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SBI Life Smart Swadhan Plus Plan

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SBI Life Smart Swadhan Plus Plan Review

The SBI Life Smart Swadhan Plus Plan is a traditional, non-participating Term Assurance plan which promises the return of premiums paid if the plan matures.
 

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Highlights of the SBI Life Smart Swadhan Plus Plan

This is a traditional Term Assurance plan with return of premium option in which bonuses are not declared.
  • Premiums can be paid at once (Single Premium), for a limited period (Limited Premium) or for the entire policy duration (regular Premium).
  • Sum Assured is paid on death during the plan tenure.
  • The premiums paid are returned on surviving till maturity.


Working of the SBI Life Smart Swadhan Plus Plan

  • Premiums are to be paid as per the chosen frequency, i.e. single, limited or regular.
  • If the insured dies when the plan is in continuation, the Sum Assured on death is paid.
  • If the policyholder survives till maturity, the premiums paid are returned.

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Benefits and Features of SBI Life Smart Swadhan Plus Plan

  • Maturity Benefit – When the plan matures, 100% of the premiums paid during the plan term would be returned.
  • Death Benefit – If the insured dies during the plan tenure, the Sum Assured on death is paid. Sum Assured on death depends on the frequency of premium payment.
          For Single Premium Plans Sum Assured on death would be higher of:
    • Basic Sum Assured
    • 1.25 times the Single Premium
    • Maturity Benefit
      For limited and regular premium plans the Sum Assured on death would be higher of:
    • Basic Sum Assured
    • 10 times the annual premium paid
    • Maturity benefit
    • 105% of all premiums paid till death
  • Loan –Loans are not allowed under the plan 
  • Bonus – Bonuses are not declared under the plan since it is a non-participating 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.

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Eligibility Criteria of SBI Life Smart Swadhan Plus 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 65 years
Maturity Age (Last Birthday) NA 75 years
Plan tenure 10 years 30 years
Premium payable Single premium – Rs.21, 000
Yearly – Rs.2300
Half-yearly – Rs.1200
Quarterly – Rs.650
Monthly – Rs.250
No Limit
Premium Paying Term Single Premium
Limited Premium for 5, 10 or 15 years
Regular Premium
Sum Assured Rs.5 lakhs No limit
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 or Single Premium
 

Additional Benefits of SBI Life Smart Swadhan Plus Plan

  • Riders – No additional riders are available with the plan 
  • 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.7.5 lakhs. 
  • 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 various combinations of tenure, age and Sum Assured (SA).



The tabulated rates are:
 
Age Term – 10 years Term – 20 years Term – 30 years
SA – 10
lakhs
SA – 25
lakhs
SA – 10
lakhs
SA – 25
lakhs
SA – 10
lakhs
SA – 25
lakhs
30 years 12,520 29,800 6,980 15,950 6,480 14,700
35 years 14,870 35,675 9,200 31,500 8,610 20,025
40 years 19,560 47,400 12,620 30,050 11,660 27,650


Exclusions in SBI Life Smart Swadhan Plus 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 Swadhan Plus Plan

Premiums have to be paid for at least 2 years or 3 years depending on the premium paying tenure chosen after which the policyholder can surrender the policy or make it paid-up.

Making the policy Paid-up

If at least 2 or 3 full years’ premium has been paid depending on the premium paying term, the policy would become a paid-up policy if future premiums are not paid. Paid-up is available only in limited premium plans. The Sum Assured would be reduced and would be called the Paid-up Sum Assured
  • Death Benefit – On death, the Paid-up Sum Assured on death would be paid which can be calculated as:
              Sum Assured on death* (number of Premiums Paid / total number of premiums payable)
 
  • Maturity benefit – On maturity the Paid-up Sum Assured on maturity would be paid which can be calculated as:
              Maturity benefit* (number of Premiums Paid / total number of premiums payable)
 

Surrendering the policy

  • For limited premium plans
    Surrender is allowed only after the policy becomes paid-up. 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 SSV would be declared by the company based on its performance and would be calculated as:
      Basic premiums paid * SSV factors
  • For Single Premium Plans
    Single premium plans can be surrendered anytime during the plan tenure. On surrender higher of the GSV or the SSV would be payable.
    • GSV if plan is surrendered within first 3 years – 70% of the Single premium
    • GSV if plan is surrendered after 3 years - 90% of the Single premium
    • SSV is declared based on the performance of the company and would be SSV factor* Single premium
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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