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SBI Life Smart Scholar Plan

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SBI Life Smart Scholar Plan Review

The SBI Life Smart Scholar Plan is a Unit Linked Child Plan which is designed to provide for the child’s future even if the parent is not around. The plan provides insurance coverage and returns linked to the capital market so that a substantial corpus is accumulated for the child’s future.


Highlights of the SBI Life Smart Scholar Plan

This is a Unit Linked Plan which is available to individuals who have children aged 0-17 years
  • Premiums under the plan are payable for a limited tenure, regular tenure or in one lump-sum.
  • There are two inbuilt riders in the plan which are, Premium Payor Waiver benefit and Accident benefit.
  • Loyalty additions are added to the Fund Value in addition to the market-related growth.
  • The plan has an option of 7 funds for investments according to the policyholder’s risk appetite.


Working of the SBI Life Smart Scholar Plan

  • The policyholder decides on the premiums he wants to pay and the fund in which the premiums are to be invested.
  • There are 7 fund options to choose from which are:
    • Equity Fund
    • Top 300 Fund
    • Equity Optimiser Fund
    • Growth Fund
    • Balanced Fund
    • Bond Fund
    • Money market Fund
  • If the policyholder dies during the tenure of the plan the death benefit is paid. Future premiums are waived and are paid by the company and on maturity the Fund Value is again paid to the child.
  • If the plan attains maturity, the maturity benefit is paid.


COMPARE THIS PLAN WITH OTHER ULIP PLANS


Benefits and Features of the SBI Life Smart Scholar Plan

  • Maturity Benefit – On maturity, the Fund Value available on the maturity date would be paid to the beneficiary. The beneficiary, if wishes, can also avail the Fund Value in installments over a period of 5 years post the date of maturity under the Settlement Option. The beneficiary under the plan would be the policyholder, if he or she survives till maturity or the child if the insured dies during the plan tenure.
  • Death Benefit – In case of death of the insured parent due to any reasons except accident,  higher of the following would be payable:
    • Sum Assured 
    • 105% of the total premiums paid till death
      Due to the inbuilt Premium Payor waiver Benefit, future premiums would be waived off and the plan would continue for the remaining duration. The company would credit the premium into the Fund Value every year and on maturity, the available Fund Value would be paid.
      If the insured dies due to accident, in addition to the above benefits, an additional Accident Benefit Sum Assured would be paid under the inbuilt Accidental Benefit.
      If the child dies, nothing would be payable but the life insured can choose to terminate the plan upon which the Fund Value on the date of termination would be payable.
  • Bonus – Being a ULIP plan, bonus is not declared.
  • Loyalty Additions – The plan accumulates Loyalty Additions which are added to the Fund Value at specific intervals depending on the term of the plan. Loyalty Additions are added only in case of in-force policies. The value of the addition would be:
    1% * average Fund Value on the 1st day of the last 24 months
  • Loan –Loan is not available under the plan.
  • 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 Scholar Plan

The plan can be bought only by Resident Indians. The other eligibility criteria of the plan includes:
 
  Minimum Maximum
Entry age of the parent(Last Birthday) 18 years 57 years
Entry age of the child(Last Birthday) 0 years 17 years
Maturity Age of the parent (Last Birthday) NA 60 years
Maturity Age of the child (Last Birthday) 18 years 25 years
Plan tenure 8 years 25 years
Premium payable Single premium – Rs.75, 000
Limited Premium for 5 to 7 years:
Yearly – Rs.24,000
Half-yearly – Rs.16,000 
Quarterly – Rs.10,000
Monthly – Rs.4000
Limited Premium for 8 years and above:
Yearly – Rs.50,000
Half-yearly – Rs.25,000 
Quarterly – Rs.12,500
Monthly – Rs.4500
No limit
Premium Paying Term Single premium 
OR
5 years to 25 years
Sum Assured Limited Premium:
Age below 45 years:
Higher of 10*annual premium or 0.50*term*annual premium
Age above 45 years:
Higher of 7*annual premium or 0.25*term*annual premium
Single Premium:
1.25*Single Premium paid
Limited Premium:
20*annual premium
Single Premium:
Age below 45 years:
5*single premium paid
Age above 45 years:
1.25*Single Premium paid
Premium payment mode Monthly, quarterly, half-yearly, yearly or Single Premium


Applicable charges in SBI Life Smart Scholar Plan

Being a ULIP plan, there are certain charges applicable. The charges include the following:
  • Premium Allocation Charge – This charge is deducted on receipt of each premium before the premium is credited into the fund. The charges is:
Policy year Limited Premium Single Premium
1 6.00% 3.00%
2 4.50% NA
3 4.50% NA
4 4.00% NA
5 4.00% NA
6 1.00% NA
7 1.00% NA
8 1.00% NA
10 1.00% NA
11 onwards Nil NA
 
  • Policy Administration Charge – A monthly charge of Rs.50 is deducted from the fund value at the start of each month.
  • Fund Management Charge – These charges depend on the type of fund selected and are charged on a daily basis. The applicable charges are:
Fund Type Charge
Equity Fund 1.35% per annum
Top 300 Fund 1.35% per annum
Equity Optimiser Fund 1.35% per annum
Growth Fund 1.35% per annum
Balanced Fund 1.25% per annum
Bond Fund 1.00% per annum
Money Market Fund 0.25% per annum
Discontinuance Policy Fund 0.50% per annum
 
