SBI Smart Horizon ULIP Review

I really don’t understand that why ULIPs are becoming more and more popular even after spreading financial awareness by many financial planners, advisors and bloggers all over the India?

SBI already has 5 ULIPs and recently it has launched one more ULIP plan and that is SBI Smart Horizon ULIP Plan.

So What does this plan offers?

Well, the plan mainly offers AAA type of asset allocation. Means it is some kind of computer generated model which is Algorithm based Asset allocation (AAA). This system is developed by testing over 5000 potential scenarios in the Indian Equity market and bond markets according to Economic Times.

Initially there will be higher exposure to equity and later on near the maturity there will be higher exposure to debt and money market instruments. The scheme is basically of two types – Plan A & B.

Minimum age at entry is 7 years and Maximum age at entry is 60 years. Policy is available in 10, 15 and 30 years. Minimum annual premium is Rs.24,000 and Maximum annual premium is Rs.74,000.

My Opinion -

Well, don’t go for this ULIP Plan as it is really costly. I will still advise you to follow the simple financial planning combination to build wealth as well as protect your life and that is,

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

The above is the simple solution to build wealth. What I don’t like about this plan is, peanut size of life insurance cover provided by it. Means the plan provides approximately 10 times annual premium than the annual premium. Thus, if your annual premium is Rs.50,000 than your life cover will be Rs.5 lakh only which is a peanut size in comparison to the life cover offered by the term life insurance plans.

Another thing I don’t like about this plan is, I have personally read the entire product brochure of this plan but well they have nowhere mentioned that how much various charges they will charge for investing in this product.

I mean how much will be premium allocation charge, mortality charge, fund administrative charge and fund management charge. Thus, this is a highly opaque policy and investors should strictly avoid this policy as we don’t know the various charges associated with this policy.

Mutual funds have 0% Entry load and Exit Load (After 365 days of exit) and that’s why equity mutual funds are still the best best to build the long term serious wealth.