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.
anmol says
dear friends
i am planning to invest in ulip and the premium per year is 50000 , and i am plannig the priemium to be paid upto 3 yrs only and after 4th or 5th yr i am planning to take out my money. so how much return i will get after 4rys apporx kindly suggest. coz the insurance agent are saying u will double ur money after 4 to 5 year is it so . kindly suggest
jayant bhat says
You will get the answer of your query if you read the review and comments right from beginning.ULIP investment means no guarantee of returns in amount. Simple words – No Guarantee of Money.Might double in one year, might go negative in one year or 5 yrs,might double in 5 years. No Guarantee.Yes,but worth investing for long time investors only.
Muhammad Arif says
Hi,
I bought SBI Smart Ulip. I paid 50,000 premium for the year 2009. My Agent told me that I have to pay for another 4 years. So, total is 2,50,000. What is my return? How can expect the return? How much? How good is that? Agent showed me a Notice and told me that my return will be 700000 approx.
Waiting fo reply,
Pramod Badri says
Hi Mohan,
I had bought SBI ULIP an year back. But now due to some reasons i want the money invested in it ( at the present rate that it is ). Is it possible for me to get close the ULIP account and get the money forgetting about the insurance and any other attached policies?
Thanks
Pramod
jayant bhat says
I am afraid you cant get back your money. Check the policy document wordings on lapsation,surrender and you will get a clearer picture of what investment in insurance product is all about.
ashwin gomatam says
Why ULIP is a Bad Investment
By Dhirendra Kumar
The so-called turf-war on ULIPs that SEBI and IRDA have been fighting has now taken on a life of its own. In reality, just about the least important thing is who regulates ULIPs, while the most important thing-or rather, the only important thing-is that investors understand what they are getting into and make the choices that are best for them. I find that there’s a great deal of misinformation floating around about ULIPs and why exactly are so investment advisors so critical of them. ULIP proponents generally give a set of reasons which in their opinion invalidate criticism of ULIPs.
In this article, I’d like to briefly describe why I think these arguments are not valid.
Argument: ULIP expenses have been lowered by IRDA. ULIP expenses are now down to just 3 per cent for ULIPs of up to 10 years and 2.25 per cent for longer ones. Mutual funds, by comparison, have a higher fund management charges.
Reality: The way IRDA has framed the rules, 2.25 or 3 per cent is effectively the average over the entire lifetime of a ULIP. The charges are heavily front-loaded. During the first year, these charges are as high as 40 to 70 per cent. If the customer cannot continue with a policy for any reason, then his real expenses are far higher. And as it happens, a huge proportion of policies lapse during the earlier years. The front-loading has no logic, except to enrich insurers and agents. And fund management charges being lower than mutual funds is a not a full comparison. In mutual funds, total expenses are capped at 2.25 per cent for equity funds and less for other funds. These are not comparable to the fund management charges of ULIPs because ULIP customers also pay premium allocation charges, policy administration charges, mortality charges, and for guaranteed ULIPs, guarantee charges. Comparing fund management charges alone is a joke.
Argument: ULIPs have led to a massive rise in insurance penetration in India.
Reality: Insurance means insurance, in the sense when the insured person dies, his family gets money to pay for food, rent and education. In a country with as little social security as ours, the growth of insurance has to mean the growth in the reach and quantum of risk cover for lives. To call a non-insurance, market risk-bearing product such as ULIP insurance and then present it as evidence of the growth of insurance is simply dishonest.
Argument: The insurance industry provides a huge amount of employment. 30 lakh people have found work through insurance.
Reality: If ULIPs were a sound financial product than this would be wonderful news. Since they are not (see above reasons), this issue is a complete red herring. It is not the responsibility of ULIP customers to provide agents employment by giving away vast proportion of their premiums as commission. If crores of people’s money has to be mis-invested to provide employment for lakhs of people, then it’s better for those lakhs to find some other, more productive employment.
Argument: ULIP fund flows are important for the stock market and for infrastructure development.
