SBI Life Insurance has announced 3 new insurance plans today. Let's discuss them. Starting with Smart Elite ULIP Plan.
SBI Life – Smart Elite is a Unit Linked Insurance plan. It gives you flexibility to pay premium(s) for limited term or single premium, with the freedom to stay invested and protected for long term.
• Maximum value addition through excellent allocation rates.
• Pay premiums only for a limited term of 5, 8 or 10 years or a Single Payment, as per your convenience and enjoy benefits throughout the chosen policy term.
• No Premium Allocation Charges from 6th policy year onwards, thereby enhancing your fund value.
• Two protection options available: Gold Option & Platinum Option
• Invest in wide range of funds and manage them as per your convenience.
• Life Insurance coverage with minimum Sum Assured of 10 or 7 times of your Annual Premium (AP), based on your age.
• Switch and redirection facility, to pilot your investments.
• Option to increase/decrease your Sum Assured from 6th policy year onwards.
• Accidental Death and Accidental Total and Permanent Disability (Accidental TPD) benefit automatically comes to you as an integral part of the plan!
• Attractive Tax benefits under the Income Tax Act, 1961, subject to conditions**.
- Partial Withdrawals are available from the 6 Policy Year onwards.
- One free Partial Withdrawal in a Policy Year is allowed. A charge of Rs. 100 per withdrawal in excess of free Partial Withdrawal will be charged. There is no carry forward of free unused Partial Withdrawal for future Policy Years.
- A maximum of 2 Partial Withdrawals can be made in one Policy Year and not more than 5 Partial Withdrawals are allowed in entire Policy Term in case of Policy Term 10 years or below and 10 Partial Withdrawals for Policy Term above 10 years.
- Minimum Partial Withdrawal amount allowed is Rs. 5,000 (in multiple of Rs. 1,000). Maximum Partial Withdrawal allowed is up to 15% of Fund Value as on withdrawal request date.
- Subsequent to a Partial Withdrawal at any time during the Policy Term, if the Fund Value is not sufficient to recover the charges, the policy will be terminated immediately and the Fund Value without deduction of any charges will be paid to the
- Policyholder . All rights and benefits under the policy will automatically cease.
Charges under the plan:
Premium Allocation Charge: This charge shall be deducted from Premiums at the time of receipt of such Premium.
The allocation to units is made after the deduction of the charge from the Premium received.
Policy Administration Charges:
A monthly policy administration charge of Rs. 60 per month for LPPT and Rs. 50 per month for Single Premium; shall be deducted by cancelling units at the prevailing unit price on the first business day of each Policy Month.
Fund Management Charges:
A certain fixed percentage of the relevant Fund before calculating the NAV on a daily basis will be charged as per the rates below:
These charges may be increased within the maximum limit allowed with notice to the Policyholder , subject to prior IRDA approval.
Comments from InvestmentKit.com : SBI Life always comes up with some special plans – different from other companies. This time it has introduced plans for HNI customers as the minimum annual premium in this plan is Rs.1,50,000. Even if someone wants SIP, the minimum monthly premium is Rs.12,500. Certainly, this premium is not in the pocket of middle class people.
From 6th year onwards, ONLY one partial withdrawn is allowed and that for a maximum of 15% of fund value as on that day. That limits the liquidity in this plan.
The total premium allocation charges are 15% in first 5 years – very high as compared to equity diversified mutual funds. The Fund management charges are less than mutual funds.
Overall, the plan does not come with some SPECIAL kind of attraction. But one can say the premium allocation charges are less than some of the other ULIP available in the market. One can go with this ULIP if the investment time horizon is more than 15 years.
One can get more if you invest the same amount in equity diversified mutual funds for the same tenure. Ofcoure, there will be no insurance there. For that, you can take some good term insurance plan.