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Do you want to lead a comfortable life without any financial hardship? To accomplish this, are you prepared for uncertainties?
SBI Life Smart Swadhan Supreme claims to empower your family to lead a fulfilling life, free from financial worries, even beyond your lifetime. How true is this? Will purchasing the SBI Life Smart Swadhan Supreme be a good or bad decision for your future well-being? We will find out through a detailed review and IRR analysis of SBI Life Smart Swadhan Supreme.
Let’s begin!
Table of Contents
1.)What is the SBI Life Smart Swadhan Supreme Plan?
2.)What are the Features of SBI Life Smart Swadhan Supreme Plan?
3.)Who is eligible for the SBI Life Smart Swadhan Supreme Plan?
4.)What are the Benefits of the SBI Life Smart Swadhan Supreme Plan?
5.)The grace period, Reduced paid-up, and Revival of SBI Life Smart Swadhan Supreme Plan – Analysis
6.)Free Look Period of SBI Life Smart Swadhan Supreme Plan
7.)Surrendering SBI Life Smart Swadhan Supreme Plan
8.)What are the advantages of the SBI Life Smart Swadhan Supreme Plan?
9.)What are the disadvantages of the SBI Life Smart Swadhan Supreme Plan?
10.)Research Methodology of SBI Life Smart Swadhan Supreme Plan
- Benefit Illustration – IRR(Internal Rate of return i.e. Interest Rate) Analysis of the SBI Life Smart Swadhan Supreme Plan
11.)SBI Smart Swadhan Supreme Plan vs Other Investment Products
- SBI Smart Swadhan Supreme Plan Vs. Pure Term + PPF / ELSS
- SBI Smart Swadhan Supreme Plan vs SBI Life Saral Swadhan Plus Plan
- SBI Smart Swadhan Supreme Plan vs SBI Life Smart Wealth Assure Plan
12.)Final Verdict on SBI Life Smart Swadhan Supreme – Good or Bad Investment Option?
1.)What is the SBI Life Smart Swadhan Supreme Plan?
SBI Life Smart Swadhan Supreme Plan is an Individual, Non- Linked, Non-Participating, Life insurance Savings product with a Return of Premium. It provides life cover throughout the SBI Life Smart Swadhan Supreme policy term and also returns the total premium paid at the end of the policy term, upon survival.
Read the SBI Life Smart Swadhan Supreme Policy brochure for more details.
2.)What are the Features of SBI Life Smart Swadhan Supreme Plan?
- Life Insurance covers you at an affordable cost to protect yourself.
- Pay premium regularly or for a limited period – 7/10/15 years
- Flexibility in choosing the policy term from 10 years to 30 years
- Get 100% of Total Premiums Paid as a Maturity benefit.
- Avail Tax Benefits as per the prevailing norms under the Income Tax Act, 1961
3.)Who is eligible for the SBI Life Smart Swadhan Supreme Plan?
| Minimum | Maximum | |
| Age at entry | 18 years | 60 years |
| Maximum age at Maturity | 75 years | |
| Basic Sum Assured | 25 Lakhs | No limit |
| Policy Term / Premium Paying Term | Premium Payment option | Policy Term |
| 7 /10 years | 15 to 30 years | |
| 15 years | 20 to 30 years | |
| Regular premium | 10 to 30 years | |
| Premium Frequency | Yearly, Half-yearly, and Monthly | |
4.)What are the Benefits of the SBI Life Smart Swadhan Supreme Plan?
Death Benefit
In the unfortunate event of death of the Life Assured during the SBI Life Smart Swadhan Supreme policy term, the Sum Assured on Death will be payable to the beneficiary in a lump sum.
Sum assured on death will be higher of:
- Basic Sum Assured or
- 11 times of Annualised Premium or
- 105% of the Total Premiums received up to the date of death.
Maturity Benefit
On survival of the Life Assured till the end of the SBI Life Smart Swadhan Supremepolicy term, 100% of the total premiums paid during the SBI Life Smart Swadhan Supreme policy tenure, shall be paid in a lump sum.
5.)The grace period, Reduced paid-up, and Revival of SBI Life Smart Swadhan Supreme Plan – Analysis
Grace Period
In the SBI Life Smart Swadhan Supreme Plan, 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.