Reality: The same as the employment argument. It is not the responsibility of ULIP customers to buy expensive and non-transparent investment products so that the stock markets can be boosted. Wouldn’t it be possible to create infrastructure if ULIPs could be made more investor friendly.
I find the last two points to be particularly dishonest. They somehow imply that if ULIPs were made more investor-friendly, then lakhs of people would immediately become unemployed and money would stop flowing into development. However, ULIP critics like myself have nothing against the concept of ULIPs. If ULIP cost is brought down and made non-front-loaded; and if transparency is enhanced to the level of other asset classes, then they would be a very good product. The fact that the ULIP’s enforce gradual SIP-style investments could actually make them a superior product.
Sanmatikumar says
The Policy was been banned and taken back .what is the status wheather i can continue my policy or can withdraw it please suggest me…..
Sanmatikumar says
The Policy was been banned and taken back .what is the status wheather i can continue my policy or can withdraw it please suggest me…..
Shakeel says
The policies are BANNED, What will be the status of our policies…! SMART ULIP
Kindly suggest.
Regards,
Jacob says
As i have read all this its confusing me that i have taken a wrong one. I am an NRI i have taken a smart ulip of 1.00.000 my first investment this year march. do i want stop and get back my money, is it possible to withdraw from this. can i know which is the best to select, can you help from this or do i want to continue. i have taken this for my daughter for her education and so on. pls help me
with regards
Jacob
Jayant Bhat says
Basic rule of investment – decide your investments based on your goals/needs – short term(requirements within 3 yrs),mid term(>3 yrs till 7 yrs), long term > 7 yrs.
Mutual Funds, ULIP’s fall in category of Long term. Dont fall prey to return commitments by anybody in this world if the investment is linked to Equity Market.
read some nice articles posted in this website.
Always consult a professional financial planner(not the so plain CA’s or Tax Consultants). Think investment from point of view of investments only rather than keeping in mind the taxation aspect alone. Fees paid to professional planner would save ‘n’ times money invested in wrong portfolio.
In your case, you have no choice but to continue for coming years. Save a lot. Dont worry if u intend to intend to invest for min 7 yrs. dont think of withdrawing until u need it really badly. Anyways, whenever you get time, read the policy document which is really informative. 90% of your queries would be resolved upfront at home.
For everybody, who has got commitment of returns, Take it in writing from the agent. In case you get in writing, then just pop into the insurance office and show the branch manager what u got from the agent. you will soon see a letter of termination of that agent and changeover:).Till date i ve not seen a single letter of returns commitment from agent in the last 8 yrs.
Jacob says
I wish to take a Mutual Fund, for a short term 3 years. So what should i look for and which Co. should i opt for.
Mohan says
Sorry Jacob, I dont provide investment suggestions.
Jacob says
I have taken SBI ULIP of 1lkhs (for a value of ten) per year for 3 year term. what will be my return after ten years, how long can i invest in this. i took this for my baby girl for her future ….. is it safe for me to for 15 years or do i want to change to some other investment after 7 or ten years. is this ulip the best product or is there any product that i do for my girl for her future studies and for her marriage.
winnie says
Can anyone help me out. i ve investes my first 50000 this year in sbi smart ulip. with all the above discussion it looks like waste of money.i did it mostly for tax purposes. is there any way by which i can stop investing in this plan n get my money back wihtout it actually becoming more burdensoem than the tax iwud have had to bear on it
Mohan says
Winnie, you have to think yourself after calculating your tax liability as well as your investment options. Based on that you arrive at a conclusion.
jayant bhat says
If the policy is in free look period, you can take the policy directly to any SBILife Branch with a written letter stating that you wish to cancel the proposal and cancel the policy. Always ,before investing calculate how much tax you would be losing if u dont invest. If at all you have to invest,then do a thorough check.
Jignesh says
Almost 90% of investors are assuming that this is pure equity product and will give highest NAV at the end.
But fact is this is debt oriented product with reasonable FD kind of returns (slightly more) but with lot of charges to make agents and SBI Life richer.
One can expect 6-7% (net return excluding charges) from this.
Mitesh Pathak says
Right Said Jignesh.
