With the launch of Smart ULIP, now SBI Life Insurance too has joined the bandwagon of ULIP market. Similar players in the market include LIC jeevan Varsha, ICICI Return Guarantee Fund, IDBI Fortis Bondsurance and Birla Sun Life Platinum Plus. You can read my take on those policies by following the links mentioned for each of those. Now, here is a quick review of SBI life Smart ULIP.
As usual, first the good things about this product:
- The Smart ULIP product provides NAV guarantee that is the highest of 168 fortnightly NAVs during first seven years or NAV at maturity, whichever is higher.
- In case of the unfortunate event of the death of the insured during the policy term, the nominee receives the higher of fund value or sum assured.
- Shorter premium paying term (3 or 5 years).
- Tax benefit on both premiums [U/s 80C] and maturity amounts[U/s 10(10D)]
- Investment is managed by SBI Life – policy holder need not panic in volatile market
Now the bad:
- Short term – just 10 years!
- Too many charges
- Premium allocation charges : 15% in 1st yr, 5% for next 2-4 yrs for 3-5 yrs terms respectively.
- Admin charges – Rs 60/- per month for full term.
- For first three years, annual administration charges of Rs 5 per 1000 of sum assured.
- Fund management charge 1.5% pa. Fund management charge can be increased to 2.5% pa
- Mortality charge levied on 1st day of each policy month.
For more details on this product check the brochure and see the benefit illustration on their site.
This product may appear to be better than other ulip products in the market but not better than a combination of mutual funds with term insurance. I still suggest you folks not to combine insurance with investment. Invest of specific products for each purpose and reap the best benefits from each of those. I know many of you may not agree with me, again it boils down to individual requirement and the phase at which an individual looks at these products. Whatever the case may be, I welcome your comments and suggestions.