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Will the SBI Life Smart Wealth Assure plan help you grow your wealth?
Should SBI Life Smart Wealth Assure be a part of your Investment Portfolio?
Life becomes more sensible and meaningful when you can add more value to yourself over time. To achieve this state, you need to be financially prepared.
Could investing in SBI Life Smart Wealth Assure help you cross all the Financial Barriers of life?
Let us first review the SBI Life Smart Wealth Assure Plan’s Advantages (pros) and Disadvantages (Cons).
This detailed analysis will help figure out whether SBI Life Smart Wealth Assure help you to be financially prepared for your future goals. The critical insights from this research will help to make an informed Investment Decision.
Table of Contents
1.) What is SBI Life Smart Wealth Assure?
2.) What are the Features of SBI Life Smart Wealth Assure?
3.) What is the Eligibility Criteria of SBI Life Smart Wealth Assure?
4.) What are the Benefits of SBI Life Smart Wealth Assure?
5.) Various charges under SBI Life Smart Wealth Assure
6.) SBI Life Smart Wealth Assure Free Look Period
7.) Surrendering SBI Life Smart Wealth Assure
8.) Advantages of SBI Life Smart Wealth Assure
9.) Disadvantages of SBI Life Smart Wealth Assure
10.) SBI Life Smart Wealth Assure Research Methodology
- SBI Life Smart Wealth Assure Benefit Illustration – IRR Analysis
11.) Comparison VS Other Investment
- SBI Life Smart Wealth Assure Vs. Pure Term + ELSS
- SBI Life Smart Wealth Assure Plan VS SBI Life Smart Annuity Plus Plan
- SBI Life Smart Wealth Assure Plan VS SBI Life Smart Humsafar Plan
12.) Final Verdict on SBI Life Smart Wealth Assure
1.) What is SBI Life Smart Wealth Assure?
SBI Life – Smart Wealth Assure is a non-participating, Individual, Unit-Linked, Life Insurance Product.
It is a single premium product, where you pay the premiums once and you can enjoy the benefits throughout the policy term.
This Product offers Market-Linked Returns along with Insurance Cover.
2.) What are the Features of SBI Life Smart Wealth Assure?
- Pay only once and get the benefits throughout the Policy Term
- Liquidity through Partial Withdrawal(s) after 5th policy anniversary
- Option to customize the product with an Accidental Death Benefit Option.
- Option to choose from a mix of funds providing Market Linked Returns
- There is a choice of 7 funds.
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3.) What is the Eligibility Criteria of SBI Life Smart Wealth Assure?
| Minimum | Maximum | |
| Age at Entry | 8 years | 60 years |
| Age at Maturity | 70 years | |
| Premium | 50,000 | No limit |
| Premium Mode | Single premium | |
| Policy Term | 10 years | 30 years |
| Basic Sum Assured | Single Premium * 1.25 | |
| Accident Death benefit option | Minimum Entry age: 16 years | Maximum Entry age: 60 years |
| Maximum age at Maturity: 70 Years | ||
| Minimum Sum Assured: 25,000 | Maximum Sum Assured:50 Lakhs | |
4.) What are the Benefits of SBI Life Smart Wealth Assure?
SBI Life Smart Wealth Assure Maturity benefit
If the Policyholder survives till maturity, then the Fund value will be paid in a lump sum.
SBI Life Smart Wealth Assure Death benefit
In case of death, while the policy is in force, the highest of the following is payable.
- Your Fund Value as of the date of death intimation or
- Basic Sum Assured Less Applicable Partial Withdrawals (APW)
Death Benefits can be received either as a lump sum or in installments.
