SBI Life Smart Scholar Plan

SBI Life Smart Scholar Plan is a unit linked insurance plan (ULIP) for the benefit of a child, where the parent is the Life Insured. This plan does not cover the life of a child but it is meant for the security of the child’s future even if anything happens to the parent. In this plan if the Life Insured, i.e. the parent dies within the policy tenure, the nominee, i.e. the child would receive the higher of Sum Assured or 105% of all premiums paid till date as Death Benefit to address the immediate needs of the family. The future premiums would also be paid by the company such that the Fund Value would also be paid out on maturity of the policy. Hence the Fund Value would be paid out in all circumstances.

• This plan is a Unit Linked Insurance Plan without Bonus
• Death Benefit is higher of Sum Assured or 105% of all premiums paid and future premiums are waived off to pay Maturity Benefit as well.
• Maturity Benefit is Fund Value which is payable when the Policy Term ends.
• Loyalty Additions is also provided in this policy according to the Policy Term.
• This policy has 2 inbuilt riders, namely Accidental Death and Disability Rider and Premium Payor Benefit rider.
• There are 9 funds for investment purpose 

Death Benefit – In case of death of the Life Insured, the Nominee would get the higher of the Sum Assured or 105% of all premiums paid till date. The future premiums would be waived off and be paid by the company to continue the plan till the end and the Fund Value would also be paid whenever due provided the child is alive.

If the child also dies within the policy tenure, all benefits would be paid and the policy would be terminated.

Maturity Benefit – On maturity, the Fund Value is paid to the policyholder.

Income Tax Benefit - Life Insurance premiums paid up to Rs. 1,00,000 are allowed as a deduction from the taxable income each year under section 80C

Premium = Rs. 50,000 and Rs 1,00,000

Sum Assured = Rs 5,00,000 and Rs 10,00,000 respectively

Age of Parent = 30 years

Age of Child = 1 year

Policy Term = 20 years

Premium Paying Term = 20 years

Total Investment = Rs 50,000 X 20 years = Rs 10,00,000

   Rs 1,00,000 X 20 years = Rs 20,00,000

Riders – There are 2 in-built riders available with this plan for Non-Single mode policies:

·         Accidental Death and Disability Benefit Rider

·         Premium Payor Benefit rider.

Investment Fund Options

There are 9 Investment Funds available

1.     Index fund

2.     Equity Fund

3.     Top 300 Fund

4.     Equity Optimiser Fund

5.     P/E Managed Fund

6.     Growth Fund

7.     Balanced Fund

8.     Bond fund

9.     Money market Fund

Switching - The minimum amount that you can switch is Rs 5,000. First 2 switches in a year are free of cost.

Partial Withdrawal - Partial withdrawals are allowed only after completion of 5 policy years. Upto 15% of Fund Value can be withdrawn each year, from 6th year onwards, subject to conditions. 1 free partial withdrawal is allowed in each policy year. Minimum Amount for Partial Withdrawal is Rs 5000.

You stop paying the premium before 5 years - If the policy holder stops paying the premium, the insurance cover will cease and the fund value net of any discontinuance charge will be transferred to the Discontinued Policy Fund. The Discontinued Policy Fund will be credited with a minimum interest rate of 3.5% p.a. and the proceeds from this will be payable after the fifth policy anniversary. In case of death of the Life Assured during this period, only the accumulated fund value will be payable to the nominee. It can also be revived. Before 5 years, the discontinuation charge is applicable.

You stop paying the premium after 5 years - If the policy holder stops paying the premium after 5 years, then the accumulated policy fund amount till the date of discontinuance shall be paid to the policy holder and the policy will terminate immediately.

You want to surrender the policy – If the policy holder wants to surrender the policy before completing 5 years, then the insurance cover will cease and the fund value net of any discontinuance charge will be transferred to the Discontinued Policy Fund. The Discontinued Policy Fund will be credited with a minimum interest rate of 3.5% p.a. and the proceeds from this will be payable after the fifth policy anniversary. In case of death of the Life Assured during this period, only the accumulated fund value will be payable to the nominee.

If the policyholder surrenders the policy after completion of 5 policy years, then the insurance cover will cease and your fund value shall be paid immediately and the policy would be terminated.

You want a loan against your policy - There is no loan available under this plan.

·         HDFC SL Youngstar Super Premium Plan

·         BSLI Classic Child Plan

·         ICICI Prudential Smart Kid

·         SBI Life Scholar II