Review of SBI Life – Smart Power Insurance
SBI Life Smart Power Insurance is a type I unit – linked insurance plan, a kind of ULIP plan. Of it’s one of many but it’s much more than that. Just as an Ulip, it invests your money in profitable ventures in the market. Considering that it’s a type I plan, it gives either the death benefit or the sum assured of the fund value, whichever stands higher at the time of death of the policyholder. It’s both a profitable as well as a popular plan, considering the fact that it comes from India’s largest bank, State Bank of India.
The returns for policy holder
It offers an insurance cover where in the minimum sum assured or the death benefit one can choose is higher of ten times the annual premium or half of the policy to be multiplied by the annual premium. The policy holder may also increase the sum assured up to a maximum of 20 times the annual premium. However, as a matter of regulations, the policyholder is required to give the nominee a minimum of 105% of all the premiums paid until his/her death. The maximum amount an insurer can get out of this policy is not more than Rs. 1 crore, which means that the insurer can’t opt for a very high annual premium. There are seven types of investments an insurer can choose from.
The benefits & features
The smart power insurance from SBI Life offers a trigger investment fund option that can be maintained with an asset allocation of 80% equity and 20% debt. Therefore, if the equity exposure increases by more than 15%, the funds will sell off units in equity and buy more into debts and vice-versa. An insurer can also choose to increase the sum assured or even choose the death benefits in this plan. It offers a possibility of increase in sum assured by 10% in the sixth year and increase by 10% in the block of five years with a maximum increase of up to 1 crore.
If you want to compare the costs of Ulips, there are too many in the market to consider and evaluate. However, considering earlier type I plans, a cost of almost 2 per cent points do appear on the higher side. Having said that, type II Ulips are considered more profitable and beneficial since they offer both the sum assured as well as the fund value on death.