Life Insurance Corporation, LIC is famous for offering a slew of insurance policies to their investors that aid in the growth of even the smallest amount of money invested monthly to a pretty hefty sum at the end of the scheme. LIC SIIP is one such policy that offers an impressive return on your money.
LIC SIIP Plan is a unit-linked non-participating individual life insurance plan. This plan serves as an opportunity that aids in monetizing the investment options offered by the market. The best part about issuing this plan is that you can apply it through offline and online modes. It comes along with four different fund options that you can use to invest your hard-earned money.
Benefits of LIC SIIP plan
- Death Benefit
In the unfortunate event of the death of the insured during the policy tenure, the nominee will be paid as follows:
- If the death takes place before the Date of Risk Commencement
An amount equal to the unit fund value
- If the death takes place after the Date of Risk Commencement
- Basic Sum assured minus the partial withdrawals, or
- Unit Fund Value, or
- 105% of the total premiums that have been received till the date of death minus the partial withdrawals made in the past 2 years
- If the death takes place before the Date of Risk Commencement
- Maturity Benefit
Under the LIC SIIP policy, if the insured survives until the maturity date, the plan assures an equal amount to the unit fund value
- Refund or Mortality charges
If the insured member survives the maturity date, he will be paid an amount that equals the mortality charges apart from the premiums over and above the maturity benefit
Key features of the LIC SIIP Plan
- Guaranteed additions of LIC SIIP Plan
This policy assures guaranteed returns, which is a percentage of the fixed annualized premium. If all the premiums have been paid, the allotted Guaranteed Additions are as follows:
|On Policy Anniversary||Guaranteed Additions|
- Partial withdrawals
The insured can make partial withdrawals from the policy at any time after the fifth year of the policy is completed. Depending on the policy year, from 20% to 35% of the Unit Fund can be withdrawn.
The plan also allows the policyholder to switch among the four types of funds during the policy tenure.
- Settlement option
Under this option, the insured can opt that the death benefit is paid out in installments.
- Surrender Benefit
If there is an emergency, the plan allows the insured to surrender the policy anytime during the term of the policy.
The insured can revive his lapsed policy within three years from the date of the first unpaid premium to the maturity date.
- Free-look period
If the policyholder is not happy with any plan features, he is allowed to cancel the same during the 15 to 30-day long free-look period.
Option Benefit of LIC SIIP Plan- LIC’s Linked Accidental Death Benefit Rider
LIC SIIP policy comes with a single rider that is the LIC’s Linked Accidental Death Benefit Rider. The rider can be opted for at the time of a policy anniversary. However, it should be kept in mind that the outstanding policy tenure needs to be a minimum of 5 years and before the insured turns 65.
Charges applicable under the LIC SIIP Plan:
- Premium Allocation Charge
These charges are subtracted from the premium that is received. The balance is then used to make the Units purchase.
- Mortality Charge
This is the life insurance cover charge, which depends on the Sum at risk.
- Accident Benefit Charge
Deducted at the beginning of each month by cancelling the appropriate number of units out of the available Unit Fund.
- Other Charges
There are certain other charges that include:
- Fund Management Charges
- Partial Withdrawal Charges
- Switching Charges
- Discontinuance Charges
- Tax Charge
- Miscellaneous Charge
Eligibility criteria of LIC SIIP plan
Like other plans offered by LIC, the SIIP plan also comes along with specified eligibility criteria. The table below will allow you to understand the same.
|Minimum age for entry||90 days|
|Maximum age for entry||65 years|
|Maturity age||Minimum: 18 years|
Maximum: 85 years
|Policy tenure||10 – 25 years|
|Premium||Minimum: INR 40,000 per year|
Maximum: No Cap
|Lock-in period||5 years|
|Basic Sum Assured||Age below 55 years: 10 times of annualized premium|
Age above 55 years: 7 times of annualized premium
Working of LIC SIIP plan
As mentioned, LIC SIIP comes in four different types of investment funds. The investor is entitled to invest in any of them as per his choice. As there is no upper limit on the Sum Assured, the policyholder can invest as much as he/ she wants. The policyholder can also opt for paying the installments of the policy on a monthly, quarterly, half-yearly, or even annual basis. The policy term and the premium paying term are similar, which means that if the policy term is 20 years, the premium would be paid for 20 years as well.
Exclusions under LIC SIIP plan:
In cases the insured individual commits suicide within 12 months of policy purchase or from the date of revival of the policy, the nominee will receive the unit fund value available as on the date of intimation of death. As a result of the circumstances, the plan will not provide other coverage and it would be terminated.
Investment fund options in the LIC SIIP plan
The policyholder can choose any of the following fund options available:
|Type of Fund||Investment in Government/ Corporate Debts||Investment in Equity||Risk Profile|
|Bond Fund||Above 60%||Nil||Low risk|
|Secured Fund||Between 45% to 85%||Between 15% to 55%||Low to Medium risk|
|Balanced Fund||Between 30% to 70%||Between 30% to 70%||Medium risk|
|Growth Fund||Between 45% to 85%||Between 40% to 80%||High risk|
Before you Buy
Before you invest in the LIC SIIP plan policy, it is suggested that you visit www.turtlemint.com to further understand the various aspects of the policy. You can also see how the different variables will influence the payout and the premium.
A unique ULIP, LIC SIIP offers the security of insurance along with the advantages of investments. Being a plan with guaranteed additions, it offers you the protection of a long-term and secured payout. In case of an unfortunate incident, the death benefit will be paid out to the nominee, which can be in a lump sum or in installments.
LIC SIIP Plan comes with four different fund options, which include the following:
- Secured fund
- Bond fund
- Growth fund
- Balanced fund
Yes, the LIC SIIP plan offers a grace period. It is a period of 15 days for monthly installments, while for premium payment on a quarterly, half-yearly, or yearly basis, the grace period is 30 days.
The premium paying term under SIIP LIC will be the same as the policy term, that is, a period of 10 to 25 years.
The LIC SIIP policy allows the insured a maximum of 25% of the annualized premium as guaranteed additions.