Life Insurance SBI Life Insurance Smart Future Choices Plan
SBI Life Smart Future Choices Plan
SBI Life – Smart Future Choices is an individual, non-linked, participating, life insurance savings product that is designed especially for high net-worth Individuals. This allows you to choose benefit payouts in a lump sum or as flexible payments. Additionally, with this plan, you can avail of regular cash bonus payouts to meet your needs at various life stages. The plan also gives you the flexibility to review your choices as per your changing needs from time to time during the policy term. This plan has two variants, and you can choose any of them to cater to your needs. The cash bonus facility helps you with some extra amount that can be used as per your necessity. With this plan, you can stay protected throughout the policy term. To know more about this plan, have a look at the following mentions.
Eligibility Criteria
Parameters | Descriptions | ||||||||||
Age at entry | Minimum – 18 years, Maximum – 50 years | ||||||||||
Maximum age at maturity | 70 years | ||||||||||
Policy term | Minimum – 12 years, Maximum – 30 years | ||||||||||
Policy term and premium payment term combination available |
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Premium payment frequency | Yearly, Half-yearly, and Monthly (The premium for monthly mode as a percentage of annualized premium is 8.50%, and for Half-Yearly Premium is 51.0% of annualized premium.) | ||||||||||
Annualized premium (In multiples of Rs. 1000) | Minimum – Rs. 1 lakh Maximum – No upper limit (Subject to board approved underwriting policy) | ||||||||||
Basic sum assured | Minimum – Rs. 6,55,000 Maximum – No upper limit (Subject to board approved underwriting policy) |
What Are The Benefits of SBI Life Smart Future Choices?
This plan has come up with a sack full of facilities and benefits that promise to keep you protected throughout the policy term. The following table gives you the details of these benefits. Have a look.
Parameters | Details |
Benefit options | You can enjoy the flexibility to avail of your benefits as per your financial needs, with two benefit options to choose from. You may also opt to change your benefit option later, which can be done after the end of the premium payment term (PPT) up to nine months. This new benefit structure will be applicable from the next policy anniversary. • Classic Choice: With this option, you can enjoy a Lump sum maturity benefit at the end of the policy term along with life cover throughout the policy term, provided the policy is in force and the life assured survives till the end of the policy term. • Flexi Choice: On opting for Flexi Choice, you will be eligible to get 10% of the Basic Sum Assured as a survival benefit at specified intervals, along with a maturity benefit of 80% of the Basic Sum Assured at the end of the policy term, along with life cover throughout the policy term. |
Survival benefit | Under Flexi Choice Option, you will be eligible to get a benefit payout of 10% of the Basic Sum Assured each at specified intervals. You can defer one or both survival benefits as per your financial requirement. The deferred survival benefit, along with applicable interest, can be taken anytime during the remaining policy term in full or will be paid at the death of the life assured/surrender/maturity. No Survival Benefits are payable under the Classic Choice option. |
Maturity benefits | On survival till the end of the policy term, the following will be payable in lumpsum: Under Classic Choice: Guaranteed Sum Assured on Maturity + Accumulated Deferred Cash Bonuses if any+ Terminal bonus if declared. The guaranteed Sum Assured on Maturity can be up to a maximum of 138% of the Basic Sum Assured, based on age, premium payment term, and policy term you have opted for. Under Flexi Choice: Guaranteed Sum Assured on Maturity +Accumulated survival benefits, if any, + Accumulated Deferred Cash Bonuses, if any + Terminal bonus if declared. The guaranteed Sum Assured on Maturity will be equal to 80% of the Basic Sum Assured. |
Death benefits | On Death of the life assured during the policy term the following will be payable: Under Classic Choice: Higher of Sum Assured on Death + Accumulated Deferred Cash Bonuses, if any+ Terminal bonus, if declared, or Minimum Death Benefit, which is equal to 105% of total premiums received up to the date of death. Where Sum Assured on Death is 11 times of annualized premium. Under Flexi Choice: If the policyholder has opted for Flexi Choice, then in addition to the above benefit, the Accumulated Survival Benefit, if any, will also be paid. Where Accumulated Survival Benefit is the deferred Survival Benefits along with the applicable interest, if any. |
After death benefit | On payment of the death benefit, the policy will terminate, and no further benefits will be available under the policy. The nominee can choose from one of the following options for availing death benefit amount:
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Free look period | 15 days – For policies other than electronic policies and policies sourced through any channel other than Distance Mode. 30 days – For electronic policies and policies sourced through Distance Mode from the date of the receipt of the policy document. |
Grace period | 30 days – For yearly and half-yearly premiums 15 days – For monthly premiums |
Key Highlights of SBI Life Smart Future Choices
Apart from the above benefits, this plan has come up with a bunch of special facilities that have made the plan unique and popular among consumers. The mentions are as per the followings.
