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SBI Life Smart Humsafar Plan

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SBI Life Smart Humsafar Plan Review

The SBI Life Smart Humsafar Plan is a traditional Joint Life Plan which covers the husband and wife under a same policy. The plan is participating in nature and earns bonuses as and when declared by the insurance company.
 

Highlights of the SBI Life Smart Humsafar Plan

  • This is a traditional Joint Life Endowment Assurance Plan which is earns simple reversionary bonuses and covers a married couple.
  • Though bonus depends on the company performance, the plan promises a minimum bonus addition of 2.50% of the Sum Assured in the first 3 years of the plan.
  • Maturity benefit is paid when one or both the lives survive till maturity and death benefit is paid if any or both lives die during the plan term.
  • An inbuilt premium waiver rider which waives future premiums if any one of the couple dies during the plan term.
 

Working of the SBI Life Smart Humsafar Plan

  • Depending on the age, plan term and Sum Assured chosen, the premium is calculated which is payable for the entire chosen term. The premium would be determined based on an Equivalent Age of joint lives which would be the age of the younger life plus an age addition which depends on the age difference. The following table depicts the age addition based on the age difference:
Age addition Age difference Age addition Age difference Age addition Age difference
0 0 7 4 14 9
1 1 8 5 15 10
2 1 9 5 16 11
3 2 10 6 17 11
4 2 11 7 18 12
5 3 12 8 19 13
6 3 13 8 20 14
 
  • Bonus accrues every year till the end of the plan term if premiums are regularly paid. The rate of bonus declaration would depend on the profits earned in a year. However, a minimum of 2.50% of the Sum Assured is paid for the first 3 policy years.
  • If any one of the partners die, the Sum Assured on death is paid immediately. Future premiums are waived off and the plan continues till maturity when the Sum Assured and vested bonuses are paid again. If the second life also dies during the term, the Sum Assured on death and the accrued bonuses are again paid to the nominee.
  • If any one or both the partners survive till maturity, the Sum Assured and the vested bonuses would be paid.
 
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Benefits and Features of SBI Life Smart Humsafar Plan

  • Maturity Benefit - If any one or both the partners survive till maturity and the policy is in force, the following benefit would be paid – 
    Basic Sum Assured + Vested reversionary bonuses + Terminal Bonus (if any)
  • Death Benefit - If the policy is in force and the any one of the partners die, highest of the following would be paid to the surviving partner:
    • Sum Assured on Death, or
    • 105% of all premium paid till death
      Furthermore, the premiums payable would be waived and the policy would continue. If the surviving partner also dies during the term and the policy is in force, higher of the following would be paid:
    • Sum Assured on Death + vested simple reversionary bonuses + Terminal Bonus (if any)
    • 105% of the total premiums paid till the second death
      The Sum Assured on death for the above calculation would be higher of the:
    • Basic Sum Assured
    • Guaranteed Sum Assured at Maturity (which is the base Sum Assured)
    • 10 times the annual premium if age is less than 45 years or 7 times the annual premium if age is 45 years and abov 
  • Bonus - Simple reversionary bonuses are declared under the plan which depends on the performance of the company. In the first 3 years, a minimum of 2.5% of the Sum Assured is paid as assured bonus. Terminal Bonus may be paid on death, maturity or surrender.
  • Loan - Loan can be taken on the policy after the policy has acquired a Surrender Value. The maximum amount of loan available is 90% of the acquired Surrender Value
  • Tax Benefit -Premiums paid under the plan would be exempt from tax under Section 80C up to a limit of Rs.1.5 lakhs. The death benefit or the maturity benefit received would also be tax exempt under Section 10(10D) of the Income Tax Act. 