This is an insight in to how it works,
These plans use strategies like Dynamic Hedging and CPPI (Constant proportion portfolio insurance), which are advanced strategies used in Derivatives world. But, let me explain a simplified version of the whole process.
Supposing a policy starts today and is guaranteed to give highest NAV in next 7 yrs and we can control how money moves to debt and equity, its pretty simple.
In the beginning, let’s assume a NAV of Rs 10, and the Asset allocation is 100% in equity and 0% in debt . Now suppose, the market moves up and NAV goes upto Rs 15 by the end of the first year, at this point, try to understand what Insurance company has to provide – they have to make sure, that they provide at least Rs 15 as the return after 6 yrs . Now in order to achieve this, all they have to do is keep X amount in debt instruments which will mature in next 6 years and provide Rs 15 at the end of 6 yrs, so assuming the debt return at 7%, they need to put around Rs 10 in Bonds , so that the maturity of the bond is Rs 15 at the end of 6 yrs .
=> 10 * (1.07)^6
=> 15.007
They can now invest the rest Rs 5 in Equity as Rs 10 is allocated to Debt . So, now they’ve made sure that whatever happens to the market, they get Rs 15 for sure at the end of 6 yrs. Now, there are two possibilities
Case 1 : Market Goes down : If market goes down, the NAV will go down correspondingly, but as per the strategy, the maturity value will be at least Rs 15.
Case 2 : Market Goes up again : If market goes up at this point and the NAV rises above 15, for example say to Rs. 18, now again they will pull out money from Equity and allocate such an amount to debt, that the maturity at the end of total 7 yrs would be Rs 18 and so on…
Mohan says
Hi All, Here is some good news for those of you who have been asking for a comparison among multiple ULIP plans in India. I have posted a detailed article comparing various ULIPs in one article, you can read it here – https://mohanbn.com/a-detailed-comparison-of-ulips
Thanks to Sumanth for his contributions to come up with this article.
Mohan says
Hi All, Here is some good news for those of you who have been asking for a comparison among multiple ULIP plans in India. I have posted a detailed article comparing various ULIPs in one article, you can read it here – https://mohanbn.com/a-detailed-comparison-of-ulips
Thanks to Sumanth for his contributions to come up with this article.
Mohan says
Many of you have been asking me various queries on home loans. So I came up with this article titled “Home Loan – Do’s and Don’ts” for the benefit of all my blog readers. Feel free to go through it here – https://mohanbn.com/home-loan-dos-and-donts
Mohan says
Many of you have been asking me various queries on home loans. So I came up with this article titled “Home Loan – Do’s and Don’ts” for the benefit of all my blog readers. Feel free to go through it here – https://mohanbn.com/home-loan-dos-and-donts
deepak kumar says
Dear sir when ur goal of investing is purely tax saving and not profit making and as u have already made an investment with SBI Life smart ulip (Series-II) .U need not worry about the investment.I think u have made a Smart investment .It is very good product and driven by the high values of SBI ensuring for the safer and good returns to the policy holders and returns from this policy are Tax exempted.
Dr. Rajan Patil says
Highly URGENT
dear Mohan
I have invested in SBI smart Ulip 2 days back starting with Rs 25000 six monthly premium for 5 years. I have just paid my first premium.
Now i would like to cancel and withdraw from it for various reasons. I am told i need cancel within 15 days period. How much i stand to loose from my principle amount.
Secondly. If i continue with this ULIP schme, with the intention of withdrawing all my money at the end of 3 years or any time just after it, where i would be happy and contented with a return of my 1.5 lakhs with meager 3.5%/pa interest ( saving a/c) what NAV should i look out for going by the current rate. would this be relatively low risk option i chose to continue with SBI Ulip ?
Between the above two option which one should i exercise?. remember my goal of investing is purely tax saving and not profit making, so happy with sb a/c interest rate retuns as long as it helps me to save tax by 3 yrs lockin period.
Kind regards,
Dr. Rajan R Patil
Asst Professor, Chennai.
Mohan says
Dear Dr. Patil, i have posted an article with detailed comparison of many ULIPs in one post. You can read it here – https://mohanbn.com/a-detailed-comparison-of-ulips
Sakshatha says
Hi,
I have a query.
