For any adult, working or retired, a steady source of income holds incredible importance. Since a vast majority of people work long hours a day to generate this income, it is always a welcome scenario to earn a small yet significant amount of sum simply by investing in a promising monthly income scheme. To this end, Post Office Monthly Income Scheme (POMIS), Senior Citizen Savings Scheme, Pradhan Mantri Vaya Vandana Yojana (PMVVY) and Systematic Withdrawal Options in Mutual Funds are some great alternatives, especially when one is comfortable investing in a government-backed scheme.
However, if you tend to rely more on a commercial bank for your investment you will be rather attracted by the SBI Smart Income Project, the flagship fixed income plan offered by the largest PSU Bank in India. Some other SBI Monthly Income Schemes include SBI Debt Hybrid Fund (earlier known as SBI Magnum Monthly Income Plan) or SBI Senior Citizens Savings Scheme.
It is essentially a plan that offers dual benefits of a life cover as well as regular cash flow. At its core, it is a participating traditional plan, with the much-desired flexible policy term options complete with regular annual payouts for the tenure.
As you may have come to guess, the SBI Smart Income Project helps you meet various financial obligations, while also offering financial cover for the family. Some of the most prominent aspects of this scheme are –
Maturity benefit in a lump sum
Freedom to choose riders to customize coverage
In case of the death of the investor during the policy terms, the death benefit offered is –
Sum Assured on Death + Vested Simple Reversionary Bonuses + Terminal Bonus
105% of the Total Premiums Paid, whichever, is higher!
For 7 years policy term – multiple of the annualized premium is 5 times for all ages at entry.
For 12/15 years policy term – multiple of the annualized premium is 10 times when age at entry is less than 45 years, and it is 7 times when age at entry is 45 years or more.
If the investor is alive and well, when the policy matures, they receive annual payouts over the period of 15 years after maturity, wherein each payout equals 11% of Basic Sum Assured.
In this case, the first instalment must be paid at the end of the first year during the payout period. Here, the investor is also entitled to receive (at maturity of the policy)-
The investor can also choose to receive the benefit as a lump sum, which is inclusive of
In case of death of the investor during the payout period, the benefits are transferred to their nominee or the legal heir.
For any investor, during the policy term, a Vested Simple Reversionary Bonuses gets accrued, which is essentially a percentage of the basic sum assured.
The Reversionary Bonus is confirmed on the basis of investment returns, expenses & other factors, while the Terminal Bonus is paid on maturity, surrender or death during the policy term or at maturity of the policy.
This value can be assimilated on payment of a minimum of 2 full policy years’ premiums under 7 years policy term and that of 3 full policy years’ under 12/15 years policy term.
Under this policy, you can avail tax benefits as applicable under the Income Tax Act, subject to amendments from time to time.
The investor can opt for one or more of the following riders if they agree to pay additional rider premium.
Accidental Death Benefit Rider
Accidental Total and Permanent Disability Benefit Rider
Criti Care 13 Non Linked Rider
In order to invest in the SBI Smart Income Project, an individual must adhere to the following terms –
For 7 years policy term – The age of the buyer must be between 11 and 58 years.
For 12 years policy term – The age of the buyer must be between 8 and 53 years.
For 15 years policy term – The age of the buyer must be between 8 and 50 years.
At the time of the maturity – The age of the buyer must be between 18 and 65 years.
For the policy tenure of 7 or 12 years, the Premium Paying Term will be equal to policy tenure.
For the policy tenure of 7 or 12 years, the Premium Paying Mode can be annually, semi-annually, quarterly & monthly
For the policy tenure of 7 or 12 years, the Sum Assured is Rs. 1 Lakh.
A Freelook Period of 15 or 30 Days is offered from the receipt of the policy (for Distance Marketing Channel)
A Grace Period of 30 Days (15 Days for Monthly Mode) is offered, for the policy tenure of 7 or 12 years.
We hope that you now have a fair idea of the SBI Monthly Income Scheme, its features and benefits as well as its eligibility criteria. If you are looking forward to making a long term investment with guaranteed returns, this might prove to be an ideal pick for you.
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