SBI Life Child Plans

SBI Life Insurance Company is a joint venture between the State Bank of India and BNP Paribas Cardif. While the former Indian counterpart has a stake-holding of 74% of the company, BNP Paribas Cardif has a total holding of 26% of the company. According to the Brand Equity and Nielsen Survey conducted by the Economic Times in 2013, SBI life Insurance Company was voted ‘The Most Trusted Private Life Insurance Brand 2013’. The company works on its mission to emerge as the leading company which offers a comprehensive range of insurance products to customers and to ensure high standards of customer satisfaction through service efficiency. Being true to its mission, the company offers a wide range of products which include both traditional as well as unit linked plans for conservative as well as risk-taking individuals respectively.

SBI Life Child Plans

SBI Life Insurance Company currently offers two types of child insurance plans. One is a traditional plan while the other is a Unit Linked Insurance Plan. Let us take a look at each of these SBI child plans with a detailed understanding of the plan features and benefits.

Brief Overview of SBI Child Plans 

SBI Life Smart Champ Insurance Plan

This is a traditional participating child plan with the following features:

• The SBI child plan participates in the profits of the company through earning bonuses which are given in the form of Simple Reversionary Bonus and Terminal Bonus.
• There is an inbuilt Accidental Total and Permanent Disability Rider and Waiver of Premium Rider under the SBI child plan providing an enhanced coverage
• Guaranteed Smart Benefits are paid under the SBI child plan for four years after the child crosses 18 years of age and attains 21 years. The benefit is payable at the rate of 25% of the Basic Sum Assured chosen by the policyholder and 25% of the accumulated Simple Reversionary Bonuses. The benefits are paid in the last four years of the SBI child plan making it a money back type of plan.
• On maturity, the last instalment of the above mentioned Guaranteed Smart Benefits, vested bonuses and Terminal Bonus, if any, is paid to the policyholder of the SBI child plan.
• On death or disability of the insured whilst the SBI child plan is in its continuance, a lump sum amount is paid to the nominee which will be 1.10 or 1.25 of the Single Premium paid or 5 / 7 / 10 times the annual premium paid depending on the age of the insured and the term of the SBI child plan. Moreover, all the future premiums will be waived off and paid by the company while the SBI child plan continues. The Guaranteed Smart Benefits will be payable as and when they fall due and the SBI child plan will also earn bonuses
• The discounted value of the Smart Benefits under the SBI child plan may be availed by the nominee in the last 3 years of the premium payment
• Rebates in premium are allowed for higher coverage levels of Rs.2 lakhs and above under this SBI child plan
• Loans can be availed under the SBI child plan which should be a maximum of 90% of the Surrender Value

Eligibility Details

Sample Illustration

The following table shows a sample illustration of the SBI child plan.

SBI Life Smart Scholar

A unit linked child plan which promises the following features and benefits:

• The parent is the life insured but the SBI child plan is taken for the benefit of the child
• Premiums can be paid either in lump sum under the Single Pay option or for a limited period under the Limited Pay option of premium payment of this SBI child plan.
• When the SBI child plan completes its tenure, the fund value on the date of maturity is what the policyholder is entitled to. The policyholder may exercise his choice to receive the benefit at once on maturity or if he wishes to remain invested with the company, the proceeds can be withdrawn in instalments spread over 5 more years after maturity
• When the insured person who is the parent faces death within the term of the SBI child plan, the Sum Assured is paid to his nominee which should not be lower than 105% of the premiums paid during his lifetime. There will be no requirement of continuing the premium payments because the company will do so on part of the policyholder and the fund will continue to grow. When the term of the SBI child plan completes, the fund value in the fund account will be again paid to the policyholder’s nominee
• Additional Loyalty Additions are paid under the SBI child plan after specified intervals. The Loyalty Additions are calculated as 1% of the average fund value on the first day over 24 months prior to the date of calculation.
• There is an option to choose from among 7 funds for investment of the premium under this SBI child plan. The funds include Equity Fund, Top 300 Fund, Equity Optimizer Fund, Growth Fund, Balanced Fund, Bond Fund and Money Market Fund
• One partial withdrawal which will be free is allowed every year under the SBI child plan provided the minimum amount is Rs.5000 and maximum is 15% of the fund value
• Premium redirection facility is allowed from the second policy year to redirect future premiums into a different fund than that chosen at the time of policy inception under this SBI child plan
• Switching between funds is also allowed with two free switches every year
• There are inbuilt riders under the SBI child plan. The Premium Payor Waiver Rider waives the future premiums when the insured dies during the tenure of the plan and the Accidental Benefit Rider with total and permanent disability benefit provides an additional lump sum amount in case the insured suffers accidental death or total and permanent disability.

Eligibility Details

Applying for a SBI Child Plan from the company:

Online

The company offers specific SBI child plans which are available online only. The customer only needs to log into the company’s website, choose the required SBI child plan, choose the coverage and provide the details. The premium will be determined using the filled details. The customer then needs to pay the premium online through credit card, debit card or net banking facilities and the policy will be issued

Intermediaries

SBI child plans which are not available online can be purchased from agents, brokers, banks, etc. where the intermediaries help with the application process.