Say for example, I invest 60K per year for 3 years, When will I be able to withdraw all my money with returns. Should I wait for 10 years or 7 years. Th edocument says highest NAV of 1st 7 years. If NAV reduces after 7 years what is the minimum I’ll be getting?? Is it not possible to withdraw all money at the end of 7 years itself.
I am new to this. Pls answer though this seems to be a stupid question
Dr.Mohammed Shafiuddin says
Dear Friends,
No comments against the policy since it is the good policy. Smart ULIP is Smart.
Rashmi says
Hi friends,
If you are looking for doubling your investments you should be investing in Kisan Vikas Patra wherein your investment will be doubled in 8 years and 7 months.. The other option to increase your returns is go for Post office MIS and divert the monthly interest towards Post office RD.. Doing this you can maximise your return rate.. Afterall traditional and conventional savings are THE BEST option to remain calm and composed.. I am not against money market.. I would say like this.. If you have Rs. 100 to invest, then you should be investing 80% in traditional savings and rest of 20% in modern money market..
Mohan says
Hi Rashmi, good you bought up the traditional risk free modes. Well, people look at other ones because they are willing to take some risk and by which they wish to make more money! I do agree with your thought on diversified portfolio with a mix bag of risk free and risk involved investment but I would suggest 60:40 🙂 Before deciding on that ratio, it is good to have a sound financial planning in place.
sandeep kumar says
sir,
I want to know that how to process smart ulip?
Mohan says
Sorry, i didn’t get your question quite right. would you mind elaborating it?
Vaibhav says
In Short,Can you please tell me if I need to Invest 20000/- as annual premium in ULIP, which is best in market…..Wealth plus or any other ?Please help me.
madhavan says
the discussion and suggestions in this page was very informative. A beginner may get first hand information on how the ULIPs works and it is note worthy to say that it make us probe more. thank u.
however, if , a comparison of mutual fund working is also incorporated in this , it would have helped those are a bit reluctant in investing mutual funds.
madhavan.
Mohan says
Glad you liked it Madhavan. I will keep your suggestion in mind while writing future articles. If you liked the posts on this blog, feel free to subscribe for email notification. That will help you to stay tuned with new posts on this blog.
madhavan says
the discussion and suggestions in this page was very informative. A beginner may get first hand information on how the ULIPs works and it is note worthy to say that it make us probe more. thank u.
however, if , a comparison of mutual fund working is also incorporated in this , it would have helped those are a bit reluctant in investing mutual funds.
madhavan.
Mohan says
Glad you liked it Madhavan. I will keep your suggestion in mind while writing future articles. If you liked the posts on this blog, feel free to subscribe for email notification. That will help you to stay tuned with new posts on this blog.
Jayant Bhat says
ADD helps a lot as the benefits are in addition to the death benefit and a very small premium. e.g. death happens due to car accident then death benefit=sum assured plus ADD amount. so if sum assured is 20 lacs + ADD is 10 lacs then death benefit=30 lacs. I just read an article in newspaper(I have to check the courts exact reading yet) wherein High court judge has approved a claim of ADD benefit for heart failure case too coz cardiac arrests are unwarranted & occur as an accident itself. so it is always better to go for riders. CI is out of question but you can opt for mediclaim.
Regret that I cant give you product specifics as i am a professional financial advisor and my services are chargeable which you can come to know on my website.
I insist you seek financial planners consultancy. I would not mind if you can visit any other financial planner, but here is why you should appoint financial advisor just as businessmen need CA’s or other consultants:
1. The right product mix which only a professional can tell. 2. ULIPs will have their respective charges, only a financial advisor would show you ways to nullify them 3. He can save this money too if he analyses your existing products.
4. More importantly, future management of fund switches.
5. and ofcourse, tax saving.
SPaul says
Thanks Jayant for your reply. I didn’t know I will have to pay tax on surrender.
Can you tell me which ULIPs with 80 times cover? I think for 60K, 15-18L cover may be fine. I would have to drop CI since I already have diabetes.
