SBI Life Smart Scholar Plan

What is the SBI Life Smart Scholar Plan?

SBI Life Smart Scholar Plus is a Unit-Linked Insurance Plan (ULIP) designed for parents with children aged 0-17. It is curated to insure your child and earn you market-linked returns through regular premium payment. These premium payments are based on the premium payment term (PPT) selected by you at the beginning of the policy.

• Single Pay: You make a one-time premium payment at the inception of the policy.
• Regular Pay: You pay premiums throughout the term of the policy.
• Limited Pay: You pay premiums for a limited term ranging from 5 years to one year less than the term of the policy.

SBI Life Smart Scholar Plan is one of the best child plans which allows you to invest your money into 10 specific funds. The choice of your fund depends on your risk tolerance and your future financial goals.

Funds Available Under SBI Smart Scholar Plan

The following table lists the funds available under the SBI Smart Scholar Plan:

Features of SBI Life Smart Scholar Plan

There are various SBI Life Child Plans which offer different features and benefits to the parents of young children. The following points summarise the key features of the SBI Life Smart Scholar Plan.

1. Investment and growth

   • Fund Options: The plan allows you to choose between 10 fund options. These fund options range from high-risk, high-reward options like equity funds to low-risk options like debt funds. You can choose between these options as per your risk tolerance and goal for the future.
   • Loyalty Additions: Policies which are in force are provided with periodic boosts by adding additional units to the fund. These
   • Maturity Benefits: When the policy matures, the accumulated fund value is paid to the parent. It is paid to the child if the parent has passed away.

2. Protection features

   • Death benefit: If the parent/policyholder passes away during the term of the policy, a lump sum amount equal to the higher of the sum assured or 105% of the total premiums paid is provided to the child.
     • Death of the child: The parent does not receive anything if their child passes during the policy term. The plan allows them to discontinue it or continue it as per their convenience.
     • Death of both the child and the parent: In case the child and the parent both die during the term of the plan, the plan expires, and the nominee receives all the benefits along with the total fund value.
   • Waiver of premium: In the unfortunate event of the death of the parent during the policy term, all the remaining premiums are paid by the company so that the child can reap the entire benefits of the plan irrespective of the presence of the parent.
   • Accident benefit: This benefit provides you with additional protection for accidental death, which is paid as a lump sum or accidental total and permanent disability, which is paid in 10 equal instalments.

3. Flexibility and liquidity

4. Partial withdrawal: The plan allows you to make partial withdrawals from the fund after your plan has completed 5 years of lock-in period. You can make one free partial withdrawal per year, after which each withdrawal costs ₹100
5. Switching: The policy allows the policyholder to transfer their money between the 10 funds at any moment during the policy term, depending on their requirement. The minimum amount required to switch between policies is ₹5000. You are provided with two free policy switches per year. After that, every switch costs ₹100. Unused switches during a year cannot be carried into the next year. You can, however, make as many switches as you want during the policy's term or in a year.
6. Redirection: After the second year of your policy, you can adjust how your future premiums are spread out between funds. You can change your premium once a year for free. Any further requests will cost ₹100. You can't use free redirections that you don't use.

7. Tax Benefits:

   • Section 80C: Premiums paid are eligible for deductions under section 80C up to ₹1.5 lakh per year
   • Section 10D: The maturity is tax-free provided that the minimum sum assured is equal to or above 10 times the annual premium paid throughout the policy term.

