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Investment Plans 2396 views September 23, 2020
SBI Life Insurance Company Limited offers a Non-linked, Non-participating, Life Endowment Assurance Savings plan using which you can get an assured return on your policy premium payment along with a life insurance cover. This is a unique policy introduced by SBI Life that benefits the user with a life insurance plan and a good investment for future financial risks. Check out this page and know what are the advantages of this plan and what it covers and what are the exclusions?
Table of Contents
If you are going to buy this policy, you should know what it offers to you, and to make it easier, we have pointed out some of its key benefits. Look at the pointers below.
The Annualized Premium is a premium payable once a year, excluding the applicable taxes underwriting some extra premiums and loadings for modal premiums, if there are many. Your total premiums paid implies that a total of all premiums are received by the company excluding any extra premium and applicable taxes.
For all the employees, retired employees, VRS holders, minor children, and spouses of employees of SBI Life Insurance Co. Ltd., State Bank, Associated Banks, RRBs sponsored by the State Bank of India subsidiaries of State Bank group, the insurer will provide an additional benefit of 25% (6 years) or 30% (7 years) annualized premium on maturity or death.
In case the insured dies in suicide within 12 months from the date of policy commencement, the nominee or beneficiary will get only 80% of the total paid premium amount, as the policy is in force. From the date of policy revival, the nominee or beneficiary will be entitled to an amount, which is above 80% of the total paid premiums till the date of death of the policyholder or the Surrender Value will be available to them on the date of death if the policy is in force.
Under this policy, you get a reduced paid-up value if you have paid your policy premium for the two full years.
The death benefit for a Reduced Paid-Policy would be Paid-up Sum Assured + the accrued Guaranteed Additions. It is calculated using the below formula:-
At the maturity of your Reduced Paid-up Policy, the company will pay a Sum Assured + the accrued Guaranteed Additions which are calculated by the below formula.
Let’s check out the example below and find how the policy will accrue guaranteed additions at the end of each policy year in a Reduced Paid-Up Value policy.
Suppose the annualized premium slab is < INR 1,00,000, so as per the calculations, the rate of guaranteed additions would be 4.00% per annum. Whereas if the annualized premium slab is >= INR 1,00,000, the rate of guaranteed additions on the policy will be 4.50% per annum.
The Guaranteed Addition amount is calculated as per the below formula:-
Reduced paid-up policy = Proportionate rate of guaranteed addition X cumulative paid premiums paid except the taxes, underwriting the extra premiums and loading for the modal premium plan.
Example: Ramesh is a 40-year old person, who has an annualized premium of INR 1,00,000 p.a. For 7years in SBI Life – Smart Platina Assure plan. Mr. Ramesh Basic Sum Assured is INR 8,40,000 and he has paid the first two year’s premium in full. But Mr. Ramesh doesn’t pay any further premium after that because of which the policy now becomes paid-up after the grace period.
So, as per the policy rules, the guaranteed additions for the policy payment term 1 and 2 years would be INR 5,500 and INR 11,000 respectively. The reduced guaranteed additions for the 3rd year would be INR 9,000.
Note:- If the policy is not subsequently revived, the Reduced paid-up value will be payable on maturity or death. So, you may terminate the Reduced paid-up policy before the maturity period by surrendering it as per the terms and conditions of the policy.
Before you go any further in the policy application process, you should check the below-mentioned pointers.
Entry Age: To buy this policy, your age should come within the range of 18-50 years. Because if you are below or above the said age criteria, your proposal will be rejected by the insurer.
Maturity Age: At maturity, the age of the insured shouldn’t exceed 65 years, otherwise, the policy will be terminated automatically.
Policy Term: You can invest in the SBI Life – Smart Platina Assure plan for 12 and 15 years, whichever is suitable for you.
Premium Payment Term (PPT): The premium payment term for this policy may vary based on your policy term. Check out the table below to know how.
|Term||Premium Payment Years|
|12 years||6 years|
|15 years||7 years|
Policy Premium Frequency: The monthly premium for monthly mode as a percentage of annualized premium is 8.50% of the annualized premium.
Annualized Premium (în multiples of INR 1,000): The minimum amount is INR 50,000 and the maximum amount has no limits (subject to the board approving underwriting the policy condition).
