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Is the Shriram Life Sunishchit Laabh Plan your key to secure savings, or is it just another option in an already crowded market?
Could the Shriram Life Sunishchit Laabh Plan be the perfect blend of savings and security, or does it fall short of its promises?
Does the Shriram Life Sunishchit Laabh Plan offer the long-term benefits you’re looking for, or are there hidden catches you should watch out for?
In this article, we will review its features, benefits, and drawbacks to help you make an informed decision.
Table of Contents
What is the Shriram Life Sunishchit Laabh Plan?
What are the features of the Shriram Life Sunishchit Laabh Plan?
Who is eligible for the Shriram Life Sunishchit Laabh Plan?
What are the life options in the Shriram Life Sunishchit Laabh Plan?
What are the benefits of the Shriram Life Sunishchit Laabh Plan?
Grace Period, Lapsed & Paid-up Policy and Revival of Shriram Life Sunishchit Laabh Plan
Free Look Period for Shriram Life Sunishchit Laabh Plan
Surrendering Shriram Life Sunishchit Laabh Plan
What are the advantages of the Shriram Life Sunishchit Laabh Plan?
What are the disadvantages of the Shriram Life Sunishchit Laabh Plan?
Research Methodology of Shriram Life Sunishchit Laabh Plan
Benefit Illustration – IRR Analysis of Shriram Life Sunishchit Laabh Plan
Shriram Life Sunishchit Laabh Plan Vs. Other Investments
Shriram Life Sunishchit Laabh Plan Vs. Pure-term + ELSS
Final Verdict on Shriram Life Sunishchit Laabh Plan
What is the Shriram Life Sunishchit Laabh Plan?
Shriram Life Sunishchit Laabh is a Non-Linked Non-Participating Individual Life Insurance Savings Plan. It provides you with two income pay-out options, two life cover options, and loyalty additions this plan combines life insurance with guaranteed long-term income up to 40 years.
What are the features of the Shriram Life Sunishchit Laabh Plan?
- Offers two life cover options: Life and Life Plus
- Provides guaranteed benefits along with loyalty additions
- Allows choice between two benefit payout options: Income Plus and Income Pro
- Flexible premium payment terms ranging from 7 to 25 years
- Option to select an income payout period between 10 to 40 years
Who is eligible for the Shriram Life Sunishchit Laabh Plan?
| Eligibility Criteria | Limits |
| Age at Entry | Minimum: 30 daysMaximum: 60 years (age last birthday) |
| Maturity Age | Minimum: 18 yearsMaximum: 76 years |
| Premium Paying Term (PPT) | 7 to 10 years (in multiple of 1 year)15 to 25 years (in multiple of 5 years) |
| Policy Term | For PPT 7 to 10 years – 11 yearsFor PPT 15 to 25 years – PPT+1 years |
| Maturity Benefit Payout Term | 10 to 40 years(Choice to receive maturity benefit in multiples of 5 years up to a maximum age of 101 years) |
| Premium Payment Mode (with modal factors) | Yearly: 1Half-Yearly: 0.5087
Quarterly: 0.2566 Monthly: 0.086 |
| Premium Range | Minimum: |
| Yearly: 30000Half-Yearly: 15500
Quarterly: 8000 Monthly: 3000 |
|
| Maximum: | |
| No limit, subject to board-approved underwriting policy | |
| Sum Assured | Minimum: 2,10,000Maximum: No limit, subject to Board approved underwriting policy. |
What are the life options in the Shriram Life Sunishchit Laabh Plan?
Life Cover options
Life option: Death Benefit is paid to your family in a lump sum
Life Plus options: Death sum assured is paid in equal monthly instalments, starting at the end of the month of death and continuing until the end of the Shriram Life Sunishchit Laabh plan policy term. The policy will continue as an in-force policy with a waiver of future premiums.
The guaranteed maturity benefit along with loyalty additions due, will also be payable.
Sum Assured variants
7 times of annualised premium
10 times of annualised premium
Maturity Benefit Payout options
Income Plus: the maturity benefit is paid as a Level Guaranteed Maturity Income in the form of regular income throughout the payout period.
Income Pro: the maturity benefit is paid as a Guaranteed Maturity Income in the form of regular income throughout the chosen payout term (except the final year), and the total premiums paid are returned as the last maturity payout.
What are the benefits of the Shriram Life Sunishchit Laabh Plan?
1.Death benefit
Death during the policy term
Life Option: The death sum assured will be paid immediately in a lump sum and the Shriram Life Sunishchit Laabh plan policy will be terminated.
Life Plus Option: The death sum assured will be paid in monthly instalments. If death occurs during premium payment, the remaining premiums will be waived.
After the policy term ends, the Guaranteed Maturity Income will continue to be paid, along with Loyalty Additions, under the Income Plus or Income Pro option.
Death after the policy term
The Guaranteed Maturity Income along with the Loyalty Additions will continue to be paid to the nominee/beneficiary for the chosen maturity income payout term, under both the Life and Life Plus options.
