SIP Insure is nothing but life insurance cover given with the monthly installment. The SIP give insurance option just like ULIP, but here is no charges for your insurance cover. The insurance cover not offer individual but its group cover.
The basic idea is to get you to remain invested & use SIP as a long term investment.
Only Three fund house provide sip insurance facility. Reliance SIP Insure, Birla SL Century SIP & ICICI Pru SIP Insure
Snapshot of SIP Insure Plan
|Reliance SIP Insure||Birla Century SIP||ICICI SIP Insure|
|Insurance Cover||Amount equal to balance of unpaid SIP installment. ||Year 1 : 10 time
Year 2 : 50 time
Year 3 : 100 time of monthly installment||Year 1 : 10 time
Year 2 : 50 time
Year 3 : 100 time of monthly installment|
|Maximum Cover||10 lakh||20 lakh||20 lakh|
|Minimum SIP Amt||1000||1000||1000|
|Min Tenor||3 year||3 year||3 year|
|Waiting Period||90 days||From 1 st installment||From 1 st installment|
|Exit Load||2 % If withdrawn before completion of SIP tenor||2% withdraw before 6 month
1% withdraw before 1 year
NIL thereafter||1% withdraw before 1 year
|Entry Age||18-45 year||18-46 year||18-46 year|
|Max Age for Life Cover||55 year||55 year||55 year|
|SIP discontinue after 3 year||Insurance cover stop||Insurance available upto unit alloted at the start of each year, subject to 100 time monthly installment||Insurance available upto unit alloted at the start of each year, subject to 100 time monthly installment|
SIP Insure available with following Fund House
Reliance SIP Insure facility is an add on feature of life insurance cover under Group Term Insurance to individual investors opting for SIP in the designated schemes.
Reliance SIP Insure provides free life insurance cover to investors at no extra cost. In the unfortunate event of the demise of an investor during the tenure of the SIP, the insurance cover will take care of the unpaid installments.
Amount of Life Insurance Cover Available
The Life Insurance Cover under ‘SIP Insure’ facility will be enhanced as per the following clauses;
An amount equivalent to the aggregate balance of unpaid SIP installments, subject to a maximum of Rs.10 lakhs per investor across all schemes / plans and folios will be invested in the Nominee’s account.
The amount of life insurance cover shall be invested in the Nominee’s account in the same scheme under which the deceased investor has enrolled for SIP Insure at the applicable price based on the closing NAV on the date on which the cheque for insurance claim settlement is received by the AMC from the insurance company, subject to completion of requisite procedure for transmission of units in favour of the nominee.
Reliance SIP Insure – How does this work?
· An investor does a monthly SIP of Rs.10,000 for 5 years in Reliance Growth Fund
· If he dies after a period of 3 yrs, then his Sum Assured= Unpaid SIP installments= 2 yrs ( 5 yrs-3 yrs) X 12 months X 10, 000 = Rs 2,40,000
This amount will be paid by Life Insurance Company to SIP investors nominee account with Reliance Mutual Fund and will be invested in Reliance Growth Fund (in the same scheme in which the deceased has earlier invested)
The insurance cover shall cease upon occurrence of any of the following:
· At the end of mandated Reliance SIP Insure tenure. i.e., upon completion of payment of all the monthly installments as registered or till attaining 55 years of age whichever is earlier.
· Discontinuation of SIP installments midway by the investor i.e., before completing the opted SIP tenure /installments or till attaining 55 years of age, whichever is earlier
· Redemption / switch-out of units purchased under Reliance SIP Insure before completion of the mandated SIP tenure / installments or till attaining 55 years of age, whichever is earlier
· In case of default in payment of two consecutive monthly SIP installments or four separate occasions of such defaults during the tenure of the SIP duration chosen or till attaining 55 years of age, whichever is earlier
Note -There is no provision for revival of insurance cover, once the insurance cover ceases as stated above
· There will an Exit Load of 2%, if the accumulated units acquired or allotted under Reliance SIP Insure are redeemed or switched out or the SIP Insure is discontinued or it is defaulted before the maturity of committed SIP Insure tenure or before completion of 55yrs of age whichever is earlier as opted in the respective scheme either by the SIP-Insure unit holder or by the nominee, as the case may be.