  • Discontinuance Charge – Applicable for policies in which premiums are discontinued. The charges are:
 
Year of Discontinuance Annual Premiums up to Rs.25,000 Annual Premiums above Rs.25,000
1 Lower of 20% of annual premium or Fund Value up to a maximum of Rs.3000 Lower of 6% of annual premium or Fund Value up to a maximum of Rs.6000
2 Lower of 15% of annual premium or Fund Value up to a maximum of Rs.2000 Lower of 4% of annual premium or Fund Value up to a maximum of Rs.5000
3 Lower of 10% of annual premium or Fund Value up to a maximum of Rs.1500 Lower of 3% of annual premium or Fund Value up to a maximum of Rs.4000
4 Lower of 5% of annual premium or Fund Value up to a maximum of Rs.1000 Lower of 2% of annual premium or Fund Value up to a maximum of Rs.2000
5 year onwards Nil Nil

For Single Premium Plans
 
Year of Discontinuance Single Premiums up to Rs.25,000 Single Premiums above Rs.25,000
1 Lower of 2% of annual premium or Fund Value up to a maximum of Rs.3000 Lower of 1% of annual premium or Fund Value up to a maximum of Rs.6000
2 Lower of 1.5% of annual premium or Fund Value up to a maximum of Rs.2000 Lower of 0.50% of annual premium or Fund Value up to a maximum of Rs.5000
3 Lower of 1% of annual premium or Fund Value up to a maximum of Rs.1500 Lower of 0.25% of annual premium or Fund Value up to a maximum of Rs.4000
4 Lower of 0.5% of annual premium or Fund Value up to a maximum of Rs.1000 Lower of 0.10% of annual premium or Fund Value up to a maximum of Rs.2000
5 year onwards Nil Nil
 
  • Mortality charge – This charge is deducted on the first day of each month based on the Sum at Risk and the policyholder’s age.
  • Premium Payor Benefit charges – These charges are applicable only in Limited Premium plans and are deducted monthly on the first day of every month.
  • Accident Benefit Charges – Only Limited Premium plans attract this charge. The charge is deducted monthly on the first working day and is equivalent to:
    Charges = Accident Sum Assured* (0.50/2).
  • Miscellaneous Charges – For any duplicate or additional copy of the Fund Statement is requested by the policyholder, a charge of Rs.100 per statement would be applicable.
  • Medical expenses on revival – On reviving the policy if any medical expenses are incurred, the cost of such expenses would be deducted from the Fund Value up to a maximum of Rs.3000


Additional Benefits of SBI Life Smart Scholar Plan

  • Riders – Two in-built riders come with the plan. In the Accident Benefit rider, the Accident Sum Assured is paid on accidental death or Total Permanent Disability which is equal to the base Sum Assured subject to a maximum of Rs.50 lakhs. The Premium Payor Benefit rider waives the future premiums if the insured dies which are then paid by the company.
  • Partial Withdrawals – Partial withdrawals are allowed in the plan after a completion of 5 policy years. One withdrawal in a year is free after which a charge of Rs.100 per withdrawal would be applicable. The minimum amount of partial withdrawal is Rs.5000 and thereafter in multiples of Rs.1000 to a maximum of 15% of the Fund Value. 
  • Switching – This facility enables the policyholder to change between funds whenever desired. Two free switches are free every policy year after which a charge of Rs.100 per switch would be levied. The minimum amount of switching should be Rs.5000.
  • Premium Redirection – This facility enables the policyholder to redirect subsequent premiums to another chosen fund from the second policy year. One redirection is free per policy year exceeding which Rs.100 per redirection would be levied.
  • Grace Period – A grace period of 30 days is allowed for annual, half-yearly and quarterly payment of premium and 15 days for monthly mode of premium payment.
  • 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


Exclusions in SBI Life Smart Scholar Plan

  • If the policyholder commits suicide anytime during the plan tenure, the available Fund Value would be paid to the nominee.
  • In case of Accident Benefit, the accident should not be due to alcohol and drug abuse, war and civil commotion, radiation, infection, self-inflicted injury, criminal acts, aviation or hazardous sports and hobbies.


Non-Payment of premium in SBI Life Smart Scholar Plan

If the premiums are not paid within the Grace Period, the policy would lapse. The lapsed policy can be revived, surrendered or made paid-up as per the policyholder’s choice.

Making the policy Paid-up

The policy can be converted into a paid-up policy only if 5 full years’ premiums have been paid. After conversion, the policy would acquire a paid-up value which would be:
Paid –up Value = Sum Assured * (number of Premiums Paid / total number of premiums payable)
A paid-up policy would attract mortality charges, charges for the inbuilt riders, Fund management Charges and Policy Administration charges.


Surrendering the policy

  • Within the first 5 policy years
The policy has a 5 year lock-in period. If premiums are discontinued within the first 5 years, the funds in the Fund Value would be transferred to the Discontinuance Policy Fund after deducting the Discontinuation charges. This fund would earn a minimum interest of 4% per annum. The money would remain in the Discontinuance Policy Fund till the completion of 5 years and the Fund Management charges would be deducted as and when applicable. If the policyholder dies during this period, the Fund Value as on the date of death would be paid. Otherwise, after the completion of the lock-in period of 5 years, the available Fund Value would be paid.
 
  • After 5 years
If the plan is surrendered any time after the completion of 5 years, the available Fund Value would be paid without deduction of any charges.

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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