Bonuses:
If declared, Cash Bonus and Terminal Bonus will be based on Statutory Valuation carried out at the end of every financial year.
- To take Cash Bonus as and when declared: The Cash Bonus(es) for the first policy year and second policy year (if declared) will be payable at the end of the second policy year with interest, provided the policy is in force. From the third policy year onwards, the cash bonus (if declared) is payable at the end of every subsequent policy year.
- To defer the payment of Cash Bonuses: You can also defer the cash bonus (if declared). Accumulated deferred cash bonus can be paid to the policyholder in lumpsum on request at any point of time during the policy term or at the death of the life assured/ Surrender/Maturity. Accumulated deferred cash bonus is the deferred cash bonus accumulated along with applicable interest.
- Terminal bonus: A terminal Bonus may be declared under the policy in the year when the policy results in a claim either by death, surrender, or maturity, as per the company’s Bonus policy.
Tax Exemption Benefits:
The insured person may be eligible for Income Tax benefits/exemptions as per the applicable income tax laws in India, which are subject to change from time to time.
Cancelation:
If you are not satisfied with the terms and conditions of the policy, you may cancel it. In that case, your request for cancellation of the policy under the free look option must reach our SBI Life Office within a period of 15 days or 30 days. Premiums paid by you will be refunded subject only to a deduction of the proportionate risk premium for the period of cover and the expenses incurred on medical examination of the proposer and stamp duty charges.
Revival of the policy:
If the premiums are not paid within the grace period and the policy is not surrendered, the policy may be revived for full benefits within a revival period while the life assured is still alive. The revival period is equal to 5 consecutive years from the date of the first unpaid premium. The revival will be considered on receipt of a written application from the policyholder along with the proof of continued insurability of life assured and on payment of all due premiums with interest.
Auto Cover Period:
An Auto cover period is available under the product during which if at least the first 2 full years’ premiums have been paid and any subsequent premium is not duly paid, an Auto Cover Period of 1 year from the due date of first unpaid premium will be available and if at least 5 full years’ premiums have been paid and any subsequent premium is not duly paid, Auto Cover Period of 2 years from the due date of first unpaid premium will be available. During Auto-Cover Period, Survival and Maturity Benefits as applicable for Paid-up policies are payable. Death Benefit, as applicable for in-force policies, is payable during the Auto Cover period, with deduction of unpaid and/or balance premium, if applicable. No cash bonus(es) will be payable under your policy during the Auto Cover Period.
Benefits under a paid-up policy:
The following benefits are available under a paid-up policy.
- Death Benefits During Auto Cover period: Death benefit, as payable under an in-force policy, will be paid after deduction of the unpaid premium in respect of the policy up to the date of death and the balance premium for the policy year during which death has occurred.
- Death Benefit After expiry of Auto Cover period: On the death of the Life Assured, paid-up Sum Assured on death along with the Accumulated Survival Benefits, if any, plus Accumulated Deferred cash bonuses, if any, and the Terminal Bonus, if declared, is payable.
- Maturity benefits: For the Flexi Choice option, under a paid-up policy, if the life assured survives till the end of specified years, he/she will be eligible to get 10% of the paid-up basic sum assured as survival benefits at specified intervals.
Paid-up basic sum assured = Basic Sum Assured X (No. of premiums paid / Total number of premiums payable
- Maturity Benefits: The Sum Assured on Maturity under a paid-up policy will be reduced to such a sum called Paid-up Sum Assured on Maturity and will be equal to {Guaranteed Sum Assured on Maturity X (No. of premiums paid / Total number of premiums payable)}. If the life assured survives till the end of the policy term, the Paid-up Sum Assured on maturity, along with the Accumulated survival benefits, if any, and Accumulated Deferred Cash Bonuses, if any, and Terminal bonus, if declared, is payable.
Surrender of the policy:
The policy acquires Surrender Value only if at least the first 2 full policy years’ premiums have been paid. The policyholder may surrender an in-force policy or paid-up policy at any time during the policy term. On surrender, the higher of the Guaranteed Surrender Value (GSV) or the Special Surrender Value (SSV) will be paid. Accumulated Survival Benefit (if any) and Accumulated Deferred Cash Bonus (if any) will also be added to the Surrender Value. On payment of the surrender benefit, the policy will terminate and no other benefit will be payable.
Staff Discount:
Staff Discount is applicable for employees, retired employees, VRS holders, minor children, and spouses of employees of SBI Life Insurance Co. Ltd and State Bank of India, RRBs sponsored by State Bank of India, and subsidiaries of State Bank group. The discount rate is a 6% increase in the basic sum insured.
What Are The General Exclusions of SBI Life Smart Future Choices?
Understanding a policy is not completed if you do not thoroughly review its exclusions. Therefore, to offer you a comprehensive idea of the policy, and to avoid future complications, here are the exclusions of the SBI Life Smart Future Choices Policy.
