SBI Life Smart Champ Insurance Review – Is this Child Plan worth for your Kids future?
SBI Life Smart Champ Insurance Plan is a non-linked insurance plan launched to protect your child’s future educational expenses. This plan will also cover the life of the insurer and at the end years your kid will get lump-sum amount in 4 installments with final terminal bonus if any. In this policy after every year bonus will be accumulated which will be payable as per the policy payment terms. This plan also cover accidental total permanent disability (ATPD) throughout the term of policy. Let’s review SBI Life Smart Champ Child Insurance Plan and find out how much this plan is really beneficial for your kid.
SBI Life Smart Champ Insurance Plan Key features
- Guaranteed return is there after your kid reach 18 years.
- Child age should be between 0-13 years
- The benefits will be paid in 4 installments as 25% of sum assured after 18th, 19th, 20th and 21st year.
- Accured bonus and final bonus if any will be paid with the final installment.
- One can buy single premium (SP policy) or limited premium payment term (LPPT policy)
- Under waiver of due premium non need to pay future premium. In that future benefits will be calculated as per premium paid
- Basic sum assured min = 1 lakh and max = 1 crore
- Policy term will be 21 – your kids entry age
- Premium paying term will be 18 – child’s entry age
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There are many more facts to read and understand. Instead of writing everything here its better to read the brochure for more details. But I don’t agree those details are much important, rather you should check out the return or benefit actually your kid will get with this investment. To understand the actual return on this investment let’s explain this child plan with an example.
Return from SBI Life Smart Champ Insurance Plan
Let’s say Mr. X has invested 10,00,00 ( 10 lakh) in this plan and his child’s age is 6 years. So the policy data will be as below
- Sum Assured = 10,00,000
- Policy Term = 21 – 6 = 15 years
- Premium Paying Term = 18 – 6 = 12 years
- Yearly Premium = 82,598 including Service Tax (I used Sbilife premium calculator)
So at the age of 18, 19, 20 and 21st you will get 2,50,000 each time. So you will get your invested 10 lakh. But in 12 year tenure you have already paid = 12 X 82,598 = 99,1176 (Almost you paid your sum assured amount).
Now with the last installment you will also get bonus amount accumulated after every year. If you consider 4% bonus rate you will get around 1,08,300. I have used that calculator and found below data for bonus details.
Should I buy SBI Life Smart Champ Child Insurance Plan
Now in the above illustration they mentioned return as 4% and 8% which is completely assumption. We have already reviewed lot insurance cum savings plan which in long term hardly able to meet the inflation. In that situation you are getting back your money only. And from insurance point of view 10 lakh is nothing if you consider your child’s education cost after 15 years from now. Only by paying the money in last 4 installment a ULIP plan can’t be a different package for your child. If you really want to plan for your child’s future than go for 1 crore pure term insurance plan and then start investing money in Mutual funds or SIP. Even typical post-office schemes and Bank FDs also more reliable than these products.
By seeing the requirement you can even open a PPF account in your child’s name and accumulate money for 15 years. You can earn the maximum interest benefit in PPF and this is completely out of income tax burden. By opening a PPF account early you will really gift your kid a beautiful gift.
Now it’s up to you. Share your valuable feedback and experiences if any regarding this policy.