With the launch of Smart ULIP, now SBI Life Insurance too has joined the bandwagon of ULIP market. Similar players in the market include LIC jeevan Varsha, ICICI Return Guarantee Fund, IDBI Fortis Bondsurance and Birla Sun Life Platinum Plus. You can read my take on those policies by following the links mentioned for each of those. Now, here is a quick review of SBI life Smart ULIP.
As usual, first the good things about this product:
- The Smart ULIP product provides NAV guarantee that is the highest of 168 fortnightly NAVs during first seven years or NAV at maturity, whichever is higher.
- In case of the unfortunate event of the death of the insured during the policy term, the nominee receives the higher of fund value or sum assured.
- Shorter premium paying term (3 or 5 years).
- Tax benefit on both premiums [U/s 80C] and maturity amounts[U/s 10(10D)]
- Investment is managed by SBI Life – policy holder need not panic in volatile market
Now the bad:
- Short term – just 10 years!
- Too many charges
- Premium allocation charges : 15% in 1st yr, 5% for next 2-4 yrs for 3-5 yrs terms respectively.
- Admin charges – Rs 60/- per month for full term.
- For first three years, annual administration charges of Rs 5 per 1000 of sum assured.
- Fund management charge 1.5% pa. Fund management charge can be increased to 2.5% pa
- Mortality charge levied on 1st day of each policy month.
For more details on this product check the brochure and see the benefit illustration on their site.
Verdict:
This product may appear to be better than other ulip products in the market but not better than a combination of mutual funds with term insurance. I still suggest you folks not to combine insurance with investment. Invest of specific products for each purpose and reap the best benefits from each of those. I know many of you may not agree with me, again it boils down to individual requirement and the phase at which an individual looks at these products. Whatever the case may be, I welcome your comments and suggestions.
John C says
Okey let me wait and see the result after 3 years
Sundaram says
Hi all,
I am with SBI Life and i just want to clarify the nuances of insurance and investment. First of all, insurance is for the sake of love we extend to our family and to the tune of our liabilities whereas investment is to make grow our investment with adequate safety. Everyone knows what happened to our mutual fund and equity market last year and how many were wiped out. Your investment should be in safe hands and you must get back your investment with assurance at the end of the term.
SBI was known to born child which doesn’t know how to write or read. Its trust runs to 205 years of indian economy. Our country grown with two majors who outscored everybody in their fields. 1. SBI 2. LIC.
Now SBI is matching its performance with insurance major LIC and really performing well with ULIP products. SBILife’s cost is less compared with any insurer and we are very transparent. every quality product owes a cost and why your head on cost? It is controlled by IRDA and what you are investing is Rs.1.5 lakhs which will be roughly Rs.6 lakhs at the end of 10 years assuming you bought 6000 units in 3 years and its highest NAV will be Rs.100 in 7 years. Your Maturity is guaranteed. What else you want from your investment along with risk cover.
Cheers.
Sundaram.
Dr.Girish Metha says
Excellent I am also SBI Life advisor and we must keep visiting blogs
vikas says
hi,
I have invested 80,000/- PY on smart ulip when it was launched in Mar 2009 for 3 yrs term. what would be the return to me considering the highest value nav being 15.4 last year for the same.
pls inform how to cal the returns for these.
thanks
Jignesh says
Insurance companies are fooling people using term highest NAV. Remember it is not pure equity product. This wil be pure debt product at the end of the tenure and will achieve highest NAV at the end of the tenure.
It means it will give reasonable debt returns, not equity returns.
sowmini says
Dear mohan
great work by you.I am looking out to invest Rs.1 lakh for tax benefit this financial year.I do not have such a great knowledge about Mutual funds or insurance.I was looking upom SBI smart ULIP,but for the charges i guess its not so good.Could you please suggest me as to what are the other avenues where we can invest and gain good returns.
thanks
sowmini
Ashwin Gomatam says
Dear All,
Unit Linked Insurance Plans ( ULIPs) are part of some of the biggest con job/ripp-off/conspiracy in the Indian Financial Services industry. You straight away lose 15 to 20% of your investment returns from day one due to high administration/servicing charges. But ULIPs are still successful solely because its beneficial to the insurance company and the insurance agent. Every agent is aware of this fact but he has to sell it because its his/her bread and butter.
