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The Setubandhan Plan |
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AN INSURANCE PLAN FOR NRIs - PRESENTING THE SETUBANDHAN PLAN |
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Mr. Sanjeevan is working as a financial consultant in the middle-east. His wife Asha and his 3 year old daughter Kalki are staying in Chennai. Mr. Sanjeevan is a non resident. He sends his money to his family every month. Due to the various tax principles that are attracted to a resident Mr. Sanjeevan is very careful so as to not lose his status as a non resident. However as fate may have it in an accident Mr. Sanjeevan passes away. Along with Mr. Sanjeevan all the dreams of Asha are also shattered. Her mind is plagued by various questions like: |
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- Who will protect her family?
- Where is the money going to come from?
- What will happen to Kalki? Her school fees, tuition fees, fees for the dance class, her marriage etc.
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The future is full of uncertainty devoid of hope, full of worries and trauma. Over and above the emotional loss the financial loss loomed large ahead in front of Asha. |
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In case if we were to rewind the whole scenario, then what could have been done differently? The accident could not have been averted as it was fatalistic, however the additional worries over and above the emotional trauma could have certainly been avoided. The key here is to have taken an insurance policy. |
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Today, amidst a plethora of insurance schemes, there are plans which are offered exclusively for non resident Indians . Once such plan is the "Setubandhan Plan" offered by SBI Life Insurance Company. This is an investment cum life insurance plan which serves as a bridge between the NRI staying abroad and his near and dear ones back in India . A glimpse of the policy is as follows: |
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- Sum assured under this plan is a minimum of Rs.3 lakhs and a maximum of Rs.1 crore.
- The entry age is a minimum of 18 years and a maximum of 60 years. The cover is available till the age of 70 years.
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The salient features of the policy are: |
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- Guaranteed 5% annual returns (simple) on the investment.
- Single Premium payment to be made
- Facility of repatriation at the prevailing exchange rates which provides adequate liquidity
- 15 day free lock in period
- This policy is for a term of 5 years to 10 years
- The premium payable is uniform without regard to the age difference..
- For a sum assured of Rs.1,000 the premium is Rs.1,019 for a 5 year plan and Rs.996 for a 10 year plan.
- Loan facility available with all the branches of SBI and other associate banks based on the surrender value of the policy
- The premium is eligible for tax rebate
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Benefits |
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- Rider benefits for the NRI: Critical illness rider called Dhanwantri supreme, subject to a maximum of Rs.5 lakh. The premium is payable annually and the rate will be valid for 5 years subject to a review thereafter.
- Optional cover for the dependant: Term insurance cover for a dependant living in India subject to a minimum of Rs.3 lakhs and a maximum of Rs.10 lakhs. For the purpose of this policy dependant would mean spouse and parents not above the age of 55 years.
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Surrender benefits |
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- No surrender benefit during the first year.
- 90% of basic premium paid for surrender during 2nd and 3rd year.
- 95% of basic premium paid for surrender from the 4th year.
- No guaranteed addition will be payable for policies surrendered under the 5-year plan.
- In respect of policies with 10-year term, the guaranteed addition to the extent of 50% will become payable for policies surrendered between 6th and 7th years, and 75% in respect of policies surrendered from the 8th year.
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Mr. Sanjeevan ought to have taken such a policy to protect his family against any unforeseen calamity. Such a policy along with the riders would have provided adequate cover for Asha and Kalki. Though the emotional void cannot be compensated, the financial void can be adequately filled by such a policy. |
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