SBI Life – Retire Smart Plan

SBI Life Insurance Company is one of the leading and most reputed insurance companies in India. The company was founded in the year 2001 as a result of the amalgamation of two biggest financial companies, State Bank of India and BNP Paribas Cardif. SBI Life Insurance Company operates across the country through its multi-distribution channels. SBI Life Insurance Company is known for offering a diverse range of customisable insurance and investment products to various customer segments.

What are Unit Linked Pension Plans?

Peace of mind and financial security are the two main important things that everyone wants to achieve for their golden years. Pension plans are designed to provide these two things. Unit-linked pension plans are market-linked pension products offered by the life insurance companies. Like any other unit-linked insurance plans, pension plans also come with both insurance and investment element. Unit-linked pension plans are locked-in for five years which helps you create a good corpus for your retirement.

SBI Life’s Retire Smart

SBI Life’s Retire Smart is a non-participating unit linked pure pension plan that provides the benefit of both protection and wealth creation. With the increasing longevity, early planning for retirement life has become very important. SBI Life’s retire smart helps you save systematically in order to get adequate income in your golden years.

Features of SBI Life’s Retire Smart Plan

  • Guaranteed additions up to 210% of annual premium which will boost your fund value
  • Regular payment of guaranteed additions starting from the end of the 15th policy year to end of the policy term.
  • Terminal additions of 15% of the fund value at the time of death or on vesting
  • ‘Advantage plan’ to professionally manage the investment funds
  • Flexibility to extend the vesting age

Benefits of SBI Life’s Retire Smart Plan

  • Death benefits: In case of the untimely death of the policyholder, higher of fund value + terminal addition or 105% of total premium paid till the date of death is payable to the beneficiary. The beneficiary will have below options.
    • Avail death benefits in a lump sum
    • Utilise the entire or part of death proceeds to purchase an annuity at the prevailing rate
  • Vesting benefits: At the age of vesting, higher of fund value + terminal addition or 101% of total premium paid is provided. There will be following options
    • Purchase annuity immediately
    • Purchase single premium deferred plan
    • Commute 1/3rd of proceeds and purchase annuity from 2/3rd of proceeds (as per current Income Tax laws)
    • Defer the vesting date
  • Tax benefits: Tax benefits for the premium paid can be availed under Section 80CCC of the Income Tax Act, 1961

Eligibility Criteria for SBI Life’s Retire Smart Plan

Eligibility conditions Minimum Maximum
Entry age 30 years 70 years
Vesting age 40 years 80 years
Plan type Regular premium/limited premium
Policy term (PT) 10 years 35 years
Premium paying term (PPT)
For Regular premium policy
For Limited premium policy

Same as the policy term
For the 10-year policy term: 5 years/ 8 years
For the 15/30 year policy term: 5/8/10/15 years
Premium payment frequency Yearly/half-yearly/quarterly/monthly (for monthly mode, three months premium needs to be paid in advance and renewal premium payment can be made only through ECS, debit card, credit card and SI

Premium range depending on the plan type and premium payment frequency

Plan type Premium payment frequency Premium range (in Rs.)
Minimum Maximum
Regular premium Yearly 24,000 No limit
Half-yearly 15,000
Quarterly 7,500
Monthly 2,500
Limited premium Yearly 40,000 No limit
Half-yearly 20,000
Quarterly 10,000
Monthly 5,000

How does SBI Life’s Retire Smart plan works?

When you pay a premium, after deduction of premium allocation charges it is invested in investment funds in various proportion to provide the maturity or vesting benefits. On vesting, you will have below three options:
  • You can immediately purchase an annuity plan to receive regular pension pay-outs
  • Invest the proceeds in a single premium deferred pension plan
  • Extend the vesting age if your age is below 55 at the time of vesting

What are the funds available for investment in SBI Life’s Retire Smart Plan?

Below are the three funds in which your premium is invested in to.

Fund options Asset allocation (in %) Risk profile
Equity Debt instruments Money market instruments
Equity pension fund II 80%-100% 0%-20% 0%-20% High
Bond pension fund II - 60%-100% 0%-40% Low to medium
Money market pension fund II - 0%-20% 80%-100% Low

Premium paid by you will be invested in various proportions in these funds through ‘Advantage plan’.

Depending on the remaining investment term to maturity, the allocation range would be:

No. of years to maturity Fund allocation %
Equity pension fund II Bond pension fund II Money market pension fund II
0-5 years 0%-30% 40%-100% 0%-60%
6-10 years 10%-40% 35%-90% 0%-55%
11-15 years 30%-50% 30%-70% 0%-40%
16 years and above 40%-75% 10%-60% 0%-35%

Who should buy SBI Life’s Retire Smart plan?