Designated Schemes in which Reliance SIP Insure will be offered
· Reliance Growth Fund – Retail Plan
· Reliance Vision Fund – Retail Plan
· Reliance Equity Opportunities Fund – Retail Plan
· Reliance Equity Fund – Retail Plan
· Reliance Equity Advantage Fund- Retail Plan
· Reliance Regular Savings Fund – Equity option
· Reliance Regular Savings Fund – Balanced option
· Reliance Banking Fund – Retail Plan
· Reliance Media & Entertainment Fund
· Reliance Diversified Power Sector Fund – Retail Plan
· Reliance Natural Resources Fund – Retail Plan
· Reliance Quant Plus Fund – Retail Plan
· Reliance Tax Saver (ELSS) Fund
· Reliance Long Term Equity Fund
· Reliance Infrastructure Fund- Retail Plan
· Reliance Small Cap Fund
The Birla Sun Life Century SIP (Insure) provides an insurance cover between 10 and 100 times the SIP investment made by the investor. For example, if an investor has a monthly SIP of Rs 5,000, he will be entitled to an insurance cover of Rs 50,000 in the first year. In the second year, it goes up to 250000 and 500000 from third year onwards.
No additional charge for this cover, don’t make the mistake of thinking that these are like unit linked insurance plans (Ulips). If you start normal SIP and one Century SIP . Your fund grow similar.
The benefits of Birla Century SIP plan are as follows:
• Wide Coverage: 18 years to 46 years for investor age group
• Cover continues till 55 years
• No medical check-up only a signed declaration of good health from investor
• The minimum investment monthly SIP amount is Rs. 1000 per month.
• Entry load of 2.25% and exit load of 2% upto 3 years and Nil from 3 year onwards.
• If SIP discontinues within 3 years of 1st installment: Life Cover ceases, If SIP discontinued after 3 years of 1st installment: Life Cover continues at fund value subject to maximum of 100 times monthly SIP value.
ICICI Mutual Fund has introduced SIP Insure facilitating both investment and life insurance cover for investors.
“SIP Insure is an add-on, optional feature available for equity schemes. To benefit investors further, the cost of insurance will be entirely borne by the Asset Management Company. No additional documents or medical tests are required; only certain details are to be filled up
This feature is similar to Birla Century SIP
The feature will have a uniform insurance cover.
First year 10 time the monthly SIP
Second year 50 time the monthly SIP
Third year onward 100 time the monthly SIP
Maximum cover upto 20 lakh per investor
For Example, if an investor has a monthly SIP of Rs 5,000, he will be entitled to an insurance cover of Rs 50,000 in the first year. In the second year, it goes up to 2,50,000 (50 times) and 5,00,000 (100 times) from third year onwards.
No additional document or medical test are required, only certain detail are to fill up
Minimum entry Age 18 years & Maximum entry age 46
Cover continue upto age of 55
If SIP Insure discontinues, the Insurance cover would be as follows:
- SIP Insure discontinue before 3 years : Insurance cover stop immediately.
- SIP Insure discontinue after 3 year : Insurance cover equivalent to the value of unit allotted under SIP Insure investment at start of each policy year, subject to maximum of 100 time the monthly installment, capped at the maximum of 20 lakhs.
SIP Cease under following conditions :
- The end of tenure i.e., upon completion of 55 years of age.
- Redemption / switchout (fully or partly)
Entry / Exit Load
Entry load : NIL Exit Load : 1% if redeemed within 1 year, NIL thereafter
Minimum SIP : 1000
Benefit to Nominee : (in case of Pre mature death)
Fund value + Life cover equivalent upto 100 time the monthly SIP Insurance Installment third year onwards.
Following is the list of schemes where the SIP Insure facility will be applicable:
ICICI Prudential Infrastructure Fund, ICICI Prudential Dynamic Plan, ICICI Prudential Focused Bluechip Equity Fund, ICICI Prudential Tax Plan, ICICI Prudential Discovery Fund, ICICI Prudential MidCap Fund, ICICI Prudential Top 100 Fund, ICICI Prudential Top 200 Fund, ICICI Prudential FMCG Fund, ICICI Prudential Balanced Fund, ICICI Prudential Technology Fund, ICICI Prudential Services Industries Fund, ICICI Prudential Equity & Derivatives Fund – Volatility Advantage Plan, ICICI Prudential Indo Asia Equity Fund, ICICI Prudential Banking & Financial Services Fund, ICICI Prudential Child Care Plan – Gift Plan
My personal View about this Product : I am using Birla Century Plan for my investor. Reliance SIP insurance is expensive plan (exit load 2% whenever you exit before maturity), and personally not like ICICI pru plan it’s copy of Birla & may be they pay claim properly or not.