SBI Life Smart Wealth Builder Plan

What is SBI Life Smart Wealth Builder Plan?

SBI Life Smart Wealth Builder is a non-participating Unit Linked Insurance Plan (ULIP) wherein investors can avail of the dual benefits of life coverage and enhanced investment opportunity. Investors can choose between different investment funds included under the Smart Wealth Builder plan. 

Individuals can consider the following points while selecting the best-suited investment plan:

• Investment risk appetite

• Fund performance history

• Objective

• Investment duration or tenure

Key Features of Smart Wealth Builder Plan

Listed below are the key features of Smart Wealth Builder plan:

1. Premium Payment Term Flexibility

   While buying a new SBI Smart Wealth Builder plan, you can opt for different premium payment modes as mentioned below:

   Premium Payment Type	Premium Payment Term (PPT)	Details
   Single Premium	PPT= Pay once (Policy Term= 5-30 Years)	Pay the total premium amount only once at the time of buying the policy
   Regular Premium	PPT= Policy Term        = 12-30 Years	Pay premiums periodically throughout the whole Policy Term (PT)
   Limited Premium	If Policy Term= 12-14 Years PPT= 7 Years If Policy Term= 15-19 Years PPT= 7/10/12 Years If Policy Term= 20-30 Years PPT= 7/10/12/15 Years	Pay premiums periodically for a few years of the policy term

2. Policy Term Options

   Premium Payment Type	Policy Term
   Regular Premium	Option A: 10 Years Option B: 15-30 Years
   Limited Premium	5-30 Years

3. Investment Funds under SBI Wealth Builder Plan

   The insurance company provides its investors with high SBI wealth builder returns via 11 funds for investment, as follows:

   • Equity Fund

   • Top 300 Fund

   • Equity Optimizer Fund

   • Growth Fund

   • Balanced Fund

   • Bond Fund

   • Money Market Fund

   • Bond Optimiser Fund

   • Pure Fund

   • Midcap Fund

   • Corporate Fund

   SBI Life Smart Wealth Builder Funds	NAV (in Rs.)	3-Year Returns Annually (in % p.a.)	Equity Assets u/the Fund (in %)	Debt Assets u/the Fund (in %)	Money Market Assets u/the Fund	Fund Profile Risk
   Equity Fund	Rs. 141.57	13.0%	80%- 100%	0-20%	20%	High-risk
   Top 300 Fund	Rs. 41.49	14.6%	60%- 100%	--	0- 40%	High-risk
   Equity Optimizer Fund	Rs. 38.82	12.1%	60%- 100%	0-40%	40%	High-risk
   Growth Fund	Rs. 68.69	12.5%	40%- 90%	10%- 60%	40%	Medium-to-High risk
   Balanced Fund	Rs. 55.79	9.7%	40%- 60%	20%- 60%	40%	Medium-risk
   Bond Fund	Rs. 41.03	4.6%	--	60%- 100%	40%	Low-to-Medium risk
   Money Market Fund	Rs. 29.94	4.1%	--	0- 20%	80%- 100%	Low-risk
   Bond Optimiser Fund	Rs. 17.42	--	25%	75%- 100%	0-25%	Low-to-Medium risk
   Pure Fund	--	--	80%- 100%	--	0- 20%	High-risk
   Midcap Fund	--	--	80%- 100%	20%	0-20%	High-risk
   Corporate Fund	--	--	70%- 100%	30%	30%	Low-to-Medium risk

   

4. Policy Discontinuation Fund

   If the policyholder chooses to discontinue the Smart Wealth Builder Plan before the ULIP lock-in period is over, the deposited fund amount is accumulated in the Discontinued Policy Fund.  

   The invested amount usually earns returns at a rate of 4% p.a., which is decided by the IRDAI.

5. Fund Switching Flexibility

   SBI Life Smart Wealth Builder Plan allows for two free switches per policy year. However, all investors must note the following things:

   • Rs. 100 per switch is charged from the 3rd switch onwards in a policy year

   • No carry-forward of free switches is allowed to the next policy year

   • Minimum amount allowed for fund switching is Rs 5,000

6. Change in Sum Assured

   The Sum Assured can be increased or decreased from the 6th policy year.

7. Facility to Re-direct Premium

   From the 2nd policy year, policyholders can redirect their premium without any charges.

8. Partial Withdrawals

   The lock-in period for a Smart Wealth Builder SBI ULIP Plan is 5 years. After 6th policy year, policyholders can make partial withdrawals on the Fund Value.

   • Policyholders can make one partial withdrawal free of charge per policy year.

   • Rs. 100 has to be paid from the 2nd partial withdrawal onwards.

   • One cannot carry forward the free partial withdrawal to the next policy year.

   • Only 2 partial withdrawals per policy year and 10 partial withdrawals in a full policy term are allowed.

9. Fund Settlement Option

   The nominee can get the Death benefits in equal instalments over 2-5 years after the death of the policyholder.

   • The instalment pay-out can be made annually, half-yearly, quarterly or monthly.

   • Fund switches are offered during this settlement period.

SBI Wealth Builder Plan Specifications

Benefits of SBI Life Smart Wealth Builder

On buying the SBI Wealth Builder ULIP Plan, the insured will receive the total Fund Value Assured on maturity and death. Moreover, the policyholder gets regular guaranteed returns, tax benefits and many other advantages.

The list of benefits offered by the plan are as follows: 

1. Maturity Benefits

   The investors can know their maturity value by using the SBI Life Smart Wealth Builder Return Calculator.

