Last week, SBI Life Insurance has launched Saral Sanchay which is basically a insurance and Savings Plan. Brochure indicates that “Guaranteed Minimum Interest Rate”. Don’t get tempted with such captions & headings. It is non-linked and non participating insurance and savings plan. In this article, I would review SBI Life Saral Sanchay Insurance Plan, its features, positive factors and hidden factors. Should you opt for SBI Life Saral Sanchay Insurance Plan?
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Features of SBI Life Saral Sanchay Insurance Plan
- It is basically life Insurance and investment plan.
- It is non-linked and non-participating life insurance plan.
- Guaranteed Minimum Interest rate (GMIR) of 1% would be paid through out the policy term.
- An Additional Interest Rate (AIR) of 4% would be paid for first 5 years of the policy term. From 6th year onwards, AIR would be 0.5% till the end of the policy term.
- Minimum age of entry is 18 years and maximum age of entry is 60 years.
- Policy term is 10 to 15 years.
- Partial withdrawals can be done from 6th year in case of any emergency.
- You have the flexibility to choose the premium you wish to pay. The Sum Assured will be a multiple of the premium chosen by you, depending upon your age at entry.
- The premiums collected from you will be credited to your Individual Policy Account (IPA) after deducting the applicable premium allocation charge. The Individual Policy Account (IPA) is an individual account maintained by them for every policy under the plan.
- Mortality charges would be recovered from your IPA and would be deducted at the beginning of every policy month.
- Further, all partial withdrawals made by you will also be deducted from your IPA.
Who can purchase SBI Life Saral Sanchay Life Insurance Plan?
Any individual between 18 – 60 years of age can purchase this plan. This plan can be purchased only from an authorized Common Service Centre under the National e-Governance Plan (NeGP) of Government of India. The policy will be issued based on the information provided on your Aadhar card and other enrolment details.
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Benefits of SBI Life Saral Sanchay Insurance Plan
a) Death Benefit
If life insured dies before the maturity date, highest of the following would be paid as death benefit.
- Sum Assured or
- 105% of premiums + top-up premiums paid or
- Balance in your IPA
b) Maturity benefits
If policy holder survives, highest of the following would be paid.
- Total premiums paid including top-up premiums paid till the date of maturity compounded at 1.00% p.a. less partial withdrawals made, if any or
- Balance in IPA as on date of maturity.
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What are the charges under this plan?
- Premium Allocation charge: SBI Life would deduct a premium allocation charge of 20% of premiums paid by you for 1st year. No Further premium allocation charges would be deducted from 2nd year onwards.
- Mortality charge :A mortality charge on the Sum at Risk will be deducted at the beginning of each policy month from your IPA.
- Any taxes and cess on your premiums.
- No other charges are applicable under this plan.
What does SBI Life Management say about this Insurance Plan?
During this product launch, Mr Arijit Basu, MD and CEO, SBI Life said,
“We have launched ‘SBI Life – CSC Saral Sanchay’ which is aimed at the people who are largely uninsured. With this offering we are trying to give these families a relief by securing the life of their bread earner and help them save to achieve their goals in the near future.”
Should you invest in SBI Life Saral Sanchay Insurance Plan?
SBI Life Saral Sanchay has several hidden factors.
- It says “Guaranteed Minimum Interest Rate”. Interest rate of 5% for first 5 years and 1.5% from 6th year would be paid on balance amount which is very very less.
- Premium allocation charges of 20% would be deducted for first year.
- Its max sum assured is Rs 2 Lakhs only. In current scenario, this is very less amount.
- Zero liquidity within 5 years.
- This is like any other insurance and savings plan where life insurance companies are floating such policies to eat away your hard earned money.
- Just go for simple term plan, invest balance in a safe bank FD which would fetch you 8% guaranteed returns. If you can take risk, invest balance in best performing diversified mutual fund schemes where you can get 12% to 15% annualized returns.
More info can be read at the SBI Life’s Saral Sanchay Brochure
Readers, what is your view on this new SBI Life Saral Sanchay Insurance Plan?
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SBI Life Saral Sanchay – Insurance and savings plan – Review
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Can you please review HDFC Life Sanchay plan for the benefit of larger audiance….
Have you reviewed HDFC LIFE SUPER INCOME PLAN where you pay premiums for first 8 years and get back yly some amount in next 8 years and finally some bonus etc. if any. They also use such terms like Guaranteed Income Benefit and show some figures like 12.5% etc. which creates misleading impression.