Can you tell me if ADD is necessary? Doesn’t the basic insurance cover death in a car accident for instance?
I am leaning towards Bajaj iGain. However I wonder if the annual policy admin. fee of 1,200 which goes to close to 5K is too much. For 60K it means I start at 2% and it could be as high as 8% at the end of 25 years.
As you rightly say, I am thoroughly confused. Pls help.
Sneha says
Wow.. So much of information in this article as well as in comments. You are writing great about financial products Mohan. I read the latest articles on finance & tax planning, simply a cool place for so much of information! Thank you is all I can say for putting it across all in one place.
Mohan says
Glad you liked it 🙂 Thanks!
jayant Bhat says
CORRECTION: PLEASE READ “for CI Rider” instead of “Also, for Section 10 10 D one has to be clinically hale and hearty without any existing ailments like Cardiac or Respiratory diseases or disorders like Diabetes etc.
So the correct statement would be: Also, for CI Rider one has to be clinically hale and hearty without any existing ailments like Cardiac or Respiratory diseases or disorders like Diabetes etc.
jayant Bhat says
Check out the ULIPs where you can take even cover upto 80 times of cover. If tax saving is the only motive then why not invest in mediclaim, term plan and ELSS. If you buy equities and hold for 365 days and after 365 days sell then long term capital gains would be applicable. As on date, LTG is taxfree.
The best reason to buy ULIP is to participate in Stock Market without having to manage funds on your own plus purchase a life cover. Section 10 10 D or 80 C is just one tool which government has opted to promote and encourage life insurance awareness. As of now, Maturity amount and not surrender amount is tax free. Also, for Section 10 10 D one has to be clinically hale and hearty without any existing ailments like Cardiac or Respiratory diseases or disorders like Diabetes etc.
It will difficult to decide if you keep on talking to n number of agents. There are 23 companies and how many companies would you keep hopping. Infact these agents would nothing but confuse you.
Lots of pros and cons. Better seek profesional help than that of individual agent.
Venkat Vinoth says
Hi Jayant,
I once thought of buying SBI ULIP and dropped that decision later, since i was in need of tax savings as my primary goal. So i ended up with VPF. VPF provided me 3 benifits.
– Tax free,
– Highest rate of interest with no risk
– a single request to complete the processing that too we have a online link to apply in my co.
– No need to go for IT returns, since VPF is captured from you pay itself. 🙂
I think a lot about diversifying funds but end up doing nothing.
But even said that, i am really worried now just when i think about the liquidity of the money i invested. Naturally ‘m a conservative person. So at the end i was ended up with some idle money in my savings which i could’ve made a growth atleast more than 3.5% which the savings bank give.
Now i’m interested to save in ELSS in particular. I’ve planned to diversify my investment as 60:40 on risk terms and i consider ELSS as risky and PPF as non-risky. So can you let me know how i can invest in ELSS.
Thanks in Advance
SPaul says
Hi Mohan,
I have found your website invaluable in my recent quest for insurance. I started looking for term and now am confused whether to go for ULIP. Yesterday, the HDFC Standard Life salesperson came over and he told me about a ULIP where I can take 40 times annual premium as cover, i.e. if I put in 60K a year I get cover for 24L. Plus it has CI and ADD rider. The mortality charge is lower than term cover right now, but it goes up with age. I am not sure if they will reduce the cover based on how much the fund value is. I mean if the fund value is 20L when I am 50, does it mean they will only insure 4L?
Today I looked at Bajaj iGain also and I found that interesting as well. Am I on the right track? I am 40 and I need insurance of 24L at least. I checked at term and it would cost me around 10K and it won’t increase.
I know how these insurance guys hard-sell ULIPs (In fact I didn’t hear from the ICICI guy after I told him clearly that I wanted Term). But isn’t the section 10 10(D) benefit the best reason to get ULIPs? I mean with stocks I get hit by capital gains and income tax if I sell, but with ULIPs isn’t all the money received on surrender fully tax-free?
Thanks!
