SBI Life Launches Smart Income Protect Plan

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SBI Life Launches Smart Income Protect Plan

SBI Life Insurance today launched a traditional savings plan that offers tax – free regular income at guaranteed rate of returns.

This regular income will be at a rate of 11 per cent of the sum assured or paid sum assured for the next 15 years, after maturity, the company said in a statement.

Catering to the risk – averse investors, ‘smart income protect’ offers life insurance cover, lumpsum benefit at maturity and regular guaranteed payouts for 15 years, after maturity, the statement said.

SBI Life’s smart income protect caters to future needs like post retirement or child’s future expenses through its attractive feature of guaranteed annual payouts.

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Not only the policyholder receives a lumpsum bonus at maturity but also guaranteed payout for 15 years after the maturity. The lumpsum bonus, at maturity, comprises Vested Reversionary Bonuses and Terminal Bonus, if any.

In the event of a policyholder’s death, the sum assured is immediately payable to policyholders’ nominee or legal heir as a lumpsum, along with bonuses.

Customers can opt for a premium payment term of five, 10 or 15 years. Offering the possibility of enhancing protection, the plan is equipped with wide range of riders including accidental death benefit rider, accidental total and permanent disability rider and Criti Care 13 non – linked rider, said a press release issued by the company.

For instance, a policyholder aged 40 years, invests ₹ 38,680 in SBI Life’s Smart Income Protect, every year, for the next 15 years. At maturity, he would receive a lump sum amount, of ₹ 3 lakh or ₹ 1.68 lakh projected at 10 percent or 6 percent respectively, as vested reversionary bonus, of. Further, he will continue to receive tax – free annual payouts of ₹ 55,000 for 15 years, after maturity. Also, in case of an unfortunate event, during his premium payment term, his nominee or legal heir would receive a sum assured amount of ₹ 5 lakh, the release said.

Akshay Mehrotra, Chief Marketing Officer at says that while buying an insurance policy which offers guaranteed savings, one should look at the internal rate of return ( IRR ) and the total amount that you will get back at maturity. Since it is deferred payment, one should look at the time value of money.

“In case of this policy, the actual return will work out to about 5 – 6%, and not 11%, since the money will come to you only after 15 years. So, why should not look at it when bank fixed deposits are offering returns of 9% or unit linked plans are offering 8%?” Mehrotra says.

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