	Year	Annualised premium / Maturity benefit	Death benefit
35	1	-67,950	50,00,000
36	2	-67,950	50,00,000
37	3	-67,950	50,00,000
38	4	-67,950	50,00,000
39	5	-67,950	50,00,000
40	6	-67,950	50,00,000
41	7	-67,950	50,00,000
42	8	-67,950	50,00,000
43	9	-67,950	50,00,000
44	10	-67,950	50,00,000
45	11	-67,950	50,00,000
46	12	-67,950	50,00,000
47	13	-67,950	50,00,000
48	14	-67,950	50,00,000
49	15	-67,950	50,00,000
50		10,19,250

	IRR	0.00%

In the above illustration, the IRR of SBI Life Smart Swadhan Plus is calculated at 0.00%.

Generally, under term insurance, you pay a premium for life cover & nothing is returned at the end of the policy term. With a term plan, you get a high cover at an affordable premium.

Under traditional life insurance policy, the premium is utilised for life cover & investment. Since it mixes both services, neither is beneficial in reality. The mortality charge is higher than pure term policy & also the return on investment is lesser than any investment product.

This SBI Life Smart Swadhan Plus doesn’t fit under any of the above categories. You pay the premium & get the life cover during the policy term. If you survive the policy term, the premium is just returned.

SBI Life Smart Swadhan Plus vs Other Investment Plans – Review

Suppose you opt for pure Term Insurance for the same Sum Assured i.e., ₹ 50 lakhs, the Premium is just ₹ 10,600 for a 40-year-old male. He can pay a Premium for the life cover as long as he wishes.

In the earlier illustration, the premium is ₹ 67,950 which is 6 times higher than the Pure Term Premium.

If you purchase a pure Term Insurance plan instead of SBI Life Smart Swadhan Plus for the same Sum Assured of ₹ 50 lakhs, you can save ₹ 57,350 each year. You can utilize this amount for investment.

SBI Life Smart Swadhan Plus Vs. Term Insurance + PPF / ELSS

Pure term insurance
Sum Assured	₹ 50 Lakhs
Policy term	15 years
Premium paying term	15 years
Annual premium	₹ 10,600
Investment	₹ 57,350

For comparison purposes, we have assumed ₹ 50 lakhs life cover. An adequate Life Cover is like a lifeboat in hard times, so it is advisable to take one.

Here, we have chosen PPF & ELSS as investment products just to show the returns under the debt & equity instrument.

		Term Insurance + PPF		Term insurance + ELSS
Age	Year	Term Insurance premium + PPF	Death benefit	Term Insurance premium + ELSS	Death benefit
35	1	-67,950	50,00,000	-67,950	50,00,000
36	2	-67,950	50,00,000	-67,950	50,00,000
37	3	-67,950	50,00,000	-67,950	50,00,000
38	4	-67,950	50,00,000	-67,950	50,00,000
39	5	-67,950	50,00,000	-67,950	50,00,000
40	6	-67,950	50,00,000	-67,950	50,00,000
41	7	-67,950	50,00,000	-67,950	50,00,000
42	8	-67,950	50,00,000	-67,950	50,00,000
43	9	-67,950	50,00,000	-67,950	50,00,000
44	10	-67,950	50,00,000	-67,950	50,00,000
45	11	-67,950	50,00,000	-67,950	50,00,000
46	12	-67,950	50,00,000	-67,950	50,00,000
47	13	-67,950	50,00,000	-67,950	50,00,000
48	14	-67,950	50,00,000	-67,950	50,00,000
49	15	-67,950	50,00,000	-67,950	50,00,000
50		15,55,412		23,94,551

	IRR	5.12%		10.09%

The IRR(Internal Rate of Return i.e. Interest Rate) of Term Insurance premium + PPF is calculated at 5.12% & Term Insurance + ELSS IRR is calculated at 10.09%.

If you are a risk-averse investor, choose debt instruments for your investment. If you have a high-risk profile, choose equity instruments. ELSS redemptions are taxable. Here, the post-tax value is taken for IRR Calculation. The ELSS tax calculation is given below.

ELSS Tax Calculation
Maturity value after 15 years	23,94,551
Less
Purchase price	8,60,250
Long-Term capital gains	15,34,301
Exemption Limit	1,00,000
Taxable LTCG	14,34,301
Tax paid on LTCG	1,43,430
Maturity Value after tax	22,51,121

Under PPF, you get a maturity value of ₹15.55 lakhs & the IRR works out to be 5.12%. The post-tax maturity value under ELSS is ₹23.94 lakhs & the IRR works out to be 10.09%.

By opting for a pure-term policy, you can save the premium & invest it for your goals. It is always a wise decision to choose an investment product based on your goals, time horizon & risk profile.

Now, let’s try to compare the good and bad aspects of SBI Life Smart Swadhan Plus with other SBI Life Plans!

SBI Life Smart Swadhan Plus vs SBI Life Smart Future Choices Plan –Review

Both plans are Individual, Non-Linked, Life Insurance Savings Products. But the difference is that SBI Life Smart Future Choices Plan is participating life insurance plan. Whereas, SBI Life Smart Swadhan Plus is a non-participating life insurance plan.

Click below To read the complete review of this plan.

SBI Life Smart Future Choices Plan Review: Is It a Smart Investment Choice?

SBI Life Smart Swadhan Plus vs SBI Life New Smart Samriddhi Plan – Review

Both plans are Individual Non-linked Non-participating Life Insurance Savings Products.

Read the official brochure(pdf) of SBI Life New Smart Samriddhi Plan here.

We have made a detailed review of this plan with IRR analysis and calculations.

SBI Life New Smart Samriddhi Plan Review: Is It Worth Buying?

SBI Life Smart Swadhan Plus vs Other Investment Plans – Review Conclusion

We have compared the SBI Life Smart Swadhan Plus plan with the review of all other investment plans and have concluded that pure term insurance + PPF or ELSS is a far better option.

After buying a new plan in the market it is always advisable to compare and evaluate with all other alternative investment options.

Final Verdict on SBI Life Smart Swadhan Plus – Good or Bad?

Any Life Insurance policy aims to provide financial security and protection to individuals and their families. There is a wide range of insurance policies with various add-on benefits.

Sometimes these add-on benefits pull down the purpose of the insurance policy, i.e., the sum assured is lowered. And also, the premium is hiked to fulfill both the insurance & investment aspect.

Term insurance policies only provide a death benefit and do not include a savings or investment component.

SBI Life Smart Swadhan Plus neither offers any add-on benefit nor acts like a pure Term Policy where nothing is returned at the end of the policy term.

If you are the breadwinner for your family & looking for a life insurance policy, then do not opt for SBI Life Smart Swadhan Plus or any other traditional plans or ULIPs. It is advisable to opt for a pure-term insurance policy. The pure-term policy offers high coverage & is cost-effective.

But still, insurance agents will try to push you into purchasing this plan. It is simply because of the high agent commission that they get for selling mediocre policies in the bazaar and not for your benefit.

Do you think you can make comprehensive financial planning for your family just by surfing through social media sites like Quora, Facebook, Twitter, etc? Please consult a qualified financial planner for reliable advice.

SBI Life Smart Swadhan Plus Review – Good or Bad?

Table of contents

Introduction to SBI Life Smart Swadhan Plus

Features of SBI Life Smart Swadhan Plus – Analysis

Who are eligible for the SBI Life Smart Swadhan Plus Plan?