Jayant Bhat says
If investment is the sole purpose and nothing else, then I can tell you how i started my investment in equities. Maybe you can try investing 20% of your investment in equities directly: My records state that SBI Magnum and Reliance Growth are two of very good MF’s. I checked out where they invest our money, the list is given in the form. I chose 10 top performing shares in terms of name & industry performance. Invested in them and wow, I made 25% more than my MF portfolio manager did for me.
For ULIP’s one needs to be quite inquisitive to do all the research or hand over job to an analyst/planner. Every company advisor/agent will run after you for hours the moment you say you want to invest only for investment purposes. Be careful. Read other articles published by Mohan and his Guests.
Personal Advise: Invest When and If Nifty touches 4400/4500 and withdraw your profits after every 20-30% returns. This is just an indicator and one needs to be bit market savy to understand this. And last but not the least: Whats the fun in taking good returns without a bit of excitement and RISK.
pkgupta says
Which is the best ulip plan. If I want to invest money for invement purpose only please inform the best mutual fund
krishnan says
mohan
on one hand we say ulips charge high , but if u compare even mutual funds charge nearly 2.5% of our fund value as charges every year and hey friend since this is not shown in our daily nav, most of the people think that mutual funds do not charge even one paise per year , on an investment of 1,00,000 mutual fund house charges about 2500 / year as their charges and suppose next year the fund value is 120000 then i pay about 3000 rs , is this not right, then how come u say that mutual funds are cheaper ,yes only in the first year the ulip charges are higher but if you average out the cost during 10 years then mutual funds are more costlier
krishnan
Mohan says
Krishnan, your points are valid to certain extent. The very fact that the returns through mutual funds outperform ULIPs in most of the cases. Though the charges for fund management and administration are comparable, the returns are not!
Dr.Girish Metha says
In SBI life unit Plus super if you see the official benefit illustration the difference between gross return and net return is just 0.64% is there any cheap mutual fund. I am sbi life advisor I have compared the mortality charges between term plan and ULIP, for the same sum assured ulips mortality charges are much cheaper than our term plan which is the cheapest term plan in industry and also the mortality charges are applied on Sum Under consideration so when the fund value goes up mortality charges come down. Also mention the NAV on your blog where everybody shall come to know the excellency of our fond performance only it is good to comment that buy mutual fund and term plan actually it is costly even it hold true for our old products where we used to charge 25% allocation now if you invest 100000 amount available for investment is rs 91000 in first year premium I shall send you customized benefit illustration for study as for smart ulip the highest granted nav is now 19.60 in one year where you get such return
Mohan says
Hi All, those of you who have been asking for similar products compared to SBI’s Smart ULIP, here is a list of 2 such products and complete details available on my blog:
1. LIC Wealth Plus with Guaranteed NAV
2. Bajaj Allianz Shield Plus
Chandrasekhar says
Mohan
You have been constantly saying dont mix up your investment and insurance. Among investment options what is it that you would recommend ? Also do you think that since market is fairly at a bottom this maybe the best time to get into it ?
Mohan says
Hi Chandrasekhar,
In reply to your comment, another reader by name CH Srinivas wrote a mail to me as below:
“life insurance means risk or untimely death due to accident or by a dicease.
investments are for the fear of living too long.”
I do agree with him to a large extent. But there are many decisive factors like age, financial goals etc., which affect an individuals planning. There are many articles regarding financial planning on this blog which will answer your question. Please go through them.
Jayant Bhat says
Not sure if you have posted this query for somebody specific. However, I will try to resolve your query though at this stage I dont know much about the facts.
NAV setting date is not dependent on the date of payment clearance, but it is dependent on policy issuance.
Generally, the NAV Date given to you is the date of policy issuance depending on the cut off time that the company sets in.
Sanmatikumar says
Hi,
I had filled the proposal form and paid DD for SBI Smart ULIP II on 7th Jan 2010 in SBI Bank and the Officer has assured the NAV 10 and will be resistered on 8th Jan 2010 . but now it has been resistered on 25 th Jan 2010 at NAV 10.37,
May i Know how much day will required for resister? why it has been delayed?