SBI Life Smart Wealth Assure Fund Options
In the Fund Options available, you can invest in one or any combination in multiple of 1%.
| Name of the fund | Equity and Equity Related Instruments | Debt Instruments | Money Market Instruments | Risk Profile |
| Pure Fund | 80-100% | NIL | 0-20% | High |
| Bond Fund | NIL | 60-100% | 0-40% | Low to Medium |
| Bond Optimiser Fund | 0-25% | 0-25% | 75-100% | Low to Medium |
| Balanced Fund | 40-60% | 0-40% | 20-60% | Medium |
| Equity Fund | 80-100% | 0-20% | 0-20% | High |
| Money Market Fund | NIL | 0-20% | 80-100% | Low |
| Corporate Bond | Debt Instruments | Money Market Instruments | ||
| Corporate Bond Fund | 70-100% | 0-30% | 0-30% | Low to Medium |
| Government Securities | Money Market Instruments | |||
| Discontinued Policy Fund | 60-100% | 0-40% | Low |
The asset allocation differs under each fund option. The risk profile is based on the asset allocation. You should pick funds that suit your risk profile.
5.) Various charges under SBI Life Smart Wealth Assure
Premium Allocation Charges:
The allocation charge is 3.00% of Single Premium.
Policy Administration Charges:
A monthly Policy administration Charge of ₹ 45 shall be deducted for the first five years.
Fund Management Charges:
| Fund Name | Fund Management Charge |
| Pure Fund | 1.35% |
| Bond Fund | 1.00% |
| Bond Optimiser Fund | 1.15% |
| Balanced Fund | 1.25% |
| Equity Fund | 1.35% |
| Money Market Fund | 0.25% |
| Corporate Bond Fund | 1.15% |
| Discontinued Policy Fund | 0.50% |
Discontinuance charges:
Discontinuance charges are calculated as a percentage of a Single Premium or Fund Value. It varies according to the year of discontinuance.
Mortality Charges:
Mortality charges are deducted each policy month from Fund Value by way of cancellation of units. This is charged based on your age and Sum at Risk.
Accidental Death Benefit Charges:
Charges are recovered every month.
Monthly Charges = Accidental Death Benefit Sum Assured x (Annual rate / 12)
Where the Annual Rate is ₹ 0.50 per ₹ 1000 Accident Benefit amount.
Switching Charge:
A charge of ₹ 100 is applicable for every switch, more than two free switches in the same policy year during the policy term.
Partial withdrawal charges:
A charge of ₹ 100 per withdrawal over one free partial withdrawal in the same policy year during the policy term.
Inference from these charges:
Your premium is not directly invested in the chosen fund. After the deduction of all these charges, the Premium is diverted into investment.
In other market-linked products, there won’t be charges under different heads. In the long run, these charges gradually pull down the overall returns.
6.) SBI Life Smart Wealth Assure Free Look Period
If you disagree with any of the terms and conditions; you have the option to return the policy within 15 days for policies sourced through any channel mode other than Distance Marketing and for electronic policies.
It takes 30 days for policies opted through Distance Marketing and for electronic policies. The Free Look Period starts from the day the policy document is received.
To help you understand policy terms and conditions better you can refer to SBI Life Smart Wealth Assure Policy Brochure
7.) Surrendering SBI Life Smart Wealth Assure
If surrender is requested during the first 5 Policy years, then your Fund Value after the deduction of the applicable discontinuance charge will be transferred to the Discontinued Policy Fund.
The Fund Value provided will be due on the 1st working day of the 6th policy year.
If the surrender is requested any time after the completion of 5 policy years, then the Fund Value will be paid immediately and the policy will terminate.
8.) Advantages of SBI Life Smart Wealth Assure
- Added protection by choosing the Accidental Death Benefit Option.
- If the settlement option is chosen then the death benefit is paid in installments.
- Two free switches and one free Partial withdrawal are allowed in a policy year.
9.) Disadvantages of SBI Life Smart Wealth Assure
- The Lock-in period is 5 years.
- A Loan Facility is not available.
10.) SBI Life Smart Wealth Assure Research Methodology
Any investment needs to be assessed in terms of returns before investing. The potential returns of SBI Life Smart Wealth Assure are estimated in the following segment.
This will give you better clarity about the plan. The potential returns of SBI Life Smart Wealth Assure can be compared with other investment returns.
