SIP with insurance is getting popular these days. People do not generally associate Mutual Funds with Insurance and there are still some time before this product is widely accepted in the market.
There are few AMC’s which are providing Mutual Fund with Insurance, namely Nippon, ICICI & Birla Sun Life. It is good for people who want to increase their insurance cover while benefiting from the return in growth from Mutual Funds
There are many riders to this scheme and all terms and conditions need to be carefully studied before investing in this scheme
We were surprised to learn that In case of default in payment of two consecutive monthly / quarterly / yearly SIP installments or four separate occasions of defaults during the tenure of the SIP duration will lead to cancellation of the Insurance cover though the units will be intact in your account.
The minimum tenure is for 36 month and you can choose monthly, quarterly or yearly payment as per your convenience
It also has an exit load of 2% at the time of writing this article, please do due diligence before buying into the scheme
Let us take a brief look into how the insurance cover comes into effect:
1st year: The cover is 10 times the monthly SIP instalments
2nd year: The cover is 50 times of the monthly SIP installments
3rd year: The cover is 100 times of the monthly SIP installments
Our research analyst and financial advisor would be glad to assist you in case you are interested in this product. All products have its plus and minus and it totally depends upon your requirement and investment objective to avail the scheme or not