SBI Life Smart Performer ULIP Review

SBI Life Smart Performer is the Unit linked insurance plan which offers 5% higher returns than the Highest NAV Guaranteed.

Recently I have received lots of queries about this plan because of its mouth watering offer. So let us review this plan. Should you really invest in SBI Smart Performer ULIP?

Key Features of the plan

•Guarantee at maturity based on ’5% Higher than Highest Guaranteed NAV’ during the first seven years or prevailing NAV at Maturity, whichever is higher, subject to conditions.

•Enjoy the best of both worlds -  Guarantee only or Guarantee and Market Upside through our unique Plan offerings - ‘Secure Plan’ and ‘Secure N Grow Plan’ respectively

•‘Automatic Rebalancing’ to Lock-in your gains

•Convenience through single premium (SP) or 5 year Premium Paying Term (PPT)

•Life Insurance coverage with minimum Sum Assured of 10 times or 7 times of your Annualised Premium (AP), based on your age.

•Liquidity through Partial Withdrawal(s)

•Option to customize the product with Accidental Death Benefit

•Attractive Tax benefits under the Income Tax Act, 1961, subject to conditions.

How this plan works?

Well, the plan invests higher proportion of your money in equity in the initial years but later on to protect your wealth, it increases the debt allocation so that you can achieve minimum highest guaranteed NAV.

Minimum age of entry is 9 years and maximum age of entry is 65 years.

Minimum annual premium is Rs.50,000 and half yearly premium is Rs.44,000 and monthly minimum premium is Rs.20,000.

On and average the plan offers life cover that is 10 times the annual premium so annual premium of Rs.50,000 you will get Rs.5 lakh of life insurance cover.

My Opinion -

Well, I am personally against all kinds of ULIPs because of their highly opaque nature. People mainly invest in ULIPs for following 3 purposes.

- To get Life Cover

- To Save Tax

- To Build Wealth

But well, the following simple combination can fulfill all of the above goals in very cost effective manner.

Term Insurance + Equity Diversified Mutual Funds (2-3) + PPF

Life cover that is 10 times the annual premium is really a peanut size of life cover in comparison to the life cover offered by the term life insurance plans. If you want to save more tax under section 80C than increase investment in PPF no need to go for ULIPs and if you want to build long term serious wealth than equity mutual funds are the best and cost effective financial products to build wealth.

On the top of this, we don’t know that how much premium allocation and other charges associated with this plan (They should mention it on their website. But on their website they have nowhere mentioned it.).

Thus, I will advise the readers of MJ2BC to stay away from this ULIP Plan.

What if you have already invested in SBI Smart Performer ULIP?

Get out of it as early as possible.

First of all stop paying any more premium and let the policy surrender no matter how much surrender charge you will have to pay.

Rather than that start investing in equity mutual funds via SIP. But in any way, stay way from this highly opaque financial product.