So, if anyone wants to invest plus get insurance cover, i strongly suggest that the best option is to buy any insurance company’s plain vanilla Endownment or Term Insurance Plan in order to mitigate your life risk and then separately invest in a good diversified equity
Mutual Fund which has historically( over 1,3 and 5 years) given good returns. !
srinivasu says
true.
wellsaid, as long as promoters, distributors,sales dept. , get their very high salaries plus incentives these very highly front loaded ULIPS are promoted by using all sort of false propogonda.
stay away from ulips take TERM plan which is very simple to understand with low premiums.
thanks
srinivasu says
sir,
wellsaid !
keep the good work gooing.
thanks for this service.
Pallav Desai says
Hi mohan & all,
Great work of ulip done.this is the time of advertisement,everyone come with sugar coated talks but in real sense,very few people says truth. Thanks for preventing me from falls investment.
now give me few hints for good mutual funds who can give better return from bank fd of 5 years with moderate risk.
Pallav
vicky says
SBI Life SMART ULIP a nightmare of charges
Dear Friends,
PLease dnt get caught with the catchy line of SMART ULIP from SBI, please see the Benefit Illustration.
Just to give you a snapshot considering we go for a 50000 premium 5 year plan for a male of 30 years and you will realise that u spend a whopping 11.5% only against charges such as Policy Administration, premium allocation, sum assured and mortality other than the fund management charge (which is also quite high aprroximately 11.5 % again at a conservative interest rate of 6%) so u actually end up spending 55000 – 57000 only against charges in your 10 year term.
Now for all those investors who want to invest or have invested for the purposes of getting tax free returns by 10(10 D), u have already lost aprrox 22% into charges in your ten year term and your yield thereby decreases….suggest to put directly into Top performing Mutual funds and in Ten years you will get much better yields for the same investment even after 30% tax incase you have to pay over your returns.
Mohammad says
Hey, Thanks for your advise & analysis on the SBI ULIPS plan . I think that’s beneficiary for all.
Mohammad says
Hey, Thanks for your advise & analysis on the SBI ULIPS plan . I think that’s beneficiary for all.
pallaka says
Hi,
Am thinking of doing investment with SBI ULIP plan. Can you please let me know what are cons if we surrender after 5 years & benefits till if we keep till maturity (10 years).
purna says
Dear All,
I want to insvest 1.5lac for max 10 year interms of Fixed deposite or in insurance like SBI ULIP.Kindly suggest me which will be better for me.
Ratnesh says
Hi All
I think in all aspect SBI LIFE smart ulip is better than all other ulip plan in the market because it is a part of SBI Bank and SBI is a Government Bank. So in compare to private competitor it is better than all. If U see the NAV of SBI smart ulip from start date to till date it is giving 40% returns but in Birla or other return is 5% to 10%.
Shibu says
Hi Mohan,
Thanks for the sugessions, I would like to invest in smart ulip, in this regard my question is how much is the expected return at the end of seven years with an investment of Rs. 1.5 lac through three years. Please mention the higher as well as lower side.
Ratnesh says
Hi
You will get atleast maximum of 8 lakh and minimum of 5laks. So if U want to invest in SBI smart ulip U can invest without any hesitation.
Arafath Saleem says
Hello Mohan,
Am thinking of doing investment with SBI ULIP plan. Can you please let me know whether this is the fruitful plan ? How much is the expected returns of this plan at the 7th year?
Also, can you please gimme an idea about the other investment plans which will be useful for constructing our house?
Thanks in advance,
Nisha
Arafath Saleem says
Hello Mohan,
Am thinking of doing investment with SBI ULIP plan. Can you please let me know whether this is the fruitful plan ? How much is the expected returns of this plan at the 7th year?
Also, can you please gimme an idea about the other investment plans which will be useful for constructing our house?
Thanks in advance,
Nisha
soneeka says
Hello.
Thanks for the details on all the policies. Considering that insurance & investment should not be linked, can you suggest a good investment option for a period of 15 yrs -20 yrs where one can generate money for child’s education
Thanking you in anticipation.
RRK says
Best is PPF, to get advantage of compounding interest suggested to invest Max at the yearly years.
if you put a little effort, post office MIS is one of the best which gives 10.5% at end of 6years.
