Private sector SBI Life on Monday launched a variable plan, which aims to provide stable returns to investors.
The variable non-participating insurance plan — Flexi Smart Insurance — would provide safety for customer’s investment and stable returns to risk-averse customers having preference for non-market linked plans, SBI Life said in a statement.
A customer would have to pay a minimum premium amount of Rs 1,500 per month to subscribe to the plan, with an option to pay premiums at yearly, half-yearly, quarterly or monthly.
The product would give investors an option to change the sum assured and flexibility of premium payment and interim and additional interest rates.
“We will continue to strengthen our simple and smart series so as to cater to the protection and savings needs of multiple customer segments with varied risk— appetite,” SBI Life MD & CEO M.N. Rao said.
The premiums paid by the policyholder will earn an interim interest rate of 7 per cent during the financial year 2011-12 and the additional interest rate would be declared at the end of the financial year.
In November last year, the IRDA had barred life insurance companies from selling Variable Insurance Products (VIPs), which have greater flexibility over traditional plans, as unit-linked products (ULIPs), which invest major portion of money in capital markets.
VIPs, earlier known as Universal Life Products (ULPs), have greater flexibility over traditional plans and insurance companies used to mix the traits of ULIPs into VIPs.
SBI Life is the first private life insurer to launch a VIP and it becomes the second VIP to be available in the market after LIC Bima Account 2.
During the last financial year 2010-11, SBI Life Insurance posted a 33 per cent increase in net profit at Rs 366 crore, up by 33 per cent. Its total premium collection grew 28 per cent to Rs 12,912 crore.
As of May 2011, SBI Life is the largest private sector players with a market share of 19.84 per cent. In the life insurance market it has a total share of 4.83 per cent.
SBI Life Insurance is a joint venture between State Bank of India and BNP Paribas, wherein SBI owns 74 per cent and BNP Paribas the remaining 26 per cent.