SBI Life eShield Next Term Plan – Features, Benefits and Review
SBI Life has launched a new term insurance plan – ‘SBI Life eShield Next’. This is a pure risk protection plan. SBI Life had eShield term plan earlier. It has enhanced this plan and brought the new term plan now. What are the key features of SBI Life eShield Next? What are various benefits in SBI Life eShield Next Term plan? Should you opt for SBI Life eShield Next Term Insurance Plan?
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Key Features of SBI Life eShield Next
Simple Term Plan: This is an individual, non-linked, non-participating life insurance pure risk protection plan. This is not linked to market. Since this is term insurance plan, it comes with low premiums compared to other life insurance cum investment products.
Choice of 3 Plan options: It comes with 3 plan options. Level Cover, Increasing Cover and Level Cover with future proofing benefit.
Customization of the Policy: One can customize the plan to choose the death benefit mode (get lumpsum or get monthly payments). This plan can be customized with better half benefit option.
Whole Life Coverage: It comes with whole life option (100 years coverage) or other than whole life (85 years coverage).
Terminal illness benefit: This benefit is available under all the options of the plan.
Flexibility on premium payments: One can choose option to pay for limited premium payment or single premium or regular premium.
Additional Riders: Two additional riders can be opted, however comes with additional premium.
What are the eligibility criteria to take SBI Life eShield Next?
What is absolute amount assured to be paid on death?
Since death benefit is paid based on ‘absolute amount assured to be paid on death’, let us understand how this amount is computed first.
What are various plan options in SBI Life eShield Next Term Plan?
It comes with 3 different plans.
1) Level Cover Benefit – Under this plan, the absolute sum assured on death would remain same through the policy term.
2) Increasing Level Benefit – Under this plan, the absolute sum assured on death would increase 10% (simple) at the end of every 5th policy year. The maximum increase would be 100% of basic sum assured.
3) Level Cover with Future Proofing Benefit: Under this plan, life insured would have an option to increase basic sum assured on attaining certain life stages like marriage, child birth, purchase of house etc. Below are various life stages where life insured can increase basic sum assured.
What are various benefits in SBI Life eShield Next?
Benefits under this term plan would vary based on the plan chosen.
1) Death Benefit
In case of unforeseen death of the life insured, “sum assured on death” would be paid. This is computed as follows:
a) Regular and limited premium plans – Higher of the following would be paid
i) 10 times of annualized premiums or
ii) Absolute amount assured to be paid on death or
iii) 105% of premiums paid up to the date of death.
b) Single Premium Plans – Higher of the following would be paid:
i) 1.25 times of single premium or
ii) Absolute amount assured to be paid on death
2) Terminal Illness Benefit
In case life insured is diagnosed with any terminal illness during the policy term before 80 years of age, benefit equal to sum assured on death is paid with a maximum cap of Rs 2 Crores. This benefit is paid either in lumpsum or monthly installments or lumpsum plus monthly installments.
3) Maturity Benefit
Since this is pure term insurance plan, there is no maturity benefit.
4) Surrender Benefit
Regular Premium – There is no surrender benefit available.
Single Premium – The policy can be surrendered anytime during the policy term. The surrender value is 70% of the single premium paid.
Limited Premium Plan – Surrender benefit is payable if first 2 consecutive years of premium is paid. The surrender value would be 30% after 2 years, 40% after 3 years, 50% after 4 years and till end of the premium payment term. It would be 70% for the rest of the policy term.
5) Income Tax Benefits
Amounts paid under this term plan is eligible for income tax benefit u/s 80c of income tax act.
How does SBI Life eShield Next Work?
This example is taken from policy brochure.
1) Mr. Karan Mehta, 30 years opts for “Level Cover with Future Proofing Benefit” – 20 years plan with 1 Crore sum assured.
2) Mr. Karan gets married after 2 years and would put the request to SBI Life for increase of basic sum assured to Rs 1.5 Crores and is accepted.
3) After 3 years, Mr. & Mrs. Mehta are blessed with a child. Mr. Mehta wants to opt for increase sum assured and puts request to SBI Life for Rs 1.75 Crore sum assured and it is accepted.
Why to consider SBI Life eShield Next – Term Plan?
Here are some major factors to consider this term plan.
1) This is pure risk protection plan that comes with low premiums. Pure protection plans provide sum assured in case of unfortunate death of life insured.
2) It comes with 3 options. One can opt for simple basic sum assured or increasing sum assured or increase sum assured at attaining certain life changes.
3) Terminal illness benefit in this plan helps life insured to get sum assured in case diagnosed for any terminal illnesses.
4) SBI Life eShield premium payment can be done in 3 ways. It could be regular premium, single premium or limited premium payment.
5) There are two riders available in this plan i.e., Accidental death benefit rider and accidental total & permanent disability benefit riders. One can consider them if required.
6) This plan comes with better half benefit where the risk coverage of spouse would start from the date of the death of the life insured.
7) SBI Life staff and their family members would get discount on the premium which would range between 2.5% to 7.5% depending on the option chosen.
8) If the plan is purchased through online, one would get 1.5% to 3% discount on premiums depending on the plan and premium payment term option chosen.
7) Premiums paid under this policy are eligible for income tax benefit u/s 80c of IT act.
Why not to consider such term plans?
Here are few negative reasons.
1) Better half benefit would not be paid in case of death of the spouse occurs along with the life insured in the same incident.
2) In case life insured want to surrender the policy for limited premium payment term or single premium payment plan, the surrender value is low.
3) Two riders are offered, however these come with additional premiums.
4) No loans are offered under this plan (even for single premium or limited premium payment term plans).
5) In case of death of the life insured due to suicide within 1 year, sum assured would not be paid. Only 80% of the premiums would be paid.
SBI Life eShield Next – Sample Premiums
SBI Life eShield Next 1 Crore Term plan Premium calculator would be as follows:
Should you opt for SBI Life eShield Next?
SBI Life eShield Next is a risk protection life insurance plan. It comes with comprehensive features with 3 different options. Level Cover plan is simple term plan that comes with low premiums. If you opt for other two options, the premium increases. I could see the premiums are in similar range on term insurance plans offered by other life insurance companies. The latest claim settlement ratio published in 2021 for SBI Life is 94.5%. Considering these factors, one can opt for such term plans.
Source: SBI Life eShield Policy Document
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