SBI Life - Retire Smart Plan
A unit linked non-participating pension plan offering life insurance coverage and options to invest in different funds with various risk-return scenarios. Along with the life cover provided by the plan, multiple fund options under this policy can steadily add to the growth of investment.
This plan comes with regular and limited premium payment options and is meant for people who wish to build a corpus through investing their savings in a policy that offers a mix of various funds.
Eligibility Conditions for SBI Life Retire Smart Plan
The eligibility conditions for availing this policy can be depicted in the table mentioned below -
Parameter | Minimum | Maximum |
Entry Age | 30 years | 70 years |
Maturity Age Life Option | 40 years | 80 years |
Key Features of SBI Life Retire Smart Plan
This plan is meant for securing a post retirement corpus and has the following salient features -
Parameters | Details |
Plan Type | Unit Linked Non-Participating Pension Plan |
Basis | Individual policy |
Policy Term | 10 years and 15 to 30 years |
Policy Validity | Will be for the chosen policy term in case all premiums have been paid |
Basic Sum Assured | Depends on the premium payable |
Coverage | Maturity/Vesting Benefit = Greater of Fund Value plus Terminal Addition or 101% of all premiums paid |
Death Benefit = Greater of Fund Value plus Terminal Addition or 105% of the premiums paid till the date of death | |
Surrender Benefit = Fund value | |
Deferred Vesting Benefit = Greater of Fund Value plus Terminal Addition or 101% of all premiums paid | |
Free look Period | 30 days in case of online purchase. 15 days otherwise |
Grace Period and Notice Period | 30 days for annual payment mode, post which within the next 15 days, SBI Life will send a notice to revive the policy. 30 days from date of receipt of notice is the notice period. |
Fund Choice Selection | Under the plan, premiums paid would be switched automatically within different funds as per the years left to the maturity of the plan |
Settlement Option | Allows the Maturity Benefit to be availed in one of three available options -
|
Nomination and Assignment | Nomination facility available |
Reinstatement or revival | Policy, if not surrendered, can be revived within two years from the date of last unpaid premium |
Benefits and Advantages of Retire Smart Plan
This plan from SBI Life utilizes different investment funds to aid in the growth of wealth and can be opted for by anyone aiming to achieve greater returns on long term savings. Life insurance provided by this policy throughout the policy term is an added benefit. The key advantages in opting for this plan can be mentioned in the following points -
- is present throughout the policy term
- Two for an investment portfolio with variable risk and returns
- Applicable tax benefits can be availed as per Section 80CCC, 10(10A) and 10(10D) of the Income Tax Act
- Multiple fund options under a single plan and automatic switching reduces hassles of fund management
The key benefits under this policy can be explained as below -
- Maturity Benefit - Paid once the policy reaches the maturity age, after the completion of the policy term, this amount can be paid to the policyholder or nominee. This amount includes a sum that is greater of fund value plus terminal addition or 101% of the premiums paid
- Death Benefit - In case of the death of the insured life, Death Benefit will be payable to the nominee. This sum includes the greater of fund value plus terminal addition or 105% of all premiums paid till the date of demise of the life insured
- Surrender Benefit - Policy has a lock-in period of 5 years. If surrendered within the lock-in period, funds move to Discontinuance Policy Fund and get paid after 5 years are complete. In case surrender is done after 5 years, fund value is paid out immediately
- Tax Benefit - The contributions made towards the premiums of this policy can be tax deductible as per Section 80CCC and the received benefits can fall under Section 10(10A) and 10(10D). Though these benefits are dependent on the prevailing tax laws
Investment of Funds under SBI Life Retire Smart Policy
This unit-linked plan from SBI Life comes with three active funds that offer a variable mix of risk and return and one discontinued policy fund. The premiums paid are used over all of the fund options and switched as per the years remaining to the maturity/vesting of the policy.