SBI Life Smart Wealth Assure Benefit Illustration – IRR Analysis
A 35-year-old male buys SBI Life Smart Wealth Assure for a sum assured of ₹12 Lakhs. The policy term is 20 years. The single premium is ₹ 10 Lakhs.
| Male | 35 years |
| Basic Sum Assured | 12,50,000 |
| Policy Term | 20 years |
| Single Premium | 10,00,000 |
At the end of the policy term, the fund value is receivable. Fund Value figures are for illustrative purposes. Please note that the assumed rates of returns @4% and @8% p.a. are only illustrative scenarios. These are not upper or lower bounds on returns, nor are they guaranteed.
| At 4% p.a. | At 8% p.a. | ||||
| Age | Year | Annualised premium / Maturity benefit | Death benefit | Annualised premium / Maturity benefit | Death benefit |
| 35 | 1 | -10,00,000 | 12,50,000 | -10,00,000 | 12,50,000 |
| 36 | 2 | 0 | 12,50,000 | 0 | 12,50,000 |
| 37 | 3 | 0 | 12,50,000 | 0 | 12,50,000 |
| 38 | 4 | 0 | 12,50,000 | 0 | 12,50,000 |
| 39 | 5 | 0 | 12,50,000 | 0 | 12,50,000 |
| 40 | 6 | 0 | 12,50,000 | 0 | 12,50,000 |
| 41 | 7 | 0 | 12,50,000 | 0 | 12,50,000 |
| 42 | 8 | 0 | 12,50,000 | 0 | 12,50,000 |
| 43 | 9 | 0 | 12,50,000 | 0 | 12,50,000 |
| 44 | 10 | 0 | 12,50,000 | 0 | 12,50,000 |
| 45 | 11 | 0 | 12,50,000 | 0 | 12,50,000 |
| 46 | 12 | 0 | 12,50,000 | 0 | 12,50,000 |
| 47 | 13 | 0 | 12,50,000 | 0 | 12,50,000 |
| 48 | 14 | 0 | 12,50,000 | 0 | 12,50,000 |
| 49 | 15 | 0 | 12,50,000 | 0 | 12,50,000 |
| 50 | 16 | 0 | 12,50,000 | 0 | 12,50,000 |
| 51 | 17 | 0 | 12,50,000 | 0 | 12,50,000 |
| 52 | 18 | 0 | 12,50,000 | 0 | 12,50,000 |
| 53 | 19 | 0 | 12,50,000 | 0 | 12,50,000 |
| 54 | 20 | 0 | 12,50,000 | 0 | 12,50,000 |
| 55 | 15,26,711 | 12,50,000 | 32,55,919 | 12,50,000 | |
| IRR | 2.14% | 6.08% | |||
| Amount Invested | Fund Value | IRR | |
| At 4% | 10,00,000 | 15,26,711 | 2.14% |
| At 8% | 10,00,000 | 32,55,919 | 6.08% |
The fund value under the 4% scenario is ₹ 15.26 Lakhs and the IRR at the 4% scenario is 2.14%. The fund value under the 8% scenario is ₹ 32.55 Lakhs and the IRR at the 8% scenario is 6.08%.
As an investor, you should look for an investment return that can comfortably beat inflation. Here, the IRR seems to be lower than the inflation. In the long run, it is evident that you can’t achieve your milestones by investing in SBI Life Smart Wealth Assure.
11.) SBI Life Smart Wealth Assure VS Other Investment
A comparison with other investments gives you a better insight. Let us take the same illustration for comparison.
A Life Cover and a Market-Related Investment option with a one-time lump sum payment are the criteria for alternate investments.
A Pure-Term Life Insurance Policy and an ELSS Fund will be the perfect choice. Let us understand how this combination works.
i) SBI Life Smart Wealth Assure Vs. Pure Term + ELSS
A pure term policy for a Sum Assured of ₹ 12, 50,000 would cost ₹ 76,200 (single premium). The policy term is 20 years. You can invest the balance amount of ₹ 9, 23, 800 in an ELSS fund.