Venkat Vinoth says
Can you please clarify your comments with figures, if possible…
Really this would mean a lot to me
Jothi says
Hi Soneeka
Thanks a lot for your comment.I have a better idea of an option in suggesting you a good investment option for a period of 15 yrs – 20 yrs where one can generate money for child’s education.That is the only insurance in India which gives you more in return.RELIANCE INVESTMENT PLAN.
Elaya Kumar S says
Dear Mohan,
It is the buyer’s market condition and competitive market environment that forces SBI Smart ULIP and bajajallianceigain to come with full details.
But I still stick to my opinion that there is no necessity for combining insurance with savings. If you want insurance cover go straight away for a term assurance policy. For Savings choose other routes like, PPF, Mutual Funds and Company fixed deposits. This linking up savings with insurance cover does not give any real benefit except the benefit of better business for insurance companies.
Elaya Kumar S
Elaya Kumar S says
Dear Mohan,
It is the buyer’s market condition and competitive market environment that forces SBI Smart ULIP and bajajallianceigain to come with full details.
But I still stick to my opinion that there is no necessity for combining insurance with savings. If you want insurance cover go straight away for a term assurance policy. For Savings choose other routes like, PPF, Mutual Funds and Company fixed deposits. This linking up savings with insurance cover does not give any real benefit except the benefit of better business for insurance companies.
Elaya Kumar S
Mohan says
That is a very reasonable opinion and I agree completely with that 🙂
Venkat Vinoth says
Hi Mohan and sandeep Garg.
First let me thank you for the detailed survey of the plan. Being a new investor, these details are quite valuable for me. I agree on the fact that, we need to take some time to plan our future to select right Insurance scheme for insurance alone plus the right investment plan for right saving. We should not mix them up.
Now can u ppl let me know better Insurance term policies available and better MFs available or the blogs i can refer to..
I’m at the age of 24 in IT. So needed to put save money to rescue myself when needed. Also can anyone clarify me whether the money we deposit for Fixed deposit (not the return) is Tax explicable.
Thanks in Advance
Lalitha Reddy says
Mr. Venkat,
If u do fixed deposit with banks, u wl not get tax exemption.
Regards
Chandan says
Great! work Mohan. But, i think there is one benefit with ULIP that fund manager get more time to play with the money as all investment are long term, so there is high probability that money will grow more with ULIP.
i am also thinking of investing in ULIP, but I’m bit confused that i should go for ULIP or MF and insurance plan.
Mohan says
Chandan, you are right about the fund manager doing all the work for you. But remember it comes at the cost of various charges levied on you. Money does grow with ULIPs. My suggestion is don’t combine multiple things with one product. If you are looking at insurance go with term insurance that gives you very high risk coverage at a very low premium. For investment purpose, chose a plan that yields highest returns. That is the thumb rule I follow for my investments 🙂
Rajesh Kumar Singh says
1. If I invest for smart ulip then how much I expect after 10 years maturity with an investment of 1.5 lac in three years?
2. What is the other product compareable in the line of this product.
Rajesh Kumar Singh says
1. If I invest for smart ulip then how much I expect after 10 years maturity with an investment of 1.5 lac in three years?
2. What is the other product compareable in the line of this product.
Mohan says
Rajesh, only the agents can give you some projection based on some growth rate. There are many products. I have written reviews on
# Bajaj Allianz iGain ULIP
# BSLI Platinum Plus – review & analysis
# ICICI Return Guarantee Fund
You can take a look at them 🙂
suvarna says
Namaste sir,
I have a ulip account.
I want to know the details about my account.
How can I get information about my account through online?
please tell me.
divs says
Could you please do analysis of Kotak Dynamic Floor Fund?
divs says
Could you please do analysis of Kotak Dynamic Floor Fund?
s.sivakumar says
@sureshkumar
Anticipated Value of 6.71 Lakhs. At present the NAV is 13.77, which is guaranteed.
Srikanth Matrubai says
ULIPs are actually a con-job. They have too many hidden charges, non-transperant and little flexiblity for withdrawal.
Mutual Funds are a much better option. Even Mutual Funds nowadays offer Life Coverage.