When Should a Child Plan be Taken?

As per the insurance dictionary, a child plan is an endowment policy where the parent is the policyholder and the child is the beneficiary. A child plan can be a money back plan, i.e. parts of the sum assured is received at various points in the child’s life like her school admission, college admission, marriage, etc. Alternatively, a child plan can be a typical endowment plan where a lump sum amount of money is received at a specific juncture of the child’s life and used to pay the bills at that time (college admission, marriage, etc).

A SBI child plan is nothing but an endowment policy that helps you in meeting the expenses related to your child’s education and well-being. A child plan can be converted into a money back plan and portions of the sum assured can be received at different milestones of the child’s life. A SBI child plan helps you in planning your finances wisely so that at no one point in life are you financially over-burdened. You can save over a period of time, in small amounts and still build up a fund large enough to face every testing situation with ease. So start saving early and you will have more time to create the desired fund.

How early can I buy a SBI child plan?

Most child plans are available for children aged 3 months or above. So as soon as your daughter or son turns 3 months, you can purchase the SBI child plan. There are many advantages of buying a SBI child plan that early, as you can start saving and also make provision for each and every milestone of your child’s life. In India, kids begin to go to school at 3 years of age. So, if you buy the SBI child plan when the child is 3 months, by the time she is 3 years and ready to start school, you will also have the funds ready to pay for the school admission fees, something that wouldn’t have been possible had you bought the fund when she was 5.

The same holds true if you are planning to save for their higher studies. It makes sense to start early. That’s why all of SBI Life child plans allow the parent to take the plan when the child is less than 1 year old. Such an investment strategy allows the parent to build up a significant corpus by the time the child is ready for college. Parents can also use the child plan to pay for marriage expenses, the second thing that will require them to plan and invest well for the future.

What is the maximum till which a SBI child plan can be purchased?

You can buy a SBI child plan for any child till the age of 17. If your son or daughter is 18 or above, you can no longer get a SBI child plan for them.

What is the ideal time to buy a SBI child plan?

According to experts, the costs of education will continue to soar, just like they have in the recent past. An MBBS course in an Indian university cost just about Rs.2 lakh 20 years ago. Today it costs between Rs. 45-70 lakh. So one can only imagine how much the figures would be in another 20 years! Your child may decide to even go abroad when he is 15 years old, and then it would be very difficult to arrange the funds. So as we can see, the future education costs of children cannot be predicted and so as a parent you need to have every possible provision. As a result, a SBI child plan should be bought as early as possible to set up a healthy fund that would suffice all the demands of your child’s educational career.

Do not wait till it’s very late. If at 15 your son announces he wants to go to the US the following year, you will be left in a lurch arranging the funds. So since the future cannot be predicted, save when you can and keep the finances ready. A SBI child plan would also secure your child’s future in your absence and since death too cannot be predicted, keep the plan ready from the earliest time possible.

SBI Life Child Plans - FAQ

1. How to pay premium for a SBI child plan? What are the modes of payment available?

There are 10 modes to pay your SBI Life Insurance premium namely:

• Direct Remittance At SBI Life Branch By Post Or Courier
• Electronic Clearing Service (ECS) – Mandate
• Direct Debit
• Standing Instruction On Your Credit Card
• Online Payments
  • Through State Bank Group ATMs
  • Payment Through Visa Bill Pay.Com
  • Online Payment Of Premium Through SBI Life Website
  • Si-Eft For State Bank And Associate Banks’ Account Holders
  • Payment Through Point Of Sales (Pos) Terminals At Select SBI Life Branches
  • Payment Through Easy Access Mobile Application
  • Pay Premium In Cash At Authorized Collection Centres
  • NACH (National Automated Clearing House)

NACH is a newly launched service that works on the same principle as that of ECS, which requires filling in a form and getting registered before availing this facility.

2. How can I check policy status for SBI Life child plans?

For checking your policy status online, login to e-portal. You need to enter customer ID, date of Birth and policy number. The details of the SBI child plan along with the status is displayed on the next screen.

3. What is the policy renewal process for SBI Life child plans?

Renewal of SBI child plan can be done by the following modes:

• Online
• Through SMS
• Through SBI Brach
• By Cash

For renewal process, after login into your account, click on the ‘Renew Policy’ tab to proceed with premium payment for the SBI child plan.

Alternatively, you can renew the SBI child plan by using the kiosk in the SBI ATM and select the option for renewal process

4. What is the company’s process to settle claim for SBI Life child plans?

The procedure for settling claim through SBI life Insurance requires intimating the nearest branch by submitting the list of documents as specified in the website for the SBI child plan. After the documents are verified, the claim is settled as soon as possible. In case one requires additional help or further clarifications, one can write to claims@sbilife[dot]co[dot]in

5. What is the policy cancellation process for SBI Life child plans?

The policy cancellation process for a SBI child plan requires you to submit a duly filled surrender form along with relevant documents in the nearest SBI branch in your city. Upon receiving and verifying the documents, the SBI child plan is deemed cancelled as per bank accounts record. The premium refund is calculated on NAV value prevailing at the current market rate, if you submit the policy before 3:00 PM, else next day’s NAV value is applicable.