Eligibility Criteria of SBI Life Smart Humsafar Plan

The plan can be bought only by Resident Indians. The other eligibility criteria of the plan includes:
 
  Minimum Maximum
Entry age (Last Birthday) 18 years 46 years
Maturity Age (Last Birthday) NA 65 years
Maximum age difference between the partners 20 years
Plan tenure 10 years 30 years
Premium payable Monthly – Rs.500
Quarterly – Rs.1500
Half-yearly – Rs.3000
Annually – Rs.6000
Depends on the maximum Sum Assured
Premium Paying Term Equal to plan term
Sum Assured Rs.1 lakh Rs.5 crores
Premium Frequency Loading Half-yearly – 52% of annual premium
Quarterly – 26.50% of annual premium 
Monthly – 8.9% of annual premium
Premium payment mode Monthly, quarterly, half-yearly and annually


Additional Benefits of SBI Life Smart Humsafar Plan

  • Riders – SBI Life Accidental Death Benefit (ADB) Rider can be availed on one life or both the lives at very low premiums. The minimum available rider Sum Assured is Rs.25, 000 and the maximum is Rs.50 lakhs. If both partners have taken the rider, the rider benefit would be payable when both die simultaneously in an accident, die at different times due to the same accident or die at different times due to different accidents.
  • Premium Discounts – If a higher amount of Sum Assured is chosen, the company provides premium rebates. This rebate is allowed per thousand Sum Assured for Sum Assured levels above Rs.3 lakhs. For Sum Assured Rs.3 lakhs to Rs.5 lakhs, the applicable rebate is Rs.2 and for Sum Assured of Rs.5 lakhs and above, the rebate is Rs.3
  • Grace Period – A grace period of 30 days is allowed for payment of premium after the due date for annual, half-yearly or quarterly modes of premium payment. For monthly modes, the grace period allowed is 15 days. The life cover under the policy would continue during the grace period.
  • Free Look Period – A cooling off period or a free look period of 15 days is granted to the policyholder after the policy issuance to review the policy terms and conditions. If found unsatisfactory, the plan can be cancelled within this period and the premium paid would be refunded after deducting the relevant mortality charge, service tax, cess and stamp duty paid


Premium Illustration

The following chart shows the premium rates for different policy tenures and at different
ages for a Sum Assured of Rs.2 lakhs and 5 lakhs and no rider inclusion.


Here are the tabulated premium rates for a quick view:

Age Term - 15 years Term - 20 years Term - 25 years
SA - 2
lakhs
SA - 5
lakhs
SA - 2
lakhs
SA - 5
lakhs
SA - 2
lakhs
SA - 5
lakhs
30 years 15,026 36,065 11,336 26,840 9,320 21,800
40 years 16,456 39,640 13,132 31,330 11,434 27,085



Exclusions in SBI Life Smart Humsafar Plan

  • If the policyholder commits suicide within a year of policy issuance 80% of the premiums paid would be returned and no death benefit would be payable.
  • If suicide is committed within a year of policy revival, higher of 80% of the premiums paid till death or the Surrender Value acquired would be paid provided the policy is in force.


Non-Payment of premium in SBI Life Smart Humsafar Plan

Premiums have to be paid for at least 3 years after which the policyholder can surrender the policy or make it paid-up.

Making the policy Paid-up

If at least 3 full years’ premium has been paid, the policy would become a paid-up policy if future premiums are not paid. The Sum Assured would be reduced and would be called the Paid-up Sum Assured
Paid up Sum Assured= {Sum Assured * (number of Premiums Paid / total number of premiums payable)} + vested bonuses accumulated.
Future bonuses would not be declared under the policy and the following benefits would be paid as and when they occur:
  • Death Benefit – On either the first or the second death, the Paid-up Sum Assured would be paid
  • Maturity benefit – On maturity also the Paid-up Sum Assured would be paid


Surrendering the policy

Surrender is allowed only after 3 years when the policy acquires a Surrender Value. On surrendering the policy, higher of the Guaranteed Surrender Value (GSV) or the Special Surrender Value (SSV) would be paid.
      ⦁    GSV = Basic Premium paid excluding taxes * GSV Factor 
The GSV Factors
      ⦁    The SSV would be declared by the company based on its performance.

Revival 
Revival is allowed within 2 years from the date of the first unpaid premium. The policyholder would be required to pay the outstanding premium and any interest charged by the insurer to revive his policy.

 
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