SBI Life – Smart Wealth Builder is an Individual, Unit Linked, Non-Participating, Life Insurance Product. Smart Wealth builder plan is specially designed for your life goals like higher education for your children, their marriage, wealth creation for house, foreign travel or providing for old age, etc.
Table of Contents
SBI Life – Smart Wealth Builder Features & Eligibility
| Feature of SBI Life – Smart Platina Plus | Eligibility Conditions |
| Minimum Entry Age | 2 Years |
| Maximum Entry Age | 55 Years |
| Minimum Maturity Age | 18 Years |
| maximum Maturity Age | 70 years |
| Minimum Annual Premium | Regular Annual premium Rs 30000 Limited Premium Payment Rs 40000 Single Premium Rs 65000 |
| Maximum Annual Premium | Rs 250000 |
| Premium Mode | Yearly / Single Premium |
| Basic Sum Assured Regular & Limited Payment | (10* Annualized Premium) |
| Basic Sum Assured – Single Premium | 1.25 * Single Premium |
SBI Life- Wealth Builder – Policy Term
| Premium Payment Term | Policy Term | Premium Paying term |
| Regular Premium | 12 to 30 (both inclusive) | Same as policy years |
| Limited Premium Payment (Annual) | 12 to 14 (both inclusive) | 7 |
| 15 to 19 (both inclusive) | 7/10/12 | |
| 20 to 30 (both inclusive) | 7/10/12/15 | |
| Single Premium | 5 to 30 years | One time payment |
SBI Life Smart Wealth Builder – Policy term
How does SBI smart Wealth Builder plan work?
- Choose policy term
- Choose premium ( money) you wish to pay
- Decide your premium payment term
- Decide your fund choice
- Your monies invested in your chosen fund ( after deduction of premium allocation charges)
- Guaranteed Additions will be added in the policy
- You get fund value at maturity
You cannot surrender or withdraw the monies invested in Unit Linked Insurance Products completely or partially till the end of the fifth year.
What will you get from SBI Smart Wealth Builder?
- Guaranteed Additions
- Maturity Benefit -Fund Value
- Life Cover
What are the Guaranteed Additions
For regular premium and limited premium payment the below mentioned guaranteed addition will be given. The GA is calculated on basic one annual premium. Similarly, for single premium policy GA is fixed percentage of one time premium.
| Policy Year End10 | Regular Premium Policy5.00% | LPPT Policy | Single Premium Policy | |||
| 7 PPT | 10 PPT | 12 PPT | 15 PPT | |||
| 10 | 5.00% | 5.00% | 5.00% | |||
| 15 | 15.00% | 10.00% | 10.00% | 10.00% | 10.00% | 5.00% |
| 20 | 25.00% | 10.00% | 15.00% | 15.00% | 20.00% | 5.00% |
| 25 | 35.00% | 10.00% | 20.0% | 25.00% | 30.00% | 7.00% |
| 30 | 45.00% | 15.00% | 25.00% | 30.00% | 35.00% | 8.00% |
What are the Fund Options Available
The Various Fund Options are available to choose from
| Fund Choice | Minimum | Maximum | Risk |
| Equity Fund | Equity & Equity Related instrument -80-100%Debt Instruments- 0%-20%Money market instrument – 0%-20% | High | |
| Top 300 Fund | investing in stocks of top 300 companies Equity & Equity Related instrument -60-100%Cash & Money market instrument – 0%-40% | High | |
| Equity Optimizer Fund | equity exposure targeting higher returns through long term capital gains. Equity & Equity Related instrument -60-100%Debt Instruments- 0%-40% Money market instrument – 0%-40% | High | |
| Growth Fund | Equity & Equity Related instrument -40-90%Debt Instruments- 10%-60%Money market instrument – 0%-40% | Medium to high | |
| Balanced Fund | investmentin both equities and fixed income securities Equity & Equity Related instrument -40-60%Debt Instruments- 10%-60%Money market instrument – 0%-40% | medium | |
| Bond Fund | Debt Instruments- 60%-100%Money market instrument – 0%-40% | Low to medium | |