Dr.Girish Metha says
smart ulip has 2 funds money market and flexi protect , inetially your money is invested in money market fund and you get nav of that funs on issuance date later the momey is shifted to flexi protect fund on 8th or 23rd which ever comes first after policy issue date and if your policy is issued on 23 or 8th then your money is directly invested to flrxi protect fund which offfers higest nav assurance current nav is 9.87 and highest is 10.81
Dr.Girish Metha says
policy is sold by sales team but you are appplying for policy it is issued after a process called undewriting ,which decides whether to issue policy or not once company accepts your life risk then policy is issued and in ULIPS you get closing nav of policy issue date in smart ulip it has different syatem of nav
jayant bhat says
Term insurance are not designed for homemakers. Some companies might allow minimal cover of 3-5 lacs for homemakers without husbands cover. Also, the requirement for term insurance is apt at early and mid ages.
It depends on the underwriting guidelines of companies. A strong case would have to projected alongwith the application giving the actual purpose of proposal.
Term products are designed for the bread winners i.e. whose unfortunate death would bring a financial lacuna in the family. So, if something happens to a homemaker, would there be a financial crisis in the family. The answer is No.
One more point in which term product cannot be considered is Unearned income like interest amounts etc.
Basically,this is a typical family which needs proper financial need based analysis. The existing savings must be split into immediate, mid term and long term needs. They should be invested accordingly. If at all, the homemaker wants an insurance cover then she will have to opt for a ULIP which will suffice her investment as well as minimal insurance needs.
My serious recommendation would be to seek a proper planners help.
jayant bhat says
Term insurance are not designed for homemakers. Some companies might allow minimal cover of 3-5 lacs for homemakers without husbands cover. Also, the requirement for term insurance is apt at early and mid ages.
Term products are designed for the bread winners i.e. whose unfortunate death would bring a financial lacuna in the family. So, if something happens to a homemaker, would there be a financial crisis in the family. The answer is No.
One more point in which term product cannot be considered is Unearned income like interest amounts etc.
Basically,this is a typical family which needs proper financial need based analysis. The existing savings must be split into immediate, mid term and long term needs. They should be invested accordingly. If at all, the homemaker wants an insurance cover then she will have to opt for a ULIP which will suffice her investment as well as minimal insurance needs.
My serious recommendation would be to seek a proper planners help.
Dheena says
Thanks for your clarification, I see what you are saying. I will ask his wife to take a term or life insurance on her, so, that things are covered in case something happens to her. However she is a house wife, so, will there be any specific limit for term insurance cover?
Dheena says
one of my relatives underwent heart surgery few months back and is currently on the recovery mode. When discussing with him abut his insurance policies, i found that his total Sum assured is quite less and will not be enough for his family in case of any eventualities. He is the sole bread winner for his family,so, i am wondering whether there are any insurance policies or term policies that he can avail. I believe that he cannot take any insurance policies because of his current state, and would like you to let me know if you know some policies that he can take.
Mohan says
Dheena, I think too many things are being mixed up here. Let me sort out the problem here.
1. For illness related covers, go for health insurance. This is a must, no matter what age category you belong to.
2. For Life covers, dont’ mix up insurance with other modes like investment or health. As such linked policies will always yield lower benefits when combined. Always opt for separate instruments for investment and insurance.
Life insurance is to help family in the absence of primary earning member/s.
Jayant Bhat says
Also, now that the importance of insurance is realised, would it not be prudent to get the other members insured. Worst scenario – In case something unfortunate happens to him, who would be the next primary earning member, what about his or her insurance.
Jayant Bhat says
Term Insurance plans are out of question for your relative. Frankly speaking I have underwritten few policies in the past wherein the proposed insured have had some cardiac ailments. Let me tell the acceptance ratio is negligible in such cases and that too with huge extra premium. In case you are an agent, then you can take his complete past medical reports, show to them to the underwriters and then get seek an approval from them to log in the case. Directly, dont pick up the case and log in. Rare chance of acceptance but still give it a try and ULIPs with minimum cover option are the only product to be tried. Dont even think of enhancing the cover. Ofcourse, fresh medicals would also be required incase the company allows to log in the proposal.
