The SBI Smart Scholar Plan is a Unit Linked Child Plan designed to provide for the child’s future even if the parent is not around. The SBI Smart plan offers insurance coverage and market-linked returns to accumulate a substantial corpus for the child’s future.
Table of Contents
What is SBI Life Smart Scholar Plan?
SBI Life Smart Scholar Plan is a Unit Linked Life Insurance plan where a parent’s Life is insured. Parents having a child aged between 0 – 17 years can purchase the plan.
You can pay premiums for a limited period, whereas the policy benefits would continue till your child becomes an adult.
Invest in policy ( choose from 9 Fund options) and take accumulated funds at the end of the term. You can use accumulated fund value for your child’s higher education, marriage, financial security or anything else.
In between withdrawals are also allowed to meet unplanned expenses.
SBI Smart Scholar Plan Details
Maturity benefit
On completion of the policy term, maturity benefit i.e. the fund value shall be paid to the policyholder in a lump sum payment.
What if you are not around ( Death Claim)
In the unfortunate event of parent’s ( insured) death, the SBI smart scholar policy will give either or
- Basic Sum Assured or 105% of the total premiums received upto the date of death
- SBI continues to pay your future premium(s) on your behalf (inbuilt Premium Payor Waiver Benefit) and the accumulated fund value will be paid at maturity.
- In case of accidental death or accidental total and permanent disability, an Additional benefit equal to the Accident benefit Sum Assured is also paid The Accident Benefit and Premium Payor Waiver benefits are not available in the Single Premium policies.
- Loyalty additions will also be added.
SBI Life – Smart Scholar Eligibility
| Feature of SBI Life – Smart Scholar policy | Eligibility Conditions |
| Minimum Entry Age | Parent – 18 Years ; Child – 0 Years |
| Maximum Entry Age | Parent – 57 Years ; Child – 17 Years |
| Minimum Maturity Age | child -18 Years |
| maximum Maturity Age | Parent (Life Assured): 65 Years Child – 25 Years |
| Minimum Annual Premium | PPT > 8 Years -Yearly 24000/ Half Yearly -16000, Quarterly- 10000/Monthly 4000 PPT 5-7 Years -Yearly 50000/ Half Yearly -25000, Quarterly- 12500/Monthly 4500 Single Premium Rs 75000 |
| Maximum Annual Premium | Rs 250000 |
| Premium Mode | Limited Premium upto the policy term/ Single Premium |
| Policy Term | 8 years to 25 Years Premium paying term- 5 years to 25 Years/ Single Premium |
| Basic Sum Assured Regular & Limited Payment | Limited Premium upto policy term: 10 x Annualised Premium |
| Basic Sum Assured – Single Premium | 1.25 * Single Premium |
SBI Smart Scholar – Investment Fund Options
| 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 | |
| Discontinued Fund | Money Market Instruments -0%-40%Government Securities- 60%-100% | Low | |
SBI Life Smart Scholar Plan Benefits
- Dual protection for your child’s future- in case of any eventuality with the insured parent
o lumpsum payment is given to the child, but the policy continues
o Inbuilt Premium Payor Waiver benefit get activated and future premiums are paid by the company - o Maturity Benefit is given again as it was intended previously.
- Accident Claim– In case of accidental death, Accidental Death benefit and Accidental Total and Permanent Disability (Accidental TPD) claim, are given to the family.
- Loyalty Additions – Additional allocation of units by way of regular Loyalty Additions, giving periodic boosts to your investments for in-force policies.
- Enhanced investment opportunity through 9 varied fund options
- Twin benefit of insurance cover and market linked returns.
- Flexible options to meet your changing requirement.
- Liquidity through partial withdrawal(s)
- Switching between funds are allowed.
- Partial withdrawals are available from the 6th policy year onwards.One free partial withdrawal in a policy year is allowed.
Fund Switch
You can switch your investments among the available 9 funds to suit your changing investment needs during the policy term.
The minimum switch amount is Rs.5,000. Two switches are allowed free of charge in a policy year.
A charge of Rs.100 will be levied per switch more than free switches in the same policy year.
Unused free switches cannot be carried forward.
Partial withdrawals
A maximum of 2 partial withdrawals can be made in one policy year. For a policy term of 10 years or below maximum number of switches are 5 partial withdrawals in the entire policy term.
While it is 10 partial withdrawals are allowed for policy terms above 10.
IS SBI Smart Scholar Tax Free?
You are eligible for Income Tax benefits u/s 80C for up to 1,50,000 in a Financial year.The maturity amount is tax-free under section 10(10)D of the Income Tax Act( if the sum insured is at least 10 times the annual premium).
Can I surrender Before 5 Year Completion?
The Unit Linked Insurance products do not offer any liquidity during the first five years of the contract. The policyholders will not be able to surrender or withdraw the monies invested in Unit Linked Insurance Products completely or partially till the end of the fifth year.
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.
SLet’s say Bestii singh purchased this policy and paid a premium of Rs 1 lac.
He will pay Rs 6000 as Premium Allocation Charges. After that, Rs. 94000 will be invested in the first year.
For the Second year 95500 will be invested. And so on.
Policy Administration Charge:
A monthly Policy Administration Charges of Rs 50 per month will 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 rupees will be deducted.
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 94000) will be deducted.
| 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. |
| 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 |
SBI Smart Scholar plan returns
Calculating returns and gauging returns from a ULIP is a pretty difficult task. Still to find out SBI Smart Scholar interest rate, please follow the procedure.
- Go to the browser
- type SBI Smart Scholar plan – Equity Fund/ ….. or other fund name.
- Check annualized return of last 1/2/5 years and so on.
To get your benefits or your fund value…
Just check your alloted no of units and multiply it with NAV of your Fund ( written on top left side under fund name)
Suppose Your Fund units are 100 and NAV is 51.069
So your accumulated fund amount will be 100*51.069 = Rs.5106.9
SBI Smart Scholar plan – Review
Whether you should buy Smart Scholar SBI is a big question, which you need to answer yourself. How?
I will give the inputs, you derive SBI Smart Scholar plan good or bad yourself.
Ready?
What do you get from the policy?
- You get pretty good maturity amount
- Life insurance cover
- tax benefit
- tax-free maturity
SBI Smart Scholar Disadvantages
- Low returns as compared to mutual funds
- No knowledge of where money is invested- Less transparency
- Very Low Life insurance cover, You can buy much higher coverage with term insurance
- High charges
- Low Liquidity
- No liquidity in the first 5 years