| Money market Fund | Debt Instruments- 0%-20%Money market instrument – 80%-100% | Low | |
| Bond Optimizer Fund | investing in a mix of Government Securities, Corporate Bonds, Money Market Instruments and upto 25 percent in Equity instruments.Equity & Equity Related instrument -0-25%Debt Instruments- 75%-100%Money market instrument – 0%-25% | Low to medium | |
| Pure Fund | The Fund invests in Equities of sectors other than –Banks, Financial institutions and non-banking financial companies,Breweries, distilleries, alcohol based chemicals, cigarettes, tobacco,Entertainment (Films, TV etc), Hotels, Gambling, Lotteries, Contests,Leather, Animal Produce, sugar and hatcheries.Equity & Equity Related instrument -80-100% Money market instrument – 0%-20% | High | |
| Midcap Fund | Investing in mid cap stocksEquity & Equity Related instrument -80-100%Debt Instruments- 0%-20%Money market instrument – 0%-20% | High | |
| Corporate Bond Fund | Corporate Bond- 70%-100%Govt. Security -0%-30%Money market instrument – 0%-30% | Low to Medium | |
| Discontinued Fund | Money Market Instruments -0%-40%Government Securities- 60%-100% | Low | |
What Charges you pay
Premium Allocation Charge :
The Premium Allocation Charge are deducted first, before investing your money, The leftover money is invested.
Let’s take a rough example to understand it.
Let’s say Bestii singh purchased this policy and paid a premium of Rs 1 lac.
He will pay Rs 9000 as Premium Allocation Charges. After that Rs. 91000 will be invested in the first year.
For the Second year 93500 will be invested. And so on.
| Policy Year | Regular Premium Policy | Limited Premium Policy | Single Premium Policy | |||
| 7Year PPT | 10Year PPT | 12Year PPT | 15Year PPT | |||
| 1 | 9.00% | 9.00% | 9.00% | 9.00% | 9.00% | 3.00% |
| 2 | 6.50% | 6.50% | 6.50% | 6.50% | 6.50% | NA |
| 3 | 6.50% | 6.50% | 6.50% | 6.50% | 6.50% | NA |
| 4 | 6.00% | 6.00% | 6.00% | 6.00% | 6.00% | NA |
| 5 | 6.00% | 6.00% | 6.00% | 6.00% | 6.00% | NA |
| 6 | 3.50% | 3.50% | 3.50% | 3.50% | 3.50% | NA |
| 7 | 3.50% | 3.50% | 3.50% | 3.50% | 3.50% | NA |
| 8 | 3.00% | NA | 3.00% | 3.00% | 3.00% | NA |
| 9 | 3.00% | NA | 3.00% | 3.00% | 3.00% | NA |
| 10 | 3.00% | NA | 3.00% | 3.00% | 3.00% | NA |
| 11 onwards | 0.00% | NA | NA | 0.00% | 0.00% | NA |
Policy Administration Charge:
A monthly Policy Administration Charges as stated below, shall be deducted by cancelling units at the prevailing unit price
Let’s take a rough example to understand it.
Let’s say Bestii singh purchased this policy and paid a premium of Rs 1 lac.
So after 91000 nothing will be deducted on the name of Admin charges for the first 5 years. After 5 year of completion every year 50 or 60 rupees will be deducted.
| Policy Year | RegularPremium and LPPT Policy | Single Premium Policy |
| 1-5 | Nil | Rs. 50/- per month |
| 6 onwards | Rs. 60/- per month | Rs. 50/- per month |
Policy Administration Charges are deducted on the first business day of each policy month.( whether you make a profit or loss, the company will deduct the money).
Policy Administration charges will be recovered by cancellation of units (at the prevailing unit price) on the first business day of each policy month.
The Policy Administration Charges would be subject to a cap of Rs.500 per month. However, the revision of charges would be subject to prior approval from IRDAI.
Fund Management Charges:
A certain fixed percentage of the relevant fund before calculating the NAV on a daily basis will be charged as per the rates below:
Let’s take a rough example to understand it.
