SBI Life: Retire Smart Insurance Policy Review

By | December 29, 2016

SBI Life Retire Smart is basically a unit linked non-participating pension policy which provides the life insurance coverage as well as the alternatives to invest in diverse funds with the numerous risks return situations. This policy is a Non-Traditional Pension Plan with no Bonus facility but it guarantees 101% of all premiums compensated on vesting therefore protecting your funds from market instability. With the life cover offered by the policy, various finance options under this plan can gradually add to the growth of investment. This policy comes with regular as well as limited premium imbursement options and is intended for persons who desire to build a quantity by investing their savings in a plan that gives a mix a variety of funds.

SBI Life Insurance Company Information

  • Main features of SBI Life Retire Smart Plan:

Main features of SBI Life Retire Smart Plan are as following:

  • Main features of SBI Life Retire Smart Plan:

Main features of SBI Life Retire Smart Plan are as following:

  • This is a Unit-linked non-participating pension policy.
  • SBI Life Retire Smart Plan is an individual policy.
  • The Guaranteed Additions as well as Terminal Additions raise the Fund Value to offer maximum returns.
  • The policy Tenure is of 10 years and 15 – 30 years.
  • Policy Validity will be for the selected policy term in case all premiums have been compensated.
  • A smallest amount of 105% of all premiums compensated is guaranteed on earlier demise.
  • The Basic Sum Assured is totally depends on the premium allocated.
  • The premiums can be compensated frequently or for a limited tenure as per correctness.
  • The free look period is of 30 days in case of online buying otherwise it is of 15 days.
  • This policy also allows the insured person to delay the Vesting Age if age is lesser than 55 years.
  • Grace Period and Notice Period: 30 days for yearly payment form, post which inside the next 15 days, SBI Life will send a notice for reviving the plan. Moreover, 30 days from the date of receiving of notice is the notice time.
  • It has 3 settlement options:
  1. Single premium delayed pension product from plan proceeds.
  2. Annuity policy from the plan proceeds.
  3. 1/3rd of the proceeds which is commuted under an instant annuity buy.
  • Under the SBI Life Retire Smart plan, the premiums compensated would be switched mechanically within diverse funds as per the years left to the maturity of the policy.
  • If the plan is not surrendered, then it can be revived within the 2 years from the date of last not paid premium.
  • Charges:
  • Premium Allocation Charge: This charge is subtracted from the Premium Paid by policyholder.
Policy Year Premium Allocation Charge
·         1 ·         5.75%
·         2 ·         4.25%
·         3-10 ·         4.00%
·         11 & above ·         2.50%

 

  • Policy Administration Charge: This is the charge for the administrative functioning of the plan and is subtracted by the cancellation of units on a monthly basis.
Policy Year Policy Administration Charge
·         1-5 ·         Rs. 45
·         6 & above ·         Rs. 70

 

  • Fund Management Charge: This charge is subtracted by adjusting the NAV of the units on every day basis.
Type Charge
·         Equity Pension Fund II –         1.35%
·         Bond Pension Fund II –         1.00%
·         Money Market Pension Fund II –         0.25%

 

  • Discontinuation Charge: This charge is for stopping the policy before the finishing of the Policy Tenure.
Year of Discontinuation Annual Premium < Rs. 25,000 Annual Premium >Rs. 25,000
Ø  Ist ·         Lesser of 20% (Annual Premium or Fund Value) to a maximum of Rs. 3,000 ·         Lesser of 6% (Annual Premium or Fund Value) to a maximum of Rs. 6,000
Ø  2nd ·         Lesser of 15% (Annual Premium or Fund Value) to a maximum of Rs. 2,000 ·         Lesser of 4% (Annual Premium or Fund Value) to a maximum of Rs. 5,000
Ø  3rd ·         Lesser of 10% (Annual Premium or Fund Value) to a maximum of Rs. 1,500 ·         Lesser of 3% (Annual Premium or Fund Value) to a maximum of Rs. 4,000
Ø  4th ·         Lesser of 5% (Annual Premium or Fund Value) to a maximum of Rs. 1,000 ·         Lesser of 2% (Annual Premium or Fund Value) to a maximum of Rs. 2,000
Ø  5th onwards ·         Nil

 

  • Benefits of SBI Life Retire Smart Plan:

The benefits of SBI Life Retire Smart Plan are as following:

  • Death Benefit:

If the policyholder dies within the tenure of the policy then the nominee will get the higher of:

  • 105% of total premiums compensated till loss.
  • Fund Value including the Terminal Additions.

The recipient can use the benefit received in the following ways:

  • Get the complete benefit in lump sum.
  • Buy an instant Annuity Plan from the corporation with the benefit amount.
  • Maturity Benefit:

On survival till the finishing of the plan tenure, the insured person gets higher of:

  • 101% of all premiums compensated.
  • Fund Value including the Terminal Addition.

The policyholder can use the proceeds to:

  • Buy a Single Premium delayed Annuity Plan from the corporation.
  • Buy an instant Annuity Plan from the corporation.
  • Buy an instant Annuity plan and convert 1/3rd of the quantity. By commuting, the insured person can withdraw the 1/3rd of the corpus in cash which would be tax-free.
  • The insured person might also select to delay the Vesting Age if he is less than the 55 years of age up to the age 80 years.
  • Income Tax Benefit:

The premiums of life insurance which are compensated up to the Rs. 1,00,000 allowed as an assumption from the chargeable income every year under section 80C. The death benefit is tax free under section 10(10)D which subject to fulfillment of terms and conditions. Moreover, the commuted part of the Maturity Benefit which is one third of the corpus is free from tax under the Section 10 (10)D but the rest is chargeable or taxable.

  • Investment Fund Options:

In this policy, there are three fund options. These are as following:

  1. Bond Pension Fund II
  2. Equity Pension Fund II
  3. Money Market Pension Fund II
  • Guaranteed Additions:

Guaranteed Additions of 1 percent of yearly premium is accredited to the Fund Value each year from the ending of the 15th policy anniversary till the date of vesting.

Apart from this, the snapshot of SBI Life Retire Smart plan is given below:

Ø  Age at Entry ·         Minimum: 30 years ·         Maximum: 70 years
Ø  Age at Maturity / Vesting ·         Minimum: 40 years ·         Maximum: 80 years
Ø  Policy Term ·         10, 15 to 35 years (both inclusive)
Ø  Premium Paying Term ·         Regular Premium : Same as policy term
Limited Premium·         5/8 years : Policy Term of 10 years·         5/8/10/15 years : Policy Term of 15 – 35 years (both inclusive)
Ø  Premium Frequency ·         Yearly / Half-yearly / Quarterly / Monthly
Ø  Minimum Premium Amounts (x 100)
v  Premium Frequency v  Regular premium v  Limited Premium
·         Yearly ·         Rs. 24,000 ·         Rs. 40,000
·         Half yearly ·         Rs. 15,000 ·         Rs. 20,000
·         Quarterly ·         Rs. 7,500 ·         Rs. 10,000
·         Monthly ·         Rs. 2,500 ·         Rs. 5,000
Ø  Maximum Premium Amount (X 100) ·         No limit

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