Reduced paid-up
The SBI Life Smart Swadhan Supreme policy will acquire paid-up benefit only if premiums have been paid for at least two full policy years and thereafter premiums are not paid within the grace period, the policy shall continue as a paid-up policy till maturity.
Revival
The SBI Life Smart Swadhan Supreme policy can be reinstated within five consecutive years from the initial unpaid premium date and prior to the maturity date.
6.)Free Look Period of SBI Life Smart Swadhan Supreme Plan
If the SBI Life Smart Swadhan Supreme policyholder disagrees with any of the terms and conditions, the policyholder can choose to return the SBI Life Smart Swadhan Supreme policy within 15 days (or 30 days for policies sold through distance mode and electronic policies) from the receipt date of the policy document.
7.)Surrendering SBI Life Smart Swadhan Supreme Plan
The Surrender Value is applicable to the SBI Life Smart Swadhan Supreme policy only when a minimum of two full policy years’ premiums have been paid. The SBI Life Smart Swadhan Supreme policyholder may terminate the policy during the policy term by surrendering the policy for a surrender value. The surrender value is higher than the Guaranteed Surrender Value (GSV) or Special Surrender Value (SSV).
8.)What are the advantages of the SBI Life Smart Swadhan Supreme Plan?
- SBI Life Smart Swadhan Supreme Policy term, Premium paying term, and Premium paying frequency can be chosen as per convenience.
9.)What are the disadvantages of the SBI Life Smart Swadhan Supreme Plan?
- No loan facility is available under this product.
- No loyalty addition or any bonus under this plan.
- The premium paid is returned at maturity without any value addition.
10.)Research Methodology of SBI Life Smart Swadhan Supreme Plan
The basic purpose of taking a Life Insurance policy is to financially support the family. Under SBI Life Smart Swadhan Supreme, this is served by the death benefit. On the other hand, if the policyholder survives, he gets back the premium as such.
There is no value addition to the cost (Premium). So, the calculation of the Internal Rate of Return will result in zero. You can understand this better with the help of a benefit illustration.
Benefit Illustration – IRR(Internal Rate of return i.e. Interest Rate) Analysis of the SBI Life Smart Swadhan Supreme Plan
Miss Sharma, a 30-year-old corporate worker, chooses SBI’s Smart Swadhan Supreme life insurance for ₹1 crore coverage over 30 years, paying premiums regularly. Her premium for this life cover is ₹ 22,096 p.a.
| Female | 30 years |
| Sum Assured | ₹ 1 Crore |
| Policy Term | 30 years |
| Premium Paying term | 30 years |
| Annualised premium | ₹ 22,096 |
| Age | Year | Annualised premium / Maturity benefit | Death benefit |
| 31 | 1 | -22,096 | 1,00,00,000 |
| 32 | 2 | -22,096 | 1,00,00,000 |
| 33 | 3 | -22,096 | 1,00,00,000 |
| 34 | 4 | -22,096 | 1,00,00,000 |
| 35 | 5 | -22,096 | 1,00,00,000 |
| 36 | 6 | -22,096 | 1,00,00,000 |
| 37 | 7 | -22,096 | 1,00,00,000 |
| 38 | 8 | -22,096 | 1,00,00,000 |
| 39 | 9 | -22,096 | 1,00,00,000 |
| 40 | 10 | -22,096 | 1,00,00,000 |
| 41 | 11 | -22,096 | 1,00,00,000 |
| 42 | 12 | -22,096 | 1,00,00,000 |
| 43 | 13 | -22,096 | 1,00,00,000 |
| 44 | 14 | -22,096 | 1,00,00,000 |
| 45 | 15 | -22,096 | 1,00,00,000 |
| 46 | 16 | -22,096 | 1,00,00,000 |
| 47 | 17 | -22,096 | 1,00,00,000 |
| 48 | 18 | -22,096 | 1,00,00,000 |
| 49 | 19 | -22,096 | 1,00,00,000 |
| 50 | 20 | -22,096 | 1,00,00,000 |
| 51 | 21 | -22,096 | 1,00,00,000 |
| 52 | 22 | -22,096 | 1,00,00,000 |
| 53 | 23 | -22,096 | 1,00,00,000 |
| 54 | 24 | -22,096 | 1,00,00,000 |
| 55 | 25 | -22,096 | 1,00,00,000 |
| 56 | 26 | -22,096 | 1,00,00,000 |
| 57 | 27 | -22,096 | 1,00,00,000 |
| 58 | 28 | -22,096 | 1,00,00,000 |
| 59 | 29 | -22,096 | 1,00,00,000 |
| 60 | 30 | -22,096 | 1,00,00,000 |
| 6,62,880 | |||
| IRR | 0.00% |
The total premium paid for the 30 years amounts to ₹ 6.62 Lakhs. This amount is returned at maturity. Analysing the cash flow, we find that the internal rate of return (IRR) is zero. In SBI Life Smart Swadhan Supreme, there is no other additional benefit, other than life cover. But the life cover premium is costlier than a Pure Term Life Insurance Policy.