Fund allocation details throughout the policy term can be mentioned as follows -
Years to Maturity | Fund Allocation (in percentages) | ||
Equity Pension Fund II | Bond Pension Fund II | Money Market Pension Fund II | |
0-5 years | 0-30 | 40-100 | 0-60 |
6-10 years | 10-40 | 35-90 | 0-55 |
11-15 years | 30-50 | 30-70 | 0-40 |
16 years and above | 40-75 | 10-60 | 0-35 |
The details about the available funds have been mentioned in the table below -
Fund Name | Asset Categories | Risk and Return Rating | |||
Equity | Debt | Money Market | Govt. Securities | ||
Fund Ratios | |||||
Equity Pension Fund II | 80-100% | N/A | N/A | N/A | High |
Bond Pension Fund II | N/A | 60-100% | 0-40% | N/A | Low to Moderate |
Money Market Pension Fund II | N/A | 0-20% | 80-100% | N/A | Low |
Discontinued Policy Pension Fund | N/A | N/A | 0-40% | 60-100% | Low |
Charges in SBI Retire Smart Policy
Being an insurance plan that relies on various funds to generate wealth on the investment made, the policy entails charges on quite a few aspects of itself. The applicable charges on this policy are as follows -
Charge | Particulars | ||
Premium Allocation Charge | Charges are as follows -
| ||
Fund Management Charge | Charges based annually and charged daily can be outlined as follows -
| ||
Policy Administration Charge | INR 45 per month for Years 1-5, INR 70 per month for Year 6 onwards | ||
Guarantee Charge | 0.25% per annum charged daily on the fund value | ||
Miscellaneous Charges | Rs. 100 for policy alteration | ||
Policy Discontinuance Charge (calculated on Annualised Premium (AP) or Fund Value (FV) and for the first four years only, zero from fifth year onwards) | Year of Policy | Premium <= INR 25000 | Premium > INR 25000 |
Year 1 | Lower of 20% of AP or FV <= Rs. 3000 | Lower of 6% of AP or FV <= Rs. 6000 | |
Year 2 | Lower of 15% of AP or FV <= Rs. 2000 | Lower of 4% of AP or FV <= Rs. 5000 | |
Year 3 | Lower of 10% of AP or FV <= Rs. 1500 | Lower of 3% of AP or FV <= Rs. 4000 | |
Year 4 | Lower of 5% of AP or FV <= Rs. 1000 | Lower of 2% of AP or FV <= Rs. 2000 |
Premium Payment for SBI Life Retire Smart Policy
The details of premium payment for this plan can be summarised in the table below -
Premium Parameter | Details |
Premiums | Regular Pay - INR 24,000 annually, INR 15,000, half yearly, INR 7500 quarterly and INR 2500 monthly is the minimum amount Limited Pay - INR 40,000 annually, INR 20,000 half-yearly, INR 10,000 quarterly and INR 5000 monthly is the minimum amount |
Premium Paying Term (PPT) | Regular Pay - Equal to the Policy Term Limited Pay - 5 or 8 years for a policy term of 10 years and 5, 8, 10 or 15 years for a policy term of 15 to 35 years |
Premium Paying Frequency | Premiums can be paid in annual frequencies |
Premium Paying Modes | ECS, debit cards, credit cards, cheques and other acceptable modes |
Premium Discontinuation Scenario for Retire Smart
Post the mentioned grace period, if in case premiums for the policy are not paid and the policy lapses, the risk cover will cease to exist after the policy discontinuation and the fund value (as on the date of policy discontinuance) minus the discontinuance charge will be shifted into a Discontinued Policy Pension Fund. This fund shall attract an FMC of 0.50% per annum. If this scenario happens within the first five policy years, the funds shall be paid out at the end of the lock-in period of five years. If the discontinuance happens after 5 policy years, one can convert the policy into a paid-up policy or ask for a time extension of up to 2 years to revive the policy, else one can withdraw from the policy without any risk cover and the fund value will be paid out immediately.
GST of 18% is applicable on life insurance effective from the 1st of July, 2017
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