SBI Life – Smart Scholar

SBI Life Insurance Company, established in the year 2001 is an amalgamation of two globally well-known banking and financial services companies State Bank of India and BNP Paribas Cardif. SBI Life Insurance Company offers a diverse range of customisable insurance and investment products for both individual and group segment. With its wide network, channels, new age products and competitive prices, SBI Life Insurance Company has emerged as one of the best life insurance company in the country.

What are Unit Linked Insurance Plans?

Unit-linked insurance plans are the hybrid products offered by the life insurance companies that provide the dual benefit of insurance and investment. In ULIP, when you pay a premium, part of it goes towards buying life cover and the remaining part of the premium will be invested in various capital market instruments like equity and debt through fund options available. ULIPs are the long-term investment products that come with a five year lock-in period. ULIP investments help you build a corpus for your long-term goals such as children education, wedding, family vacation and for your retirement life etc.

SBI Life’s Smart Scholar

SBI Life’s Smart Scholar is a non-participating unit linked insurance plan that is specifically crafted for securing your child’s future. This plan helps you gain from the financial market and build a corpus to secure your child’s future dreams. Along with the insurance, financial protection is also provided by securing your child against any uncertainties. SBI Life’s Smart Scholar plan has multiple features to offer in order to get the maximum benefits out of it over the long-term.

Features of SBI Life’s Smart Scholar

    1. Twin benefit of insurance + market-linked returns on investment
    2. Dual protection when you are not around – sum assured + Payor and waiver of future premiums in an unfortunate event
    3. In-built accidental death benefit + accidental total and permanent disability benefit
    4. Seven different fund option to maximize your savings
    5. Regular loyalty additions to boost your fund value

Benefits of SBI Life’s Smart Scholar

  • Flexibility: The plan offers flexibility through various features, such as :
    • You can switch from one fund option to another based on your changing investment needs.
    • Premium redirection can be done from 2nd policy year onwards
  • Reliability: On completion of a specific duration, regular loyalty additions will be added to the policy by way of free allocation of units.
  • Liquidity: The policy allows partial withdrawal from 6th year onwards to meet your urgent and unexpected financial needs. Maximum two partial withdrawals can be made in a policy year. Up to 15% of the fund value can be withdrawn.
  • Security: Investing in this plan ensure your child’s dreams are met even when you are not around. In case of the untimely death of the life assured, below benefits are payable :
    • Sum assured or 105% of the total premiums paid, whichever is higher
    • The policy will be continued with all the future premiums waived off and paid on your behalf by the SBI life insurance company.
    • An additional benefit of accidental benefit sum assured (if the death is due to an accident). Please note this option is not available for single premium policies.
  • Maturity benefit: On completion of the policy term, the fund value of the policy will be paid as maturity benefit to the policyholder (if he or she survives) or to the child. Settlement option can also be chosen to receive the lump sum benefits in periodic instalments.
  • In-built additional benefits: Accidental benefits which include accidental death and accidental total and permanent disability benefit will be paid if the event occurs during the term. The benefit will be equal to the base sum assured subject to the maximum limit of Rs. 50 lakhs.
  • Tax benefit: Tax deduction/exemptions can be claimed for the premium paid and benefits received under Section 80C and Section 10 (10D) of the Income Tax Act, 1961 respectively.

Eligibility Criteria for SBI Life’s Smart Scholar

Eligibility conditions Minimum Maximum
Entry age
For life assured
For child

18 years
0 years

55 years
17 years
Maturity age
For life assured
For child
-
18 years

65 years
25 years
Policy Term 10 years/15 years/20 years
Plan type Single premium/limited premium
Premium payment frequency Single/Yearly/Half-yearly/Quarterly/Monthly
Premium paying term for Limited premium policies
5 years

25 years

Premium range depending on the plan type and premium payment frequency

Plan type Premium paying frequency Premium range (in multiples of Rs. 100)
Minimum Maximum
Single Single Rs. 75,000
Yearly Rs. 24,000
PPT or Premium Paying Term ≥ 8 years Half-yearly Rs. 16,000
Quarterly Rs. 10,000
Monthly Rs. 4,000
Yearly Rs. 50,000 No Limit
PPT or Premium Paying Term is 5 to 7 years Half-yearly Rs. 25,000
Quarterly Rs. 12,500
Monthly Rs. 4,500

Sum assured range depending on plan type and age of the policyholder

Plan type Age at entry Sum assured range
Minimum Maximum
Limited premium policies Age < 45 years Higher of (10 * annualized premium) or (0.50*term* annualized premium) 20 * annualized premium
Age < 45 years Higher of (10 * annualized premium) or (0.50*term* annualized premium)
Single premium policies Age < 45 years 1.25 * single premium 5 * single premium
Age < 45 years 1.25 * single premium 1.25 * single premium

For example, let’s say you are 35-year-old investing in SBI Life’s Smart Scholar plan for your 5-year-old daughter. You are opting for 15 years term with Rs. 50,000 annual premium. You have an option to choose the sum assured multiplier factor from 10 to 20. Let’s, say you choose 20, then your sum assured will be 20*50,000 = Rs. 10, 00,000.