“Death Sum Assured” is defined as higher of
- 10 or 7 times the annualised premium as chosen by the policyholder
- 105% of the Total Premiums Paid till the date of death
- Surrender Value on the date of death
2.Maturity benefit
The maturity benefit will be paid out according to the chosen maturity benefit payout option – either the Income Plus option or the Income Pro option – over the selected payout period. “Maturity benefit payout” is defined as guaranteed maturity income along with Loyalty additions.
3.Loyalty Additions
Loyalty additions as a percentage of annualised premium shall be added to the “Guaranteed Maturity Income” for Income Plus and Income Pro maturity benefit options.
Grace Period, Lapsed & Paid-up Policy and Revival of Shriram Life Sunishchit Laabh Plan
Grace Period
A grace period of 30 days is allowed for payment of due premium for non-monthly modes and 15 days for monthly mode
Lapsed Policy
In case the premium remains unpaid at the expiry of the Grace Period during the first year, the Shriram Life Sunishchit Laabh plan policy will lapse if it has not acquired a Surrender Value and no further benefits shall be paid.
Paid-up Policy
If you discontinue paying your premiums but have paid at least one year premium in full and after completion of the first policy year, your policy will get converted into a paid-up policy.
Revival
A lapsed policy can be revived within a revival period of five years from the date of the first unpaid premium.
Free Look Period for Shriram Life Sunishchit Laabh Plan
If the Shriram Life Sunishchit Laabh plan policy holder disagrees with any of the terms or conditions, he/she has the option to return the policy within 30 days from the beginning of the date of receipt of the policy document, whether received electronically or otherwise.
Surrendering Shriram Life Sunishchit Laabh Plan
You have an option to surrender the Shriram Life Sunishchit Laabh plan policy after premiums have been paid for at least 1 year. The surrender value payable will be higher of Guaranteed Surrender Value or Special Surrender Value. No fee will be charged towards the processing of surrenders.
What are the advantages of the Shriram Life Sunishchit Laabh Plan?
- Loan available up to 90% of the Surrender Value, provided the annual interest payable does not exceed 50% of the maturity benefit payout.
- Enhanced protection with four optional riders.
- Higher benefits for higher premiums.
- Additional benefits for female policyholders.
- Flexibility to customize policy term, premium payment term, and benefit payout mode anytime during the policy tenure to suit your financial needs.
- The Life Plus option includes a waiver of premiums on death for added protection.
What are the disadvantages of the Shriram Life Sunishchit Laabh Plan?
- Life cover does not continue during the income payout period.
- Annual income benefits may result in unnecessary discretionary spending.
- Early payouts reduce the compounding effect on the investment.
- While the benefits are guaranteed, the overall returns are low.
Research Methodology of Shriram Life Sunishchit Laabh Plan
The maturity benefit in the form of regular income is a key highlight of the Shriram Life Sunishchit Plan. While it guarantees steady payouts, assessing the actual returns is crucial.
Let’s calculate the Internal Rate of Return (IRR) using figures from the Shriram Life Sunishchit Laabh plan policy brochure to help you make an informed decision.
Benefit Illustration – IRR Analysis of Shriram Life Sunishchit Laabh Plan
Consider a 35-year-old male opting for the Income Plus option, paying ₹1,00,000 annually for 10 years. The income payout period begins after the premium payment term, lasting 10 years, with a sum assured of ₹10 lakhs.
| Male | 35 years |
| Sum Assured | ₹ 10,00,000 |
| Policy Term | 11 years |
| Premium Paying Term | 10 years |
| Annualised Premium | ₹ 1,00,000 |
He receives a guaranteed income benefit of ₹1,65,735 per year for 10 years. The IRR for this cash flow is 4.70% as per the Shriram Life Sunishchit Laabh Plan maturity calculator, which is subpar.
| Age | Year | Annualised premium / Maturity benefit | Death benefit |
| 35 | 1 | -1,00,000 | 10,00,000 |
| 36 | 2 | -1,00,000 | 10,00,000 |
| 37 | 3 | -1,00,000 | 10,00,000 |
| 38 | 4 | -1,00,000 | 10,00,000 |
| 39 | 5 | -1,00,000 | 10,00,000 |
| 40 | 6 | -1,00,000 | 10,00,000 |
| 41 | 7 | -1,00,000 | 10,00,000 |
| 42 | 8 | -1,00,000 | 10,00,000 |
| 43 | 9 | -1,00,000 | 10,00,000 |
| 44 | 10 | -1,00,000 | 10,00,000 |
| 45 | 11 | 0 | 10,00,000 |
| 46 | 12 | 1,65,735 | |
| 47 | 13 | 1,65,735 | |
| 48 | 14 | 1,65,735 | |
| 49 | 15 | 1,65,735 | |
| 50 | 16 | 1,65,735 | |
| 51 | 17 | 1,65,735 | |
| 52 | 18 | 1,65,735 | |
| 53 | 19 | 1,65,735 | |
| 54 | 20 | 1,65,735 | |
| 55 | 1,65,735 | ||
| IRR | 4.70% |
Guaranteed income benefits are not beneficial if returns are lower than typical debt instruments. Moreover, the sum assured is insufficient to meet a family’s basic needs.
