SBI Life Smart Scholar ULIP Review

SBI Life Smart Scholar is the Unite Linked Insurance plan which claims to secure and build the future of your child. Well, let us review that how effectively this ULIP can build the fortune/future of your child?

Key Features of the Policy -

• Secure your child’s future by gaining from the financial markets and much more.

•Dual protection for your family, in case you are not around –

•Payment of base Sum Assured and

•Inbuilt Premium Payor Waiver benefit to ensure continuance of your benefits.

•Accident Benefit which includes Accidental Death benefit and Accidental Total and Permanent Disability (Accidental TPD) benefit, is an integral part of the plan.

•Free allocation of units by way of regular Loyalty Additions, giving periodic boosts to your investments.

•Enhanced investment opportunity through 9 varied fund options including P/E Managed Fund, Index Fund & Top 300 Fund.

•Twin benefits of market linked return & insurance benefit.

•Liquidity through partial withdrawal(s).

•Tax benefits as per prevailing tax laws.

The minimum age of child for entry is 0 years and maximum age is 17 years. Proposer should be minimum 17 years and maximum 57 years. There are varieties of premium terms starting from single premium to half yearly and yearly premium of various time horizons.

The life cover is on and average 5 times the single premium. Minimum Single premium is Rs.75,000. On maturity, you will get your money back with all the returns and then you can use it for various purposes of your child.

My Opinion & Concerns about this Plan-

Well, I am personally not comfortable with this plan because of its higher level of opacity and lack of transparency.

The product brochure provided by SBI life on their website is not sufficient according to me. I mean they have not mentioned following things anywhere in their brochures.

- The scheme has nowhere mentioned that where will they invest your money – Equity, Debt or Mixed and in how much allocation?

- They have nowhere mentioned that which are the various types of charges associated with this policy? Say premium allocation charges, mortality charges, fund management charges and many others.

- For a time horizon of more than 10 years Equity is the best instrument to build serious wealth. But in this plan they have nowhere mentioned that how much they will invest in equity and in which kind of stocks – largecap, midcap or small cap?

- The life cover that this plan provides (5 times the SP) is also a peanut size.

In my opinion, don’t go for this policy. Rather than that Term Insurance + Equity Diversified Mutual Funds (2-3) + PPF is the best and simple combination to protect life and build wealth for your child.

I will advise the interested parents to start regular SIP in 2-3 carefully chosen equity diversified mutual funds. Believe me, regular SIP in Equity diversified mutual funds will build a huge wealth for your child at the rate of 15-20% compounded annually. No need to go for such opaque insurance cum investment plans.

No need to rely on this plan to build the financial future of your child.