Srikanth
Ankur Chawla says
SBI did a goof up on this one…when there employees contacted us to buy the polivy they said that return will start from 4th year onwards and the policy came stating that return will come only after 5th year completion i.e. in 6th year…so that is no good for me anymore…i ams tuck i want my money back as i feel cheated by SBI…and i donno how to do that…because they are not going to give it back that easily…SBI Sucks…they promise something and give something else…they are among the worst cheaters almost equitable to ICICI…
srinivasu says
true.
deepak kumar says
As said in SBI life smart ulip u can withdraw the returns even in the 4 th year but @ of 2% surrender charges.But the best part is the the NAV of SBI Life smart ulip with in one year has given 65% return i.e NAV as on jan-2010 is Rs:16.86 (guaranteed )against the issue price of Rs:10 per unit in jan2009 .
chitra says
hello mohan, thanks for the detailed info abt this Plan..But i would like to invest 50,000 this year for tax saving..This morning i talked to my agent and he told me abt this..I thought to invest in this plan..But after seeing these discussions..I have a backlog..So please suggest me in which i can invest with maximum profits..?
chitra says
hello mohan, thanks for the detailed info abt this Plan..But i would like to invest 50,000 this year for tax saving..This morning i talked to my agent and he told me abt this..I thought to invest in this plan..But after seeing these discussions..I have a backlog..So please suggest me in which i can invest with maximum profits..?
Lalitha Reddy says
Sir,
If u want to invest for tax purpose, i suggest you to go for LIC’s Market Plus-I with Bond or Balanced/Growth fund option with Single premium only. U wl get exemption as well as ur money will double in 5 years max. Think abt this. Regards.
Mohan says
@Ravi
I didn’t quite understand your statement. Could you elaborate on that please?
@Suresh
Please check their website for detailed calculations and deductions. If you get a chance to talk to their customer care, bring out such questions and get all your queries clarified.
sureshkumar says
Sir,
If I invest for smart ulip then how much I expect after 10 years maturity with an investment of 1.5 lac in three years? I want details.Please reply sir
sureshkumar says
Sir,
If I invest for smart ulip then how much I expect after 10 years maturity with an investment of 1.5 lac in three years? I want details.Please reply sir
RAVI says
Return is guarenteed. put 1.5 and get 2.5 min. guarentee. or more. so i did not understand why bother all charges etc. any one can get min. 2.5 or more if NAV is more while withdrawing.
do u guys agree with me?
RRK says
@Dear Ravi,
In SBI life website they have mentioned a calculation for 3years premium (total 1.5L), return @10% ROI will be 2.52L.
If you invest the same amount in Postoffice MIS and you can get around 3.0L @ 10yesrs.
RRK says
so, 50K more than sbi smart ulip
Mohan says
Hi all, most of you have been asking what would be the return after n number years if i invest x amount. To answer your question, there is no specific number that I can quote. Since it is a ULIP, it is subject to market variations. It completely depends on how the fund manager takes care of your investment. Please talk to the concerned agents and they will be able to give you approximations based on some numbers.
Rakesh kumar Singh says
Is it the correct time to invest in SBI ULIP plan?My agent didn’t tell me about all this charges, just i know that they will charge Rs. 4500/- for first year.not to combine insurence with investment, i didn’t get it ? In SBI smart ulip plan do we have this option ?
Rakesh kumar Singh says
Dear Sir,
My first question is: How much is the expected return at the end of seven years with an investment of Rs. 1.5 lac through three years. Please mention the higher as well as lower side.Can I withdraw this money after 3 years? as my agent told me that i can.
chandrakant says
my question is;how much is the expected return at the end of seven years with an investment of RS.1.5 lac through three years.
chandrakant says
@gaurav
chandrakant says
@gaurav
Manoj Khatri says
If I invest for smart ulip then how much I expect after 10 years maturity with an investment of 1.5 lac in three years? I want details.
Kalyan says
My first question is: How much is the expected return at the end of seven years with an investment of Rs. 1.5 lac through three years. Please mention the higher as well as lower side.