Basic Sum Assured (BSA): For this policy, the minimum amount of INR 3,00,000 is the basic sum assured, whereas the maximum amount has no limits (subject to the board approving the underwriting policy condition)
Formula:- BSA= Maturity factor PPT X Annualized Premium
Where, the maturity factor is based on the entry age of the insured and Premium Payment Term as given in the table shown below.
|Entry age (In Years)||Premium Payment Term (PPT)|
|18-40||105% for 6 years
120% for 7 years
|41-50||100% for 6 years
110% for 7 years
If there is an emergency wherein you may require instant funds, the insurer will allow you to borrow a loan against this policy. Yes, the company will offer you a loan facility that is made available only if the policy has acquired a surrender value. And the policy loan amount will be limited to a maximum of 80% of the surrender value. The surrender value of the policy and interest rate will be updated by the company from time to time. Currently, it is based on the nominal interest rate per annum, which is 150 basis points > 10-year benchmark government security. The 10-year benchmark government security rate as on 1st April 2020 is 6.14, so the loan interest applicable to this SBI Life Smart Platina Assure plan is 7.75% per annum. The interest rate is rounded up to the nearest multiple of 25 basis points and the interest amount up to INR 1. The No in-force policy will be closed in case the outstanding loan amount exceeds the policy’s surrender value.
SBI Life Insurance will give you an option to review the policy terms and conditions within 15 days of its receipt (for policies sourced through any channel mode other than Distance Marketing and electronic policies) and 30 days (for electronic policies and policy source through Distance Marketing). In case the insured isn’t agreed to the policy under any terms and conditions, he/she has an option to return the policy along with a letter stating the reason for policy cancellation under this free look period. Premiums that are paid by the insured will be refunded after deducting the stamp duty and cost of medical expenses (for pre-health check-up). Also, the proportionate risk premium for the free look period will be deducted from the period of cover.
The SBI Life Smart Platina Assure plan offers you Guaranteed Additions based on your premium payment. Your return rate will be calculated based on your annualized premium. Check out the slabs below to know the return rate you will get.
|Annualized Premium Amount (in INR)||Guaranteed Additions (per annum)|
Understand it better with this example: Mrs. Arora is 35 years old and has an annualized premium of INR 1,00,000 p.a.for which she has made a Premium Payment of 7 years of a 15-year policy term. Her Basic Sum Assured amount is around INR 8,40,000. So, she paid INR 1,00,000 per annum, resulting in a total premium outgo of INR 7,00,000 over 7 years. So, Mrs. Arora SBI Life Smart Platina Assure will be something like this.
|Basic Sum Assured||INR 8,40,000|
|Guaranteed Additions||INR 4,62,000|
|Maturity Benefit (Basic Sum Assured +Guaranteed Additions)||INR 13,02,000|
The company will offer you a 30-day grace period from the date of premium payment for yearly premiums and 15 days of grace period for monthly premiums. The policy will remain in force during the grace period and it will lapse if no premium is paid at the end of the grace period.
Note:- The policyholder can choose the annualized premium amount excluding the applicable taxes, underwriting any extra premiums and loadings for modal premiums if they want to. The above illustration is an example of a life insurance policy according to which all due premiums are paid until maturity. The benefits of the policy might vary depending on the insured’s age and annualized premium. In case Mrs. Arora dies in an unfortunate event, the nominee will get INR 10,00,000 + Accrued Guaranteed Additions if there is a death benefit.
The policy acquires a Surrender Value if you pay the premium for just 2 years. You can terminate the policy during the policy term by surrendering the policy for a surrender value. On policy surrender, the insurer will pay the higher of the Non-Guaranteed Special Surrender Value (SSV) or Guaranteed Surrender Value (GSV).
GSV Factors for Various Policy Duration
Paid premiums are shown in percentages in the table above.
|Policy Year||Policy Term (12 years)||Policy Term (15 years)|
SSV = SSV factors and SSV factors = Paid-Up Sum Assured on Maturity + Accrued Guaranteed Additions. As the benefits are fixed on this policy, the SSV is the best-estimated value for future benefits at the time of surrender. The Special Surrender Value reflects the experience and determination as per the proxy asset share or Gross Premium Reserve. SSV methodology is reviewed periodically based on the views of the likely future financial, demographic circumstances which are subject to change prior to the approval from the IRDAI.
A lapsed policy can be revived within 5 years from the date of its first unpaid premium that may be subject to satisfactory proof of insurability as per the company from time to time. On the policy revival, you will be eligible for the future Guaranteed Additions. The revival will see the addition of the difference between the guaranteed additions accrued, if any, and original guaranteed additions for the period during which the policy has attained the lapsed/reduced paid Up status The revival will be affected by the Company’s board approved policy only.
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