- Any type of breach of law with criminal intent will be permanently excluded from the policy.
- If there is anything that does not follow the terms and conditions of the policy and the company, that will also fall under the category of exclusions.
- In case of death due to suicide, within 12 months from the date of commencement of risk under the policy or from the date of revival of the policy, as applicable, the nominee or beneficiary of the policyholder will be entitled to at least 80% of the total premiums paid till the date of death or the surrender value available as on the date of death whichever is higher, provided the policy is in force. After paying the benefit as applicable, the contract will be terminated.
How Does The SBI Life Smart Future Choices Policy Work?
After going through the inclusions and exclusions of the policy, the next important thing to know is how this policy works. Here is an example to offer you a better idea of the policy.
Mr. Kumar, a 36-year-old businessman, bought SBI Life Smart Future Choices Policy. Let us find out how much premium amount he has to pay to avail of the benefits of the policy and how much maturity benefit he will receive for the given data.
Parameters | Credentials |
Age | 36 years |
Premium payment term | 10 years |
Policy term | 20 years |
Benefit option | Classic Choice |
Bonus option | Cash Bonus |
Premium frequency | Yearly |
Sum assured | Rs. 53,91,000 |
Premium amount | Rs. 5 lakhs |
Maturity benefits | At an assumed rate of returns: @ 4% – Rs. 61,47,088 or @ 8% – Rs. 65,28,501 |
Frequently Asked Questions
For this, follow the below table.
Premium payment term | Policy term | Survival benefit of 10% basic sum assured is payable at the end of the policy year |
7 | 12 | 8, 10 |
7 | 15 | 8, 12 |
7 | 20 | 8, 14 |
7 | 25 | 8, 17 |
10 | 15 | 11, 13 |
10 | 20 | 11, 16 |
10 | 25 | 11, 18 |
10 | 30 | 11, 21 |
12 | 20 | 13, 17 |
12 | 25 | 13, 19 |
12 | 30 | 13, 22 |
15 | 20 | 16, 18 |
15 | 25 | 16, 21 |
15 | 30 | 16, 23 |
The applicable interest rate will be the RBI Reverse Repo rate less 100 basis points as of 1st April of the financial year. Currently, the Reverse Repo rate is 4.00% p.a. for the financial year 2020-21, and the applicable interest rate would be 3.00% p.a.
The minimum installment payment for various modes will be as below:
Mode of installment payment | Minimum installment amount |
Monthly | Rs. 5000 |
Quarterly | Rs. 15000 |
Half-yearly | Rs. 25000 |
Yearly | Rs. 50000 |
The nominee can avail of this benefit by requesting in writing at the time of death claim intimation. The first installment will be on the date of death claim acceptance.
The installment amount payable is equal to the deferred amount multiplied by the below-mentioned installment factors.
Installment factors | ||||
1 | 2 | 4 | 12 | |
Year/frequency | Yearly | Half-yearly | Quarterly | Monthly |
5 | 21.60% | 11.12% | 5.53% | 1.84% |
The nominee may at any time during the installment payout period, opt to take the remaining installments in lumpsum which will be equal to the discounted value of the remaining installment amount. The discount rate would be 4% p.a.
The cash Bonus would be expressed as a percentage of the Basic Sum Assured and there will be two options available at the time of policy inception for availing the Cash Bonus if declared. You also can change the bonus type by sending a written request at least 30 days before the end of the policy year. The change would be applicable from the next policy anniversary. The change in bonus type will only be applicable for future cash bonus(es) (if declared). If the earlier cash bonus(es) was deferred, the same will continue earning interest. This option can be exercised multiple times during the policy term.
Policy Loan will not be available.
A policy acquires paid-up benefit only if full premiums have been paid for at least the first two consecutive policy years. A policy will lapse without acquiring paid-up benefits if less than the first two full consecutive years of premiums have been paid by the policyholder and any subsequent premiums have not been paid.
A lapsed policy can be revived within a period of 5 consecutive years from the date of the first unpaid premium. All the benefits under the policy shall cease after the expiry of the grace period from the date of the first unpaid premium and no benefit shall be payable under the policy.
Guaranteed Surrender Value (GSV) is equal to:
- Classic Choice: GSV factors multiplied by total premiums paid Plus Surrender value of the terminal bonus if any.
- Flexi Choice: GSV factors multiplied by total premiums paid less survival benefits applicable till the date the surrender request is made, Plus the Surrender value of the terminal bonus if any. The GSV factors will depend on the policy year in which the surrender request is made and are guaranteed in nature.
The Special Surrender Value will be non-guaranteed and based on an assessment of the asset share progression at different durations of the policy. This assessment would be based on the past financial and demographic experience of the product/group of similar products and likely future experience and will be reviewed from time to time depending on changes in internal and external experience and likely future experience. The special surrender value will be arrived at by multiplying the paid-up value at maturity with SSV factors.
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