11.)SBI Smart Swadhan Supreme Plan vs Other Investment Products
This comparison part will depict, how economically you avail a Pure Term Life Insurance policy for the same assured of ₹ 1 Crore. This is to show the difference in premium and how we could optimise the surplus premium. Let us understand this with two scenarios.
SBI Smart Swadhan Supreme Plan Vs. Pure Term + PPF / ELSS
For a sum assured of ₹ 1 Crore, a pure term life insurance policy will cost you just ₹ 12,700 p.a. The policy term and premium paying term is 30 years. In the earlier illustration, for the same metric, the premium is ₹ 22,096. You could save ₹ 9,396 by opting for a Pure Term Life Insurance Policy.
| Pure Term Life Insurance Policy | |
| Sum Assured | ₹ 1 Crore |
| Policy Term | 30 years |
| Premium Paying term | 30 years |
| Annualised premium | ₹ 12,700 |
| Investment | ₹ 9,396 |
You could invest these savings in any instrument of your choice, thereby you can accumulate a better corpus than SBI Life Smart Swadhan Supreme. The following table illustrates two scenarios by investing the surplus amount in PPF or ELSS.
| Term Insurance + PPF | Term insurance + ELSS | ||||
| Age | Year | Term Insurance premium + PPF | Death benefit | Term Insurance premium + ELSS | Death benefit |
| 31 | 1 | -22,096 | 1,00,00,000 | -22,096 | 1,00,00,000 |
| 32 | 2 | -22,096 | 1,00,00,000 | -22,096 | 1,00,00,000 |
| 33 | 3 | -22,096 | 1,00,00,000 | -22,096 | 1,00,00,000 |
| 34 | 4 | -22,096 | 1,00,00,000 | -22,096 | 1,00,00,000 |
| 35 | 5 | -22,096 | 1,00,00,000 | -22,096 | 1,00,00,000 |
| 36 | 6 | -22,096 | 1,00,00,000 | -22,096 | 1,00,00,000 |
| 37 | 7 | -22,096 | 1,00,00,000 | -22,096 | 1,00,00,000 |
| 38 | 8 | -22,096 | 1,00,00,000 | -22,096 | 1,00,00,000 |
| 39 | 9 | -22,096 | 1,00,00,000 | -22,096 | 1,00,00,000 |
| 40 | 10 | -22,096 | 1,00,00,000 | -22,096 | 1,00,00,000 |
| 41 | 11 | -22,096 | 1,00,00,000 | -22,096 | 1,00,00,000 |
| 42 | 12 | -22,096 | 1,00,00,000 | -22,096 | 1,00,00,000 |
| 43 | 13 | -22,096 | 1,00,00,000 | -22,096 | 1,00,00,000 |
| 44 | 14 | -22,096 | 1,00,00,000 | -22,096 | 1,00,00,000 |
| 45 | 15 | -22,096 | 1,00,00,000 | -22,096 | 1,00,00,000 |
| 46 | 16 | -22,096 | 1,00,00,000 | -22,096 | 1,00,00,000 |
| 47 | 17 | -22,096 | 1,00,00,000 | -22,096 | 1,00,00,000 |
| 48 | 18 | -22,096 | 1,00,00,000 | -22,096 | 1,00,00,000 |
| 49 | 19 | -22,096 | 1,00,00,000 | -22,096 | 1,00,00,000 |
| 50 | 20 | -22,096 | 1,00,00,000 | -22,096 | 1,00,00,000 |
| 51 | 21 | -22,096 | 1,00,00,000 | -22,096 | 1,00,00,000 |
| 52 | 22 | -22,096 | 1,00,00,000 | -22,096 | 1,00,00,000 |
| 53 | 23 | -22,096 | 1,00,00,000 | -22,096 | 1,00,00,000 |
| 54 | 24 | -22,096 | 1,00,00,000 | -22,096 | 1,00,00,000 |
| 55 | 25 | -22,096 | 1,00,00,000 | -22,096 | 1,00,00,000 |
| 56 | 26 | -22,096 | 1,00,00,000 | -22,096 | 1,00,00,000 |
| 57 | 27 | -22,096 | 1,00,00,000 | -22,096 | 1,00,00,000 |
| 58 | 28 | -22,096 | 1,00,00,000 | -22,096 | 1,00,00,000 |
| 59 | 29 | -22,096 | 1,00,00,000 | -22,096 | 1,00,00,000 |
| 60 | 30 | -22,096 | 1,00,00,000 | -22,096 | 1,00,00,000 |
| 9,67,845 | 23,23,890 | ||||
| IRR | 2.34% | 7.21% | |||
Under the PPF account, the final maturity value is ₹ 9.67 Lakhs. The IRR calculation for the Pure Term Insurance policy along with PPF Investment results in 2.34%. One might think, the return is lesser than the inflation rate. We would like to highlight the fact that they charge you more premium for the same assured. This extra premium could be diverted towards investment. At the end of 30 years, you get better corpus compared to SBI Life Smart Swadhan Supreme.
