SBI Life has launched a product called as Saral Sanchay which is yet an addition to the crowded space of life insurance clubbed together with savings. The plan is essentially for individuals, which has features of a variable insurance plan that is non-linked and non-participating.

This plan can be purchased by individuals. SBI Life has restricted the entry to under 18 years with those up to 60 years can avail of the plan.

Here are some of the quick features of the plan.

• Saral Sanchay offers twin benefits of life insurance as well as savings plan
• SBI Insurance has fixed the Floor rate of 1% per cent per annum. This is to be paid throughout the policy term.
• Partial Withdrawal - In case of emergency you can withdraw amounts partially from the 6th year onwards.
• As mentioned earlier the Minimum age for entry is 18 and maximum is restricted to 60 years.

Plan Benefits

Death Benefit

In the event of death during the policy term, the insurance company will pay highest of A, B, C and D. Consider what is A, B, C and D below.

A is the sun assured, while B is 105 per cent of the total premiums that have been paid. C would differ slightly from B in the sense that it would include the the total premiums and the top-up premiums paid till the date of death. This will be compounded at 1 per cent per annum. D is nothing but the balance in your IPA as on date of maturity.

Maturity Benefit

In case there is no death during the policy, SBI Life will pay the higher of A or B, where, total premiums paid including top-up premiums paid till the date of maturity compounded at 1 per cent p.a. less partial withdrawals made, if any. Balance in your IPA as on date of maturity.

It's important for the above to take force that the policy is still in force.

Tax Benefits

Tax benefits can be availed under Sec 80 C of the Income Tax Act towards the premium that has been paid.

It's also important to remember that as per the present guidelines the premium paid during the financial year should exceed10 per cent of the actual capital sum assured

Tax exemption under Section 10(10D) of Income Tax Act, 1961will be subject to premium payable not exceeding 10% of the actual capital sum assured in any of the years during the term of the policy.

Charges involved

• There will be a premium allocation charge of 20 per cent for the first year
• Second year onwards it would be Nil

Partial withdrawals

• Allowed only for in-force policies
• Allowed from 6th policy year onwards

Surrender policy

• During Lock-in period life cover will cease and IPA will continue till end of lock-in or revival whichever is later
• Surrender value = Balance in IPA is payable at end of lock-in or revival period, whichever is later.

Conclusion

In this policy, maximum sum assured is Rs 200,000 which may not be sufficient for the policyholder considering the present levels of inflation. Individuals who are considering this plan should note that there is no liquidity during the first five years of the contract.

The policyholder will be able to withdraw the invested amount completely or partially till the end of the 5th policy year.

Overall, it's just like so many other policies around. Invest if you need life insurance cover.

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