Fund options available for investment in SBI Life’s Smart Scholar plan :

Below are the fund options available for investment

Fund options Asset allocation (in %) Risk profile
Equity and equity related instruments Money market instruments and cash Debt instruments
Equity Fund 80%-100% 0%-20% 0%-20% High
Top 300 fund 60%-100% 0%-40% - High
Balanced fund 40% -60% 0%-40% 20%-60% Medium
Bond fund - 0%-40% 60%-100% Medium
Equity optimiser fund 60%-100% 0%-40% 0%-40% High
Growth fund 40%-90% 0%-40% 10%-60% Medium to high
Money Market fund - 80%-100% 0%-20% Low

Who should buy SBI Life’s Smart Scholar plan?

SBI Life’s smart scholar plan is an ideal option for every individual investor seeking market-linked investment options to secure their child’s future, especially for their educational needs against all the uncertainties. It’s also a great option for parents looking for plans with one-time investment or limited investment period.

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

SBI life’s Smart Scholar plan can be purchased any time before your child attains 17 years of age. However, starting investment planning for your children as soon as they are born is the wisest thing to do. As SBI Life’s Smart Scholar plan gives returns driven by the market, investing early can help you maximise the return by taking benefit of many market cycles.

Documents required for buying SBI Life’s Smart Scholar plan

  • ID proof: PAN card/Aadhaar card/Passport/Voter’s ID card, etc.
  • Address proof: Driving license/Bank account statement/utility bill/Aadhaar card, etc.
  • Income proof: Salary slips/employer certificate/ Income Tax return, etc.
  • Age proof: PAN Card/Birth certificate/school certificate/Passport, etc.

Discontinuance of premium in SBI Life’s Smart Scholar plan

If you discontinue the premium payment, you can revive the policy or completely withdraw it or convert the policy into paid-up policy. There are two scenarios to this.

  1. Discontinuance of premium within the first five years of policy
    1. Fund value as on date will be disinvested and transferred to ‘discontinued policy fund’ which invests in money market instruments and government securities.
    2. The policy can be revived within two years from the date of discontinuance.
    3. If revival is not done, the discontinued policy fund value will be paid out on the 1st business day of the 6th policy year.
  2. Discontinuance of premium after five years of policy
    1. The policy can be revived within two years. If revival is not done, the policy is converted into paid-up value status and the fund value will be paid out on the date of maturity.

Surrender of SBI Life’s Smart Scholar plan

You can surrender your policy anytime during the policy term. However, as the plan has five years lock-in period, certain conditions will be applied.

  • If you surrender your policy before completion of 5 years: Your fund value will be transferred to ‘discontinued policy fund’ which will earn minimum interest of 4% p.a. All the other benefits will cease. However, the surrender value in discontinued policy fund will be paid to you on completion of 5 years of the policy. Fund management charges will be deducted until then.
  • If you surrender your policy after 5 years of policy: Surrender benefits i.e. fund value

Loan facility in SBI Life’s Smart Scholar plan

SBI Life’s Smart Scholar plan offers no loan facility

Exclusions in SBI Life’s Smart Scholar plan

If the life assured commits suicide within the first year of commencement of policy or from the date of policy revival, the policy shall be null and void. Only fund value as on date of death intimation is paid to the beneficiary.

Conclusion

SBI Life’s Smart Scholar plan is a comprehensive investment option available to secure your child’s future against all the uncertainties of life. With various fund option to invest, flexible features and liquidity option, SBI Life’s Smart Scholar is a competent plan available for children’s educational needs.


FAQs

Premium redirection in SBI Life’s Smart Scholar plan is an option to change the funds for investing your renewal premiums.


Loyalty additions are the free fund units given for all the in-force policies on completion of specific duration as an additional benefit for staying invested for a longer period. Loyalty additions depend on the term of the policy chosen. Loyalty addition is usually a certain percentage of average fund value for a specific duration. In SBI Life’s Smart Scholar plan it is equivalent 1% of average fund value for the last 24 months prior to payment at the end of the specific policy year.