Second question is: What is the other product compareable in the line of this product.
harsh says
extraordinary work….liked it much ….thank you…
nidhi ajmani says
If we go for smart ulip then how much i can expect at the end of 7th year with this plan ..Please be true to with the facts … you can suggest us the approx amount …..
gaurav says
how much i can expect at the end of 7th year with this plan ..Please be true to with the facts …
Ashutosh says
I m currently working with SBI Life and
Unit Values for SBI Life – Smart ULIP Plan options as on 11/04/2009
Fund Name Unit Value (Rs. / unit)
FlexiProtect Fund 11.39
Money Market Fund 12.33
pushpa says
@Chirantan
Please reply sir
pushpa says
sir, i am planning to invest 1.5 lakhs ( 3yrs). how much i can expect at the end of 7th year. pls inform present nav of smart u lip
deepak says
I Would Like to Make One Thing Very Clear That in This Plan the Returns Are Gong to Be the Maximum. I Hope if U Pay for 3 Tearms
I Expect That U Will Get a Approximate Value of Rs 6,00,000/-.
Furthet if U Have Any Query U Could Get in Contact With Me.
Thank
Happy Investing.
Bairam Sunil Kumar says
Hi Deepak,
I am a policy holder of Ulip, I have paid my 2 premiums already, my amount is 50K per premium, I came to know about the charges only when I got the policy in my hand, when i have calculated then the agent said that these charges will be recovered when your amount matures, I don’t understand why these agents will not make clear before investing.
Secondly, I would like to know I can stop paying after the 3rd premium, if so when I can get the money back to me, total amount paid will be 1,50,000 altogether, what is the expected amount approx.
Kindly let me know
Sunil Bairam
Chirantan says
Hi Mohan, thanks for all the details on SBI Life smart ulip. Now my question – Is there a better ulip than this in Indian market? Can someone provide me details with comparison please?
Suraj says
Thank u Sandeep
u are calculating my way. Many do not know about these charges and the agents used to lure the people for high returns if the market is “BULL”. Otherwise it is ” HELL ” like now. the index was 21 thousand plus and now 10 th plus !
Mohan says
@Deepak
Yup. This is the first product I have seen with so much clarity being provided to the customer upfront.
@Sandeep Garg
True. But all other similar products in the market aren’t any different. Just that they don’t show all the charges opaquely.
Jignesh says
It is like one person giving you poison in your food without informing you, and other informs you that I am mixing poison in your food.
Loss is always there in both case….
Sandeep Garg says
Charges are too high. I am agree with Mohan that we should separate our investment with insurance. But it is too difficult to do.
Charges for annual premium 50000 are as follow
1) 7500 Premium allocation charges
2) 720 Policy admin charges
3) 1250 Sum Assured related charges
4) 624 Fund Mgmt Charges (@ 6% gain) subject to higher if u think gain is more.
5) 428 Mortality Charges
6) 1301 Service Tax
Total charges 11823
Fund invested are 50000 – 11823 = 38177
This is for first Year
For 2nd and 3rd years charges are around 6912 and 7623. 🙁
So think twice before go ahead. You are paying 1.5 lac in 3 years and investing only 1.2 lac. Now again you will get the unit on the basis of amt u pay per year that will decreasing as NAV get high and high. And in the last you will get highest NAV.
Dr.Girish Metha says
Forget about charges and everything I purchases it with N.A.V. of 8.79 and now highest NAV is 15.40 almost double I have recovered all the charges and buy same plan for my spouse again @ 14.10
M S Somayajulu says
dear sir,
I am a SBI pensioner.
1 ) Pl advise the total charges I had to pay in the first year and 2 nd 3 rd years in case of my investing 50000 per year for 3 years and what is the amount of charges in case of my wife invests in this plan.
2 ) In case of death of the policy holder when the insurance amount will be paid to the nominees (whether it is after completion of 10 years from the date of the policy or in the usual way of other life insurance policies)
manoj says
Dear Sandeep,
Well done buddy for an accurate analysis & verdict.U got it right
this is just like any other ULIP with some changes. thats it 4/10 only.
Mohan is right Insurance has to be separated from Investment then
one will do good.
Manoj
narayan das says
what is the total charges of smart ullip on 100000/- yearly premium for the 1st,2nd,3rd year.
Deepak says
At least SBI made an honest effort in saying the various charges involved upfront unlike other ULIPs. I think these charges are not too high Mohan, when compared with other ULIPs in the market.