SBI Life - Retire Smart Plan

Overview

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

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 -

  • Annuity plan from the policy proceeds

  • Single premium deferred pension product from policy proceeds

  • One third of proceeds commuted under an immediate annuity purchase

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 -

  1. is present throughout the policy term

  2. Two for an investment portfolio with variable risk and returns

  3. Applicable tax benefits can be availed as per Section 80CCC, 10(10A) and 10(10D) of the Income Tax Act

  4. 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 -

  1. 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

  2. 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

  3. 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

  4. 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 -

  1. Year 1 - 5.75% of premium

  2. Year 2 - 4.25% of premium

  3. Years 3-10 - 4.00% of premium

  4. Year 11 onwards - 2.50% of premium

Fund Management Charge

Charges based annually and charged daily can be outlined as follows -

  1. Equity Pension Fund II - 1.35% per annum

  2. Bond Pension Fund II - 1.00% per annum

  3. Money Market Pension Fund II - 0.25% per annum

  4. Discontinued Policy Pension Fund - 0.50% per annum

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.

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GST of 18% is applicable on life insurance effective from the 1st of July, 2017

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