SBI Life – Saral Pension Plan

SBI Life Insurance Company is a joint venture between State Bank of India, the largest state-owned banking and services company in India and BNP Paribas Cardif, a multinational insurance company headquartered in Paris. Unrivalled strength of State Bank of India and the strong global presence of BNP Paribas has contributed hugely to the tremendous success of SBI Life Insurance Company. With a multi-channel distribution network and customisable products for every customer segment, SBI Life Insurance Company is emerging as one of the best insurers in India. The company has been consistently recognised and awarded for its contribution to the Indian insurance sector.

What is a Pension Plan?

Pension plans offered by life insurance companies are the combination of insurance and investment for retirement life. Pension plans are designed to provide life cover as well as pension benefits for happy retirement life. With the proceeds of pension plans, you can purchase annuity plans and opt for monthly pension benefits. Basically, it’s crafted to secure your golden years.

SBI Life’s Saral Pension Plan

SBI Life’s Saral Pension plan is non-linked, participating in a traditional pension plan. SBI Life’s Saral Pension plan gives a great opportunity to save and build a corpus for retirement years. With this, you will not only avail life cover but also create wealth to live a happy life later. With many challenges of rising cost, inflation and expenses, it requires you to save enough and systematically in order to maintain the same lifestyle even after retirement. SBI Life’s Saral Pension plan comes with various features to secure your golden years.

Features of SBI Life’s Saral Pension plan

  • Guaranteed simple reversionary bonuses for the first five years; at 2.50% of sum assured as a bonus for the first three years and at 2.75% of sum assured as a bonus for the next two years.
  • Terminal bonuses, if any is payable on maturity
  • Life protection during the policy term
  • Vesting date can be deferred up to the age of 70 years or deferment period of the policy can be extended.
  • SBI Life’s preferred term rider as an additional benefit

Benefits of SBI Life’s Saral Pension Plan

  • Death benefit :In the event of the untimely demise of the policyholder, higher of the below is paid as death benefits.
    • Total premiums paid at an interest rate of 0.25% per annum compounded annually + vested simple reversionary bonuses + terminal bonus if any
    • 105% of total premiums paid till the date of death
    Further, the nominee can opt for either of the below options
    • Receive entire benefits as a lump sum
    • Purchase an annuity using entire proceeds or part of it, at the rate prevailing then.
  • Vesting benefit : at the age of vesting, benefits will be higher of sum assured or total premiums paid accumulated at an interest rate of 0.25% p.a. compounding annually + vested simple reversionary bonuses + terminal bonuses, if any. Options available for you are:
    • Purchase immediate annuity using entire proceeds
    • Commute one-third of the proceeds and purchase annuity out of two-third proceeds (as per the current income tax law)
    • Utilize entire proceeds to purchase a single premium deferred pension product
    • Defer the vesting date (which can be extended till 70 years of age), if you are below 55 years of age on vesting.
  • Paid-up value benefit : Policy acquires paid-up value status if you pay three years of the full premium. Sum assured for paid-up policies will be reduced. Also, guaranteed bonuses will not be applicable for paid-up policies.
  • Additional rider benefit :You can customise the policy by availing SBI Life’s preferred term rider as an additional benefit. In addition to the death benefit, this rider also pays out additional benefits during eventualities. You can enhance your life protection with this optional rider available.
  • Tax benefit : Premiums paid on SBI Life’s Saral Pension plan qualifies for tax deduction under Section 80C of the Income Tax Act, 1961. Commuted pension proceeds are tax-free under Section 10 (10A) of the Income Tax Act.