At the end of 20 years, while exiting the fund, capital gains tax is payable. Let us set aside the tax payable from the proceeds. Tax calculation is given below.
| Pure Term Insurance Policy | |
| Basic Sum Assured | 12,50,000 |
| Policy Term | 20 years |
| Single Premium | 76,200 |
| ELSS Fund | 9,23,800 |
| Term insurance + ELSS | |||
| Age | Year | Term Insurance premium + ELSS | Death benefit |
| 35 | 1 | -10,00,000 | 12,50,000 |
| 36 | 2 | 0 | 12,50,000 |
| 37 | 3 | 0 | 12,50,000 |
| 38 | 4 | 0 | 12,50,000 |
| 39 | 5 | 0 | 12,50,000 |
| 40 | 6 | 0 | 12,50,000 |
| 41 | 7 | 0 | 12,50,000 |
| 42 | 8 | 0 | 12,50,000 |
| 43 | 9 | 0 | 12,50,000 |
| 44 | 10 | 0 | 12,50,000 |
| 45 | 11 | 0 | 12,50,000 |
| 46 | 12 | 0 | 12,50,000 |
| 47 | 13 | 0 | 12,50,000 |
| 48 | 14 | 0 | 12,50,000 |
| 49 | 15 | 0 | 12,50,000 |
| 50 | 16 | 0 | 12,50,000 |
| 51 | 17 | 0 | 12,50,000 |
| 52 | 18 | 0 | 12,50,000 |
| 53 | 19 | 0 | 12,50,000 |
| 54 | 20 | 0 | 12,50,000 |
| 55 | 81,22,501 | 12,50,000 | |
| IRR | 11.04% | ||
The fund value at the end of 20 years is ₹ 89.11 Lakhs. The post-tax value is ₹ 81.22 Lakhs. The IRR for this combo is 11.04% (post-tax return).
| Amount Invested | Fund Value | IRR | |
| ELSS (Post-tax) | 10,00,000 | 81,22,501 | 11.04% |
| ELSS Tax Calculation | |
| Maturity value after 20 years | 89,11,246 |
| Purchase price | 9,23,800 |
| Long-Term capital gains | 79,87,446 |
| Exemption limit | 1,00,000 |
| Taxable LTCG | 78,87,446 |
| Tax paid on LTCG | 7,88,745 |
| Maturity value after tax | 81,22,501 |
IRR of this alternate option is greater than the inflation rate. And you have better access to liquidity in this Alternate Investment Option.
In addition to that, you can take the required life cover to protect your family from uncertainties. The returns and life cover is inadequate in SBI Life Smart Wealth Assure.
ii) SBI Life Smart Wealth Assure Plan VS SBI Life Smart Annuity Plus Plan
Just like the SBI Life Smart Wealth Assure Plan, it is another hassle-free investment vehicle with only a lumpsum option available. It offers Guaranteed Lifelong Regular Income for investors. There are also various Annuity Options Available.
If you wish to know further we recommend you to read our article on SBI Life Smart Annuity Plus: Good or Bad? A Comprehensive Analysis and Review
iii) SBI Life Smart Wealth Assure Plan VS SBI Life Smart Humsafar Plan
SBI Life Smart Humsafar Plan is a joint life insurance product that provides a saving option. It is specially designed for couples to help them meet their family goals.
To get a better understanding of the plan’s Features, Advantages, IRR Analysis, etc. You can refer to our blog post on: SBI Life Smart Humsafar Review – A Good or Bad Lifelong Companion
12.) Final Verdict on SBI Life Smart Wealth Assure
SBI Life Smart Wealth Assure is a hassle-free investment vehicle with only a lumpsum option available.
This type of lumpsum investment is always a preferable choice for those who have a hefty surplus. This plan provides you an opportunity to invest in the market as well.
While analyzing SBI Life Smart Wealth Assure, we couldn’t find any advantage to an investor in the long run. The various charges associated with the High Agent-Commission will pull down the overall returns. It neither offers adequate life cover.
This a Long-Term Investment Product, but the returns under this plan are a serious stumbling block to an investor.
Make sure that you have an adequate life cover for yourself. Then, you can build your investment portfolio either with your lumpsum surplus or monthly savings.
It is not advisable to solely become dependent on Social Media Platforms like Quora, Facebook, Twitter, etc. for making Investment Decisions.
Please Take the advice of a Finance Professional before investing your hard-earned money.
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