Is SBI Life Smart Shield Term Insurance Plan Good?

SBI Smart Shield Term Insurance Plan

One of the best SBI Term insurance plan is Smart Shield Term insurance plan. This is a pure term insurance plan which has several riders, benefits and one can chose based on individual requirement. SBI Life has a claim settlement ratio of 94%+ in last 2 years. It ranks among the top 3 private insurance companies in terms of high settlement ratio. It is ranked as no. 1 in terms of collection of premiums for new insurance policies. How good is this SBI Term Insurance plan Smart Shield? This review and analysis is based on request from Swapna Katari on Suggest a topic. This topic was covered at summary level under Best Term insurance plans in India article which we published earlier. However, we are covering now, in detail with complete analysis.

Main Features of SBI Life Smart Shield Term Insurance Plan


  • This is one of the best term insurance plans in India (Offline)
  • It rewards to you, if you maintain a healthy lifestyle (Non smoker)
  • Term insurance plan available in 4 different options
  • Rebate on large sum assured
  • Comes with critical illness rider benefits

Also Read: What are the best term insurance plans in India?

Other Features of SBI Life Smart Shield Term Insurance Plan


  • Minimum age of entry: 8 years
  • Maximum age entry: 60 years
  • Maximum age at maturity: 65 years
  • Minimum maturity sum assured: Rs 25 Lakhs and multiples of Rs 1 Lakh thereof
  • Maximum Sum Assured: No limit
  • Policy term: 5 to 30 years
  • Premium: Single premium and regular premiums. For regular premiums, they are payable monthly, quarterly, half-yearly and yearly except for Decreasing term assurance options.

What are various plan options available?


a) Level Term Assurance option: This is a simple term insurance option where nominee gets sum assured in case of death of the insured person.

b) Increased term assurance option (5% p.a.): This provides increased sum assured amount year on year. This is a good option to choose in case you want your family to consider inflation and live high standard of living.

c) Decreased term assurance (Loan Protection): This option is for individuals who have a home loan or  car loan and want to take high  protection now and want to decrease term assurance once this is paid off. This option is not available for others.

d) Decreased Term Assurance (Family income protection): This is another unique option where the sum assured would be reduced during the policy term and during the death of insured, the nominee would get either regular monthly payments or can opt for lump sum payment which is available for distribution based on decreased term assurance policy.

Your premiums would get reduced year on year in decreased term assurance options.

Illustration of premium amount


Considering a non-smoker who is opting for Rs 50 Lakhs Sum assured for a 25 year policy tenure.

  • Premium for 30 years individual would be approx Rs 9,000
  • Premium for 35 years individual would be approx Rs 13,000
  • Premium for 40 years individual would be approx Rs 18,500

What are the benefits?


1) Death Benefit: In case of unfortunate death of insured, his/her nominee would get sum assured as per policy document and as per the option chosen.

2) Maturity Benefit: Since this is a pure term insurance plan, there is no maturity benefit available

3) Other benefits:

  • Accelerated Critical Illness Benefit: For level term assurance and increased term assurance options, you can enhance sum assured by opting for accelerated critical illness benefit.
  • Accidental death benefit rider: You can opt for this rider and apart from the normal death benefit, the nominee would get accidental death benefit under this option
  • Accidental Total and permanent disability benefit rider: If you opt for this option, you may be charged with additional premiums, but in case of permanent disability due to accident sum assured would be.

4) Income tax benefits: Life Insurance premiums paid up to Rs. 1,00,000 are allowed as a deduction from the taxable income each year under section 80C of income tax act and the maturity amounts are tax free under section 10 (10) D subject to fulfillment of terms and conditions.

Also Read: Best Mediclaim Policies in India

Are there any special rebates on premiums?


Yes, SBI Smart Shield offers below rebates on premiums

Maturity amount               Rebate on premiums

Rs 50 Lakhs – Rs 1 Crore      7% of regular premium

Rs 1 Crore and above          7% of regular premium + Rs 25 for every 1 lakh of sum assured

Is there any Loan facility?


Since there is no surrender value for this policy (if surrendered during a year, you would get a partial premium for that year), there would not be any loan facility.

SBI Life Smart shield brochure can be downloaded here

Conclusion: There are several good features of SBI Smart Shield Term insurance plan. If you pay additional premiums, you would get riders and additional benefits. SBI Life has a high settlement ratio. Considering all these features, you can opt for such term insurance plan. Alternatively, you can review, ICICI Life term insurance plan and HDFC Life Term insurance plan to which have high settlement ratios.

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Suresh
SBI Life Smart Shield Term Insurance Plan

The Author

Suresh KP

Suresh KP i.e. me have written 1,800+ articles on this blog. I have done by B.Com from Osmania University and then MBA-Finance from Symbiosis University, Pune. I have over 20 years of experience in analyzing various investment options and money saving ideas. I love doing financial planning, Mutual Fund Analysis, Searching long term Stocks for wealth creation, IPOs, reviewing Insurance Products, analysing Health insurance Plans etc.

36 Comments

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  1. Hi Suresh,

    I am 30years old. I have taken 10 lac Jeevan Anand from LIC and planning to purchase Term insurance of 50 lacs  from Bharti-AXA (Premium:4486 INR) and 50 lacs from LIC(9963 INR). Please suggest I am right or Shall I go for 1 lac from LIC only or 50 LIC & 50-HDFC?

    Also, my wife is housewife so which and how much term insurance should I take for her as per rules.

    Thanks.

     

    1. Hi Kishore, Consider taking SBI Smart shield term insurance or ICICI Term insurance plan or HDFC click2 protect term insurance plan. Recently LIC has introduced LIC online term insurance plan which you can consider. Regd your wife, I generally indicate that one should consider life insurance for earning member as loss of such person would have financial impact on the family life. If you still want to take, you can consider taking 10-12 years of your family annual income.

  2. Suresh,

    Noob question,  In term plans, do they cover all types of deaths like accidet, criminal,medical et

    1. Hi Shiv Anand, Yes they cover everything except for suicide. Even this some of the plans are covering after 1 year period. You should check that.

  3. Hai,

    Very nice information.

    1. I have a doubt, Can NRI opt for Term insurance plans? Any point to be noted?
    2. Any Point to be noted when opting for riders?

    Thanks in advance

    1. Hi Ganesh, It depends on insurance companies. Some of them are allowing term plans for NRI’s too.  Regd riders, you should consider critical illness riders if possible

  4. Dear suresh, Earlier you have written that irda prohibited the riders in term plans.But sbi smartshield and kotak insurance are
    still giving riders.Is it allowed?
    With regards
    Dr.p.sudhakar

    1. Hi Dr. Sudhakar, For online insurance policies, there are no riders. However for offline policies, the riders are still allowed

  5. Dear Suresh,

    I thank you for providing comprehensive clarity on TOP 10 Mutual Funds 2014.

    I like to know to add to that how about ‘HDFC Life Pro Growth Plus Plan’?

    Will be glad if you can provide some clarity on that in terms of investment & wealth creation. Please also provide your inputs on Income Fund in this plan.

    Thanks.

    Regards,

    Anand Sagar

    1. Hi Anand, This is ULIP plan. You should stay away from such ULIP’s. Please consider term plan and balance invest in mutual funds or post office RD schemes.

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