Eligibility Criteria for SBI Life’s Saral Pension Plan

Eligibility conditions Minimum Maximum
Entry age
Single premium
Regular premium

18 years
18 years

65 years
60 years
Vesting age 40 years 70 years
Policy term 10 years 40 years
Premium payment term Same as the policy term
Sum assured Rs.1,00,000 No limit
Plan type Single premium / Regular premium
Premium payment mode Single/yearly/half-yearly/monthly (Premium for various modes as a percentage of annual premium are given below)
Monthly premium – 8.4% of the annual premium
Half-yearly premium – 50.2% of the annual premium
Premium range Rs. 7,500 p.a No limit

Eligibility conditions for SBI Life – Preferred Term Rider

Eligibility conditions Minimum Maximum
Entry age 18 years 50 years for regular premium and 55 years for single premium
Maturity age - 60 years
Policy term 10 years for regular premium and 5 years for single premium 30 years
Premium paying term Same as the policy term
Sum Assured (in Rs.) 25,000 50,00,000
Please note: rider sum assured cannot be more than the basic sum assured of the plan

Who should buy SBI Life’s Saral Pension plan?

SBI Life’s Saral Pension plan is a great investment option for all the investors planning for retirement. It is basically targeted at working class individuals who need to build a decent corpus for golden years of life that could provide a regular source of income.

When should you buy SBI Life’s Saral Pension plan?

Retirement planning should be made in the early years of your career as time can help you build a good amount of corpus for your post-retirement life. It’s ideal to invest in SBI Life’s Saral Pension plan as soon as you start earning. However, SBI Life’s Saral Pension plan allows you to invest any time during the age of 18 years to 65 years.

Documents required for buying SBI Life’s Saral Pension Plan

  • PAN card is mandatory
  • Identity proof: Aadhaar card/PAN Card/Passport/Voter’s ID card/Driving license etc.
  • Address proof: Property tax receipt/Bank Statement/latest electricity bill etc.
  • Age proof: Birth certificate/school certificate/ Passport etc.
  • Income proof: Employer certificate/IT return

Discontinuance of premium in SBI Life’s Saral Pension Plan?

There are two scenarios to discontinuation of premium payment in SBI Life’s Saral Pension plan. Discontinuance of premium within the first three years of policy: Policy will lapse and policy benefits will be ceased immediately. The policy can be revived within two years from the date of first unpaid premium by making payment of all dues along with interest if any. If revival is not done, the policy will be terminated.

Discontinuance of premium after three years of policy: After payment of three full year’s premium, policy acquires paid-up status. Hence, if further premium payments are discontinued, policy benefits will continue but at the proportionately reduced value. The policy can also be revived within two years.

Surrender of SBI Life’s Saral Pension Plan

Surrender of SBI Life’s Saral Pension Plan depends on the type of premium payment plan chosen. In the case of single premium plans, you can surrender your policy anytime during the policy term. However, if you have opted for regular premium policies, you can surrender your policy only after completion of three years of having premium paid in full. Guaranteed surrender value is as mentioned below.

Policy year GSV as % of the basic premium paid
0-2 0%
3 30%
4-7 50%
8-15 60%
16-20 65%
20 year onwards 70%

Loan facility in SBI Life’s Saral Pension Plan

There is no loan facility available in SBI Life’s Saral Pension Plan

Conclusion

SBI Life’s Saral Pension plan is one of the best retirement policy that helps you live your life hassle free and maintain a current lifestyle even after you retire. With the protection offered, reliable bonuses and many flexible features, SBI Life’s Saral Pension plan helps you plan for prosperous post-retirement life.


FAQs

You need to pay the premium for the chosen policy term. On vesting, the sum assured + vested simple reversionary bonuses + terminal bonus, if any is considered as vesting proceeds. These proceeds can be used immediately to purchase an annuity to receive the monthly pension benefits. Or else, you can defer the annuity purchase to a later date. Depending on the income tax rule, you can commute part of your proceeds while investing in an annuity.

In case of death during the policy term, death benefits defined in the plan are payable to the nominee.


Yes. You can revive your discontinued policy within two years from the date of discontinuance. Once the company decides to revive depending on its underwriting terms and requirements, you need to pay all the unpaid premiums with interest.


Terminal bonus is kind of loyalty benefit that is paid only once at the end of the policy maturity for all the in-force policies. This is basically a bonus paid for maintaining the policy till the end. Value of terminal bonus is non-guaranteed which will be declared only at the end of the policy maturity.