1.35% of remaining money ( Above example 91000) will be deducted. So approximately Rs 1228 in first year and this will increase every year.
| Fund Name | Fund Management Charges |
| Equity Fund | 1.35% p.a. |
| Top300Fund | 1.35% p.a. |
| Equity Optimiser Fund | 1.35% p.a. |
| Growth Fund | 1.35% p.a. |
| Pure Fund | 1.35% p.a. |
| Midcap Fund | 1.35% p.a. |
| Balanced Fund | 1.25% p.a. |
| Bond Fund | 1.00% p.a. |
| Bond Optimiser Fund | 1.15% p.a. |
| Money Market Fund | 0.25% p.a. |
| Corporate Bond Fund | 1.15% p.a. |
| Discontinued Policy Fund | 0.50% p.a. |
Mortality Charges
Mortality charges will be based on your age and Sum at Risk at the time of charge deduction
Discontinuance Charge:
In case you decide to discontinue the policy. discontinuance charges will be applicable.
It is expressed as a percentage of a Single Premium / Annualized Premium or Fund Value. The year of discontinuance is the policy year in which the date of discontinuance falls.
For Single Premium Policies:
| Year of discontinuance | Discontinuance Charges |
| 1 | Lower of 2 % X (Single Premium or Fund Value) subject to maximum of Rs.3,000 |
| 2 | Lower of 1.5 % X (Single Premium or Fund Value) subject to maximum of Rs.2,000 |
| 3 | Lower of 1 % X (Single Premium or Fund Value) subject to maximum of Rs.1,500 |
| 4 | Lower of 0.5 % X (Single Premium or Fund Value) subject to maximum of Rs.1,000 |
| 5 onwards | Nil |
Death Benefit (For In-force policies)
The death benefit is paid higher of below options:
- Basic Sum Assured = 10 times of annualized premium
- Fund Value as on the date of death intimation
- 105% of the total Premiums received upto the date of death
- ( If any partial withdrawals done so far, will be deducted )
Settlement Option for Death Claims
Here the death benefit payout can be taken in instalments.
- The Settlement Period can be for a period of 2 to 5 years from the date of death.
- Payments will be made in the form of yearly, half-yearly, quarterly or monthly instalments, as chosen by the beneficiary.
- The company will make the first instalment payment under settlement option on the date of death claim acceptance
- and further payments will be made on the first day of each year, half-year, quarter or month depending on the chosen settlement frequency from the date of death.
During the settlement period, the investment risk is borne by the beneficiary.SBI Smart Platina Plus Review
Let’s first evaluate SBI Smart Wealth insurance plan benefits and disadvantages
Benefits of SBI Life Smart Wealth Builder
- Life cover
- Guaranteed additions for certain duration
- Income tax benefit U/S 80C
- Yearly payment options
- Limited premium payment options are available
- Market linked returns
- Partial withdrawals are allowed from the 6th policy year onwards or on attainment of age 18 by the life assured whichever is later
Disadvantages of SBI Smart Wealth Builder policy
- Low returns as compared to other investment options
- Long payment duration-
- High Premium allocation charges
- Other Charges makes lower investible premium
If we compare the return and benefits of the policy with PPF + Term insurance or ELSS MF + term insurance, you will be better off with the latter options.
Additionally, you get FD kind of return from SBI wealth builder policy. which also means you won’t be able to get inflation-adjusted returns.
Even if the return of 7-8 %, it is much lower than the inflation rate.
Thus even in the long run, you will lose money rather than building wealth. You will get Low inflation-adjusted returns.
Final thoughts
SBI Life Smart Wealth scheme is a ULIP plan but if we compare the return part of the policy with other options such as PPF plus term insurance or ELSS or term insurance, then the return and life cover are comparatively much lower. I
In addition, one has to make compulsory payments for the entire duration.
The high premium allocation and other charges will reduce the investible amount therefore investment purpose ( wealth building) won’t be served.
So, if your purpose to buy the plan, is investment, then strict NO for the SBI wealth plan.
But if you are good to go with saving only, and happy with FD kind of returns then go for it.
Plans to Build Wealth
You can always work with a Certified Financial planner and plan your finances, including Emergency funding, building a corpus for house purchase, and taking care of your health needs so that you can plan a better retirement income in your second inning, leading to a more secure and financially stable retirement.
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If you are serious about wealth building, it’s better to take professional help.