Once the casualty has occured, then a person with less insurance cover should save more and more for his family.Here he can invest in zero death benefit products or mutual funds.
Srikanth S says
Dear Sir,
Have there been any reduction or changes in the service charges and other charges charged by SBI for smart ULIP. i would like to invest in this please guide me.
Sri.
Mohan says
I don’t have any updates on SBI reducing various charges on its Smart ULIP plan. Where did you get that information from?
anurag rastogi 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.
anurag rastogi says
hi SBI’s policy management is not good, after the policy was bought, SBI officer is not giving proper response to the customer queries.
Mohan says
Sorry to hear that. Would you mind sharing more info?
Reshma says
Can someone comment on the performance of SBI Smart ULIP while comparing this with other ULIPs in the market? How is the returns and the claim settlement record by SBI?
Mohan says
Reshma, could you be more specific when you ask for performance? What parameters are you looking at you evaluate this ULIP?
Shakeel Ahmed says
Dear Sir,
Kindly advise, I have lost my SBI LIFE (SMART ULIP) policy documents which I received by Post, what is the way I can get the documents re-issued and what is the procedure involved.
Regards,
Shakeel Ahmed
Mohan says
Shakeel, get in touch with SBI Life customer care. They should be able to assist you better.
Kumar says
Hi All,
I am new to this form of investments and had recently taken SBI SMART ULIP by paying a premium of 50000(and have to pay 1 lakh for the next 2 years) and am assured that i will get a minimum sum of 2,50,00 at end of 5 years. My question to all masters of the trade is — “Is there a chance that i end up losing a part or all of my invested money i.e, 1,50,000(in 3 years), if the market goes bad or worst or in any other scenario.”? Since i am new to this form of investment, i am curious to know if atleast the amount i invest is safe.
Bhargav says
Hi Kumar,
In a scenario where u have invested 1,50, 000, normally 20% of your investment will gets deducted in term of charges(initial allocation charge + other periodic charges).
This will left you with Rs. 1,20,000.
1) Suppose you have invested at an average of Rs. 13(1st yr=12, 2nd=13, 4th=14) per unit over the three years term then you would get 9230.76 units.
In the same time you would gets surity of Rs 14 per unit as your HIGHEST NAV.
This will give you only Rs 1,29,230.64 compared to Rs 1,50,000.
To break even you need atleast Rs. 17 as your unit price.
2)As far as your question of loosing entire amount. It is unlikely as they guarantee you atleast the NAV which you are investing. So NAV going below invested NAV will not leads to investment getting NIL.
Kumar says
Thanks for the information Bhargav. So if NAV is going to be less than 17 before i claim, then i am bound to loose money, right?
Jayant Bhat says
I have been in this industry since the advent of private life insurance companies and I have tried to convince almost everybody that I ve come across in these years regarding opting for term product. But barring a few(would not be more than 10-20 people) none of them seem to convinced about buying a product which does not give something back in return. I think like minded people like us and probably an awareness creation for longer duration would serve the purpose.
I agree with purchase of term plan but somehow am not convinced on shares investment if one who does not have knowledge of share market. They should leave this job to the fund managers of ULIPs or Mutual Funds.
Admin charges have got reduced from Jan 10 and there are newer guidelines regarding ULIPs now, so ULIPs cant be costly henceforth. Target should be adequate life cover in form of term cover+ULIP with min cover or Mutual Fund investment.
Jayant Bhat says
I have been in this industry since the advent of private life insurance companies and I have tried to convince almost everybody that I ve come across in these years regarding opting for term product. But barring a few(would not be more than 10-20 people) none of them seem to convinced about buying a product which does not give something back in return. I think like minded people like us and probably an awareness creation for longer duration would serve the purpose.
I agree with purchase of term plan but somehow am not convinced on shares investment if one who does not have knowledge of share market. They should leave this job to the fund managers of ULIPs or Mutual Funds.
Admin charges have got reduced from Jan 10 and there are newer guidelines regarding ULIPs now, so ULIPs cant be costly henceforth. Target should be adequate life cover in form of term cover+ULIP with min cover or Mutual Fund investment.