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Is SBI Life Smart Lifetime Saver Guaranteed?

Milind

Milind Vadjikar  |1205 Answers  |Ask -

Insurance, Stocks, MF, PF Expert - Answered on Oct 15, 2024

Milind Vadjikar is an independent MF distributor registered with Association of Mutual Funds in India (AMFI) and a retirement financial planning advisor registered with Pension Fund Regulatory and Development Authority (PFRDA).
He has a mechanical engineering degree from Government Engineering College, Sambhajinagar, and an MBA in international business from the Symbiosis Institute of Business Management, Pune.
With over 16 years of experience in stock investments, and over six year experience in investment guidance and support, he believes that balanced asset allocation and goal-focused disciplined investing is the key to achieving investor goals.... more
Asked by Anonymous - Oct 14, 2024Hindi
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Sbi life Smart lifetime saver is Guranteed?

Ans: On what parameter, kindly elaborate.
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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Ramalingam

Ramalingam Kalirajan  |8317 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 08, 2024

Asked by Anonymous - May 12, 2023Hindi
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Is SBI Life wealth builder a good plan to invest 2.5 LPA for 7 years. I am 39 yr old NRI
Ans: Investing in SBI Life Wealth Builder may not be the most suitable option for several reasons:

High Charges: The plan incurs various charges, including premium allocation charges, policy administration charges, mortality charges, and fund management charges, which can significantly reduce the overall returns on investment.

Limited Flexibility: The plan offers limited flexibility in terms of premium payment options and withdrawal facilities, restricting the investor's ability to adjust their investment strategy according to changing financial needs.

Complex Structure: SBI Life Wealth Builder has a complex structure with multiple investment options, fund switching facilities, and lock-in periods, which may confuse investors and make it challenging to understand the true cost and benefits of the plan.

Uncertain Returns: The returns from SBI Life Wealth Builder are not guaranteed and are subject to market risks. Given the lack of transparency and high charges, investors may not achieve the expected returns, especially considering the volatility of the market.

Better Alternatives: There are other investment options available in the market, such as mutual funds, PPF, and ELSS, which offer potentially higher returns with lower charges and greater flexibility. Investors should explore these alternatives before committing to SBI Life Wealth Builder.

Overall, due to its high charges, limited flexibility, complex structure, uncertain returns, and the availability of better alternatives, investing in SBI Life Wealth Builder may not be the most prudent choice for investors.

..Read more

Ramalingam

Ramalingam Kalirajan  |8317 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Dec 31, 2024

Asked by Anonymous - Dec 29, 2024Hindi
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Sbi life smart previlege plan
Ans: The SBI Life Smart Privilege Plan is a unit-linked insurance plan (ULIP) offering life cover and investment options. Let’s analyse its features, benefits, limitations, and suitability from a Certified Financial Planner’s perspective.

Key Features of SBI Life Smart Privilege
Premium Payment Flexibility

Offers single or regular premium payment options.
You can choose to invest as per your convenience.
Investment Fund Options

Provides the choice of multiple funds, such as equity, debt, and balanced funds.
You can switch between funds based on market conditions or goals.
Partial Withdrawals

Allows partial withdrawals after the 5th policy year for unforeseen needs.
Life Cover

Offers a sum assured to provide financial security to dependents.
Tax Benefits

Premiums qualify for deductions under Section 80C.
Maturity proceeds may also be tax-free under Section 10(10D), subject to terms.
Advantages of SBI Life Smart Privilege
Dual Benefit: Combines life insurance with market-linked returns.
Flexibility: Offers fund switching and top-up premium options.
Professional Fund Management: Funds are managed by expert professionals.
Market Participation: Provides an opportunity to benefit from equity market growth.
Limitations of SBI Life Smart Privilege
High Costs

ULIPs involve charges like premium allocation, fund management, and mortality charges.
These reduce overall returns compared to direct mutual funds.
Lock-In Period

Mandatory 5-year lock-in for ULIPs restricts liquidity.
Early surrender leads to penalties or reduced returns.
Limited Transparency

Returns depend on fund performance, which may not be predictable.
Lower Flexibility in Insurance

Term insurance offers better coverage at a lower cost.
Tax Benefits Caveats

If annual premium exceeds Rs. 2.5 lakh, proceeds are taxable.
Better Alternative: Mutual Funds with Term Insurance
Instead of ULIPs like SBI Life Smart Privilege, consider:

Mutual Funds for Investments

Mutual funds are transparent, cost-effective, and provide better long-term returns.
Choose actively managed funds aligned with your financial goals.
Term Insurance for Protection

Term plans provide higher life cover at a lower premium.
This ensures adequate financial security for your family.
Why Mutual Funds Are Superior
Low Expense Ratios

Mutual funds have significantly lower costs compared to ULIPs.
No Lock-In for Most Options

Except for ELSS, most mutual funds provide liquidity without lock-in.
Customisable Portfolio

You can diversify investments across equity, debt, and hybrid funds.
Higher Returns

Actively managed funds have the potential for better market-linked returns.
Suitability of SBI Life Smart Privilege
SBI Life Smart Privilege may suit individuals who:

Prioritise insurance and investment in one product.
Can handle higher costs and lock-in.
Lack time or expertise to manage mutual funds and insurance separately.
However, for most investors, separating investment and insurance yields better flexibility, transparency, and returns.

Final Insights
While SBI Life Smart Privilege offers dual benefits, the high costs and limited flexibility make it less attractive. Opt for mutual funds for investments and term insurance for life cover. This strategy ensures better returns and financial protection.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

..Read more

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