Children are the future of our country and every parent wishes to secure the future of their child. The Smart Scholar Plan from SBI Life is a specialised product designed to ensure that the financial future of your child is secured, regardless of what life might throw your way. Investing in this life insurance cum unit linked plan offers peace of mind and financial security, enabling your children to follow their dreams without worrying about monetary constraints.
Eligibility Criteria for SBI Life Smart Scholar
|Minimum entry age||Child – at birth Proposer (guardian/parent) – 18 years|
|Maximum entry age||Child – 17 years Proposer (guardian/parent) – 57 years|
|Maximum age at maturity||Child – 25 years Proposer - 65 years|
Key Features of SBI Life Smart Scholar
|Plan type||Non participating unit linked insurance scheme|
|Policy term||Minimum – 8 years Maximum – (25 years – entry age of child)|
|Premium payment term||
|Maturity benefit||Amount equivalent to fund value will be paid on maturity|
|Premium payment frequency||Single premium, annual, half-yearly, quarterly and monthly|
|Free look period||15 day free look period is offered for this policy|
|Revival/Renewal||Lapsed policies can be revived by paying a discontinuance fee within 30 days of receipt of notice indicating lapsed payments|
|Customisation||Option to choose between 9 funds|
|Sum assured||Varies according to premium opted for, ranging between 7 and 20 times the annual premium or 1.25 to 5 times the single premium|
|Policy coverage||Maturity benefit and death benefit|
Benefits of SBI Life Smart Scholar
Some of the key benefits of SBI Life Smart Scholar are highlighted below.
- Multiple fund options – Proposers can choose between 9 fund options, ensuring they find one which suits their requirements.
- Partial withdrawals – Partial withdrawals are permitted, ensuring that financial emergencies are taken care of.
- Maturity benefit – A maturity benefit will be paid when the policy term is completed.
- Death benefit – In the unfortunate event of demise of proposer, a death benefit will be paid to the nominee. In case of demise of child, the fund value will be paid. In case of demise of both child and proposer, a death benefit plus the fund value will be paid to the nominee.
- Tax benefits - One is entitled to tax benefits under Section 80C and 10(10) D of the Income Tax Act.
- Multiple settlement options – Individuals have an option to choose between different settlement options.
- Loyalty additions – The fund garners additional loyalty units after being in force for a particular period.
Working of SBI Life Smart Scholar
SBI Life Smart Scholar is a plan which is extremely simple to understand and implement, ensuring that everyone involved is aware of its working. Let us consider the example of Mr. Rao, the father of 1 year old Nisha. Mr. Rao opts for this plan to prepare a foundation for his daughter, ensuring that she has sufficient funds to pursue her dreams. He chooses to invest a sum of Rs 1 lakh every year for a period of 17 years (till his daughter attains the age of 18 years).
He also chooses a medium risk fund option, the Balanced Fund which invests in both equity and debt instruments. Let us consider the following scenarios.
Scenario 1: Both Mr. Rao and Nisha have an eventful time, with the policy maturing in 17 years. In this case Mr. Rao will receive an amount equivalent to the fund value.
Scenario 2: Mr. Rao falls ill and passes away 10 years after the plan was initiated. In this case a death benefit equivalent to the higher of the sum assured or 105% of premiums paid till demise will be paid to the nominee.
Scenario 3: In the unfortunate event of demise of Nisha, Mr. Rao can choose to terminate the policy, in which case he will receive the fund value at time of death.
Scenario 4: In the unfortunate case where both Mr. Rao and Nisha pass away, a nominee will receive the death benefit plus the fund value.
Premium Payment for SBI Life Smart Scholar
The table below highlights the different premium payment options available to participants.
|Type of plan chosen||Premium payment frequency||Minimum premium amount||Maximum premium amount|
|Single payment||Single||Rs 75,000||No upper limit|
|Plan with PPT between 5 and 7 years||Monthly Quarterly Half-yearly Annual||Rs 4,500 Rs 12,500 Rs 25,000 Rs 50,000||No upper limit|
|Plan with PPT greater than 7 years||Monthly Quarterly Half-yearly Annual||Rs 4,000 Rs 10,000 Rs 16,000 Rs 24,000||No upper limit|
Individuals can enhance the protection offered by this sbi ulip plan by opting for additional riders, with SBI Life offering two riders, the Premium Payor Waiver Benefit Rider and the Accident Benefit Rider. Under the Premium Payor Waiver Benefit rider, future premiums will be paid by SBI in case of demise of proposer/life assured. The Accident benefit rider provides an additional benefit in case of death by accident.
Note: Individuals who have opted for single premium policies cannot opt for these riders.
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GST of 18% is applicable on life insurance effective from the 1st of July, 2017