SBI Life’s retire smart plan is suitable for investors looking out for long-term investments that can maximise their savings and provide regular income after retirement. As SBI Life’s Retire Smart plan offers various fund choices to invest in, it’s suitable for investors of various risk profile.

When should you buy SBI Life’s Retire Smart plan?

Though retirement may seem decades/years away, planning well in advance can help you ensure live those golden years happily. As SBI life’s Retire Smart plan invests into the market, investing early can help you take advantage of time and various market cycles to grow your money.

Documents required for buying SBI Life’s Retire Smart plan

  • Age proof: Birth certificate/passport/school certificate etc
  • Income proof: Salary certificate/IT return
  • Identity proof: PAN card/Aadhaar card/passport/Voter’s ID card
  • Address proof: Bank account statement/electricity bill etc.

Discontinuance of premium in SBI Life’s Retire Smart plan

  • If the premium payment is discontinued during the first five years, fund value as on the date will be transferred to ‘discontinued policy pension fund’ net of discontinuance charges. You can revive the policy within 2 years from the date of discontinuance. If revival is not done, ‘discontinuance/surrender compulsory option’ will be exercised on the 1st business day of the 6th policy year.
  • If premium payment is discontinued after five years, the revival of policy can be done in 2 years. If revival is not done, ‘discontinuance/surrender compulsory option’ will be exercised. Alternatively, the policy can be converted as paid-up policy after which all the charges except premium allocation charges will be levied to keep the policy in force for the policy term.

Surrender of SBI Life’s Retire Smart plan

If the surrender is requested in the first five years, the fund value will be transferred to ‘discontinued policy pension fund’ and ‘discontinuance/surrender compulsory option’ will be exercised only on the 1st working day of the 6th policy year. If the surrender is requested after five years, ‘discontinuance/surrender compulsory option’ will be exercised immediately.

Loan facility in SBI Life’s Retire Smart plan

There is no loan facility in SBI Life’s Retire Smart plan.

Exclusions of SBI Life’s Retire Smart plan

If the life assured commits suicide within one year of policy commencement or from the date of revival, the policy will be considered void and all the benefits offered under the plan will cease. Fund value on the date of death intimation will be payable to the beneficiary.

Conclusion

SBI Life’s Retire Smart plan is competent investment product with flexible features and market-linked performance that helps you plan for stress-free post-retirement life. The plan also provides financial security to the family in the eventualities.


FAQs

Some of the major types of charges applicable are

Premium allocation charges: Once the premium is paid, these charges are deducted before investing. Details of charges are as below

Policy year Premium allocation charges (in %)
1 5.75%
2 4.25%
3-10 4%
11 onwards 2.5%

Policy administration charges: These charges are deducted monthly by cancelling appropriate units in the fund.

Charges are as below:

Policy year Policy administration charges
1-5 Rs. 45/ month
6 onwards Rs. 70/ month

Fund management charges: Fixed percentage of charges are deducted before calculating daily net asset value (NAV) for the relevant fund.

Fund name Fund Management Charges
Equity pension fund II 1.35% p.a.
Bond pension fund II 1% p.a.
Money market pension fund II 0.25% p.a.
Discontinued policy pension fund 0.50% p.a.

Mortality Charges: NIL

Discontinuance charges: When the policy is discontinued mid-way, charges will be levied as a percentage of annual premium or fund value. Details of charges as below:

Year of discontinuance For annual premium up to Rs. 25,000 For annual premium above Rs. 25,000
1 Lower of 20% X(AP or FV) subject to a maximum of Rs. 3,000 Lower of 6% X(AP or FV) subject to a maximum of Rs. 6,000
2 Lower of 15% X(AP or FV) subject to a maximum of Rs. 2,000 Lower of 4% X(AP or FV) subject to a maximum of Rs. 5,000
3 Lower of 10% X(AP or FV) subject to a maximum of Rs. 1,500 Lower of 3% X(AP or FV) subject to a maximum of Rs. 4,000
4 Lower of 5% X(AP or FV) subject to a maximum of Rs. 1,000 Lower of 2% X(AP or FV) subject to a maximum of Rs. 2,000
5 onwards Nil Nil

This option is applicable during complete withdrawal/revival/surrender of the policy. Under this, below options are made available to choose after completion of five policy years.

  • To purchase an immediate annuity, at the prevailing rate from the entire policy proceeds
  • To purchase single premium deferred pension product from the entire policy proceeds
  • To purchase immediate annuity with commutation option as applicable under the provisions of IT Act