There is a capital gains tax under the ELSS fund while redeeming the units. The pre-tax value is ₹ 25.39 Lakhs. We need to set aside the tax liability from the proceeds. This leaves you with an after-tax maturity value of ₹ 23.23 Lakhs. The IRR calculation for the Pure Term Insurance policy along with ELSS Investment results in 7.21% (post-tax return). This rate of return is higher than the inflation rate and you accumulate a sizeable corpus at the end of 30 years.
| ELSS Tax Calculation | |
| Maturity value after 30 years | 25,39,669 |
| Purchase price | 2,81,880 |
| Long-Term Capital Gains | 22,57,789 |
| Exemption limit | 1,00,000 |
| Taxable LTCG | 21,57,789 |
| Tax paid on LTCG | 2,15,779 |
| Maturity value after tax | 23,23,890 |
SBI Life Smart Swadhan Supreme Plan returns you the premium at the end of the policy term for which they charge you more than the premium required to protect your life. We hope the scenarios and their calculations give you better insights into picking the Life Insurance Policy. The Pure Term Life Insurance Policy is always the right choice.
SBI Smart Swadhan Supreme Plan vs SBI Life Saral Swadhan Plus Plan
Dive into the key features of the SBI Smart Swadhan Supreme Plan,
- Life insurance that is simple to issue
- Make recurring premium payments or set a time restriction (7/10/15 years).
- flexibility in selecting a duration for the policy ranging from 10 to 30 years
Read the complete analysis of the SBI Life Saral Swadhan Plus Plan.
SBI Smart Swadhan Supreme Plan vs SBI Life Smart Wealth Assure Plan
Dive into the key features of SBI Life’s Smart Wealth Assure plan!
- Make a single payment and receive benefits for the duration of the policy.
- Liquidity by Partial Withdrawal(s) following the fifth anniversary of the program
- An option to add an accidental death benefit to the product is available.
Read the complete analysis of the SBI Life Smart Wealth Assure Plan.
12.)Final Verdict on SBI Life Smart Swadhan Supreme Plan – Good or Bad Investment Option?
SBI Life Smart Swadhan Supreme Plan is a modified Pure term life insurance policy where the death benefit is paid or else the premium is returned on survival. This feature may look catchy for an investor. But unfortunately, you have to pay extra to avail of the benefit.
The extra premium can be invested as per your preferences. This investment will yield you better than the return of premium under SBI Life Smart Swadhan Supreme. Beware of insurance agents who try to sell you the SBI Life Smart Swadhan Supreme plan for their agent commission!
For insurance basket without profit / without return of premium policy is the right choice. A Pure Term Life Insurance Policy offers high coverage at an affordable premium. This will protect your family from uncertainties.
Before choosing an insurance policy, understand the benefits in detail. Don’t form an opinion just by surfing through social media sites like Quora, Facebook, Twitter, etc. Consult a financial advisor if you find any difficulties in choosing any insurance or investment product.
Consult a Certified Financial Planner for goal-based financial planning to empower your dreams.
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