Overall, the Shriram Life Sunishchit Plan may not be ideal for achieving long-term financial goals, particularly when building a substantial corpus is essential.
Shriram Life Sunishchit Laabh Plan Vs. Other Investments
While the Shriram Life Sunishchit Laabh Plan guarantees all its benefits, its returns fail to outpace inflation over the long term. With subpar returns and low insurance coverage, this plan is not suitable for either an investment portfolio or an insurance portfolio.
Instead, you can allocate your savings more efficiently to achieve your financial milestones.
Shriram Life Sunishchit Laabh Plan Vs. Pure-term + ELSS
For life cover, a pure-term life insurance policy is the ideal choice. These policies come with affordable premiums, allowing you to invest the saved premium toward your life goals.
Risk-averse investors can opt for debt instruments like PPF, while those willing to take on risk can invest in equity instruments such as ELSS funds.
| Pure Term Life Insurance Policy | |
| Sum Assured | ₹ 10,00,000 |
| Policy Term | 11 years |
| Premium Paying Term | 10 years |
| Annualised Premium | ₹ 4,500 |
| Investment | ₹ 95,500 |
Consider a pure-term life insurance policy with a ₹10 lakh sum assured, costing ₹4,500 annually for 10 years. After paying the premium, you can invest the remaining ₹95,500 in an ELSS fund.
| Term insurance + ELSS | |||
| Age | Year | Term Insurance premium + ELSS | Death benefit |
| 35 | 1 | -1,00,000 | 10,00,000 |
| 36 | 2 | -1,00,000 | 10,00,000 |
| 37 | 3 | -1,00,000 | 10,00,000 |
| 38 | 4 | -1,00,000 | 10,00,000 |
| 39 | 5 | -1,00,000 | 10,00,000 |
| 40 | 6 | -1,00,000 | 10,00,000 |
| 41 | 7 | -1,00,000 | 10,00,000 |
| 42 | 8 | -1,00,000 | 10,00,000 |
| 43 | 9 | -1,00,000 | 10,00,000 |
| 44 | 10 | -1,00,000 | 10,00,000 |
| 45 | 11 | 0 | 10,00,000 |
| 46 | 12 | 1,65,735 | |
| 47 | 13 | 1,65,735 | |
| 48 | 14 | 1,65,735 | |
| 49 | 15 | 1,65,735 | |
| 50 | 16 | 1,65,735 | |
| 51 | 17 | 1,65,735 | |
| 52 | 18 | 1,65,735 | |
| 53 | 19 | 1,65,735 | |
| 54 | 20 | 1,65,735 | |
| 55 | 13,72,254 | ||
| IRR | 8.56% | ||
At the end of 10 years, the ELSS investment grows to ₹18.77 lakhs. After accounting for capital gains tax, the final corpus of ₹17.77 lakhs is shifted to an instrument yielding 7% returns.
From this, you can withdraw an annual income benefit, similar to the Shriram Life Sunishchit Laabh Plan, while still retaining ₹13.72 lakhs.
| ELSS Tax Calculation | |
| Maturity value after 10 years | 18,77,013 |
| Purchase price | 9,55,000 |
| Long-Term Capital Gains | 9,22,013 |
| Exemption limit | 1,25,000 |
| Taxable LTCG | 7,97,013 |
| Tax paid on LTCG | 99,627 |
| Maturity value after tax | 17,77,386 |
The IRR for this alternative strategy is 8.56%, significantly higher than the 4.70% return of the Shriram Life Sunishchit Laabh Plan. The returns improve further if annual withdrawals are avoided, allowing the investment to compound.
This strategy offers better returns, liquidity, and flexibility, which are lacking in the Shriram Life Sunishchit Laabh Plan.
Final Verdict on Shriram Life Sunishchit Laabh Plan
The Shriram Life Sunishchit Laabh Plan provides income payouts unaffected by market volatility. However, guaranteed benefits alone are not enough to achieve your financial goals.
A long-term investment with low returns will fail to keep up with rising costs due to inflation. Despite the word ‘Laabh’ (benefit) in its name, the plan offers little real benefit.
Under the “Income Plus” option, you receive regular income payouts, while in the “Income Pro” option, you get both income payouts and a return of premiums paid. However, neither option accounts for inflation, making them ineffective for long-term financial growth.
Additionally, the sum assured is too low and does not continue during the income payout period. Low returns, inadequate coverage, and lack of liquidity make this plan an unreliable financial choice and it also has high agent commission.
A better approach is to separate insurance from investments. A pure-term life insurance Shriram Life Sunishchit Laabh plan policy is the best way to protect your family, while a well-structured investment portfolio based on your risk tolerance ensures financial growth and goal achievement.
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