   Illustration of the maturity benefits of SBI Smart Wealth Builder is as follows: 

   Premium Payment Type: Regular pay

   Policy Term: 30 years

   Premium Payment Term: 30 Years

   Premium Payment Frequency: Annually

   Investment Fund Type: 100% Equity Fund

   Age at Policy Purchase	35 years
   Premium	Rs. 50,000
   Sum Assured	Rs. 5,00,000
   Fund Value at Maturity (@ 4%)	Rs. 21,74,877
   Fund Value at Maturity (@ 8%)	Rs. 42,95,463

2. Death Benefits Paid in Lump Sum or Instalments

   Upon unfortunate demise of the policyholder, the beneficiary can receive the payout as a lump sum or in instalments ranging between 2-5 years.

   How to calculate death benefits?

   Here’s an illustration to know the death benefits:

   Policy Term: 30 Years

   Premium Payment Mode: Regular Pay

   Annual Premiums Payed= Rs. 50,000

   Death of Policyholder= At the End of 20th Policy Year

   	Amount
   Death Benefit at a 4% rate	Rs. 12,46,085
   Death Benefit at an 8% rate	Rs. 19,28,918

3. Guaranteed Additions

   The Wealth Builder Plan provides the feature of Guaranteed Additions, which further increase the SBI Life Fund Value to buy new units of the Fund.

   • Additions are higher for longer policy terms

   • Percentage of guaranteed addition depends on the policy term and the premium payment method

   The following helps you understand the percentage of guaranteed additions provided by SBI Smart Wealth Builder for different premium payment policies:

   SBI Smart Wealth Builder Policy Years Completed	% of Additions for Regular Pay Policy	% of Additions for Limited Pay Policy				% of Additions for Single Pay Policy
   		For 7 years PPT	For 10 years PPT	For 12 years PPT	For 15 years PPT
   10 years	5% p.a.	5% p.a.	5% p.a.	5% p.a.	5% p.a.	5% p.a.
   15 years	15% p.a.	10% p.a.	10% p.a.	10% p.a.	10% p.a.	5% p.a.
   20 years	25% p.a.	10% p.a.	15% p.a.	15% p.a.	20% p.a.	5% p.a.
   25 years	35% p.a.	10% p.a.	20% p.a.	25% p.a.	30% p.a.	7% p.a.
   30 years	45% p.a.	15% p.a.	25% p.a.	30% p.a.	35% p.a.	8% p.a.

   Example of Guaranteed Addition Calculations:

   If a Regular Premium Plan is bought,

   Premium paid annually= Rs. 40,000

   Policy term= 30 years

   Guaranteed Additions to buy new Fund Units will be:

   Policy Completion Years	Rate of Guaranteed Additions	Amount of Guaranteed Additions
   10 years	5%	5% of Rs. 40,000 = Rs. 2,000
   15 years	15%	Rs. 6,000
   20 years	25%	Rs. 10,000
   25 years	35%	Rs. 14,000
   30 years	45%	Rs. 18,000

4. Tax Benefits

   A new tax regime was introduced in the Union Budget 2023 for FY 2023-24. However, if the taxpayer opts for old tax regime for the Financial Year 2023-24 (AY 2024-25), he/she can avail of the following tax benefits April 1, 2023 onwards:

   Sections u/Income Tax Act, 1961	Details
   Section 80C	Tax exemption of up to Rs. 1.5 lakhs is provided on the annual premiums paid in ULIP plans.
   Section 10(10D)	The income from maturity benefits of the Smart Wealth Builder ULIP Plan maturity are exempted from tax if the aggregate premiums paid annually are up to Rs. 2.5* lakhs.
   *Limit of Rs. 2.5 lakhs premium amount was added by the Union Budget 2021

   NOTE: There are no tax exemptions under the new tax regime 2023-24.

Applicable Charges in SBI Life Smart Wealth Builder Plan

SBI Life Smart Wealth Builder plan returns are paid to the investors after the deduction of certain charges. 

Additional Features of SBI Life Wealth Builder Policy

Here are additional features of the policy:

1. Grace Period

   30 days grace period is allowed for completing the premium payment.

2. Policy Termination or Surrender Benefit

   Policyholder is allowed to surrender the policy after 5 completed years.

   • If surrendered before 5 years, the fund value net of discontinuation charge will be credited to the Discontinued Policy Fund where it will earn a minimum of 4% p.a. growth. 

   • After completion of 5 years, the fund value in the Discontinued Policy fund as of that date will be paid to the policyholder. 

   • If surrendered after 5 completed policy years, the entire Fund value on the date of surrender is paid without any charges.

3. Free Look Period

   If you would not be pleased with the coverage, and terms and conditions of the Smart Wealth Builder policy, SBI life insurance provides the option of cancelling the policy within 15 days of receipt of the policy documents, provided there has been no claim.

Exclusion in Suicide Cases

The benefit paid in case of suicide within 12 months of policy inception is the fund value at the time of policy claim.

All the charges (except Fund Management Charges) deducted till date of suicidal death intimation to the company are deposited back in the fund value.

Documents Required

Policyholder has to submit the following documents with SBI Life insurance:

• Filled ‘Application form/ proposal form’ of the SBI Smart Wealth Builder ULIP Plan

• Accurate medical history details.

• Address proof

• KYC documents

A medical examination may be required in some cases based on the sum assured and age of the person.

In Conclusion

Beside insurance, Smart Wealth Builder plan also have an investment component that is subject to market risks. It is why all investors must assess their needs and requirements before investing in the plan.

SBI Life Smart Wealth Builder is a ULIP scheme that helps its investors reap dual benefits to get better future returns.

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