   Criteria	Minimum Requirement	Maximum Limit
   Age at Entry – Parent (Life Assured)	18 years	50 years
   Age at Entry – Child	At birth (0 years)	17 years
   Age at Maturity	The child must be at least 18 years old	- Child up to 25 years; - Parent up to 65 years
   Policy Term	8 years	25 years (child must be 18+ at maturity)
   Premium Paying Term	Single Pay: One-time payment	- Limited Pay: Policy term minus 1 year; - Regular Pay: Full policy term
   Sum Assured	Single Pay: 1.25 times single premium	Limited/Regular Pay: 10 times annualised premium
   Premium Range – Single Pay	Not specified	No upper limit (subject to underwriting)
   Premium Range – Other than Single Pay	- Yearly: ₹75,000; - Half-yearly: ₹50,000; - Quarterly: ₹25,000; - Monthly: ₹5,500	No upper limit

Riders Under SBI Life Smart Scholar Plan

There are no separate riders with the SBI Life Smart Scholar Plus plan. Instead, it comes with built-in extra benefits, including the Accident Benefit and the Premium Payor Waiver Benefit (PPWB). These benefits are an important aspect of the plan for Limited and Regular Pay policies, but they are not available with Single Pay policies.

Additional Policy Details of SBI Life Smart Scholar Plan

• Free Look Period: You get 30 days from receiving the policy document to review its terms. Additionally, you get a 15-day window if the policy is bought through an agent. If you are not satisfied and no claim is made, you can return the policy for cancellation by stating the reason.
• Grace Period: You have 30 days to pay your premiums for the year, half-year, or quarter. There is a 15-day grace period for monthly payments. The policy is still in effect throughout this time. If someone dies during the grace period, the death benefit is paid under the provisions of the policy.
• Discontinuance of Policy (Within Lock-in Period): If premiums aren't paid within the grace period within the first five years, the policy goes into a discontinuation fund. You can bring the policy back to life within three years of the first missed payment. After the lock-in time ends, the fund value is paid out if it is not resurrected. The nominee gets the money if the person dies before it is paid out.
• Discontinuance of Policy (After Lock-in Period): If the policy is stopped after five years, it becomes a reduced paid-up policy. The amount of the policy is lower than the premiums paid. The accident benefit also goes down by the same amount. You can bring the policy back to life within three years. If not revived, lower benefits will apply until maturity or an earlier payout.
• Complete Withdrawal: You can give up the policy at any time. The fund value is paid on the surrender date after the lock-in term ends or right away if the lock-in period has already ended.

Exclusions Under SBI Life Smart Scholar Plan

1. Suicide Exclusion

   If the parent/ policyholder died of suicide during the policy term, the following applies:

   • The nominee is only eligible to collect the fund value, which will be provided on the date of the intimation of death of the parent.
   • Any charges recovered after the date of the death will be added back to the total fund value.
   • The nominee is not entitled to the sum assured in such circumstances.

2. Accident Benefit Exclusions

   The additional accident benefit will not be paid to the nominee if the accident occurs under the following circumstances.

   • Death or disability due to any infection is not covered, except if the infection is caused by an accidental external wound.
   • Death or disability caused by alcohol, solvent abuse, or drug use is not covered, unless taken as prescribed by a registered doctor.
   • Intentional self-inflicted injuries or injuries due to attempted suicide are not covered.
   • Death or disability occurring while involved in criminal or illegal activities is not covered.
   • Events related to war, invasion, civil war, rebellion, riots, strikes, or civil unrest are not covered.
   • Death or disability caused by participation in military, police, paramilitary, or similar forces during service is not covered.
   • Death or disability caused by nuclear radiation, nuclear accidents, or radioactive contamination is not covered.
   • Injuries or death during flying activities are not covered, except when travelling as a passenger on a licensed commercial aircraft.
   • Death or disability caused by hazardous sports or adventure activities such as racing, diving, mountaineering, parachuting, martial arts, hunting, or bungee jumping is not covered.

Conclusion

The SBI Life Smart Scholar plan provides parents with a safety net to secure their child's future, even in their absence. The policy not only provides the policyholder with guaranteed continuity but also with operational flexibility. However, note that the plan is a ULIP, and its performance depends on market conditions. You can also explore the best investment plans to diversify your investment portfolio and invest in a plan that best suits your future goals and risk tolerance.