LIC SIIP is a unit-linked non-participating individual life insurance plan. The plan comes out as an opportunity to monetize the investment options offered by the market. The plan is available offline and online along with four different fund options to invest your hard-earned money. Like all other plans, it also carries eligibility criteria. Let's check the same.
|Minimum entry age||90 days|
|Maximum entry age||65 years|
|Minimum and maximum maturity age||18 years to 85 years|
|Policy tenure||10 years to 25 years|
|Lock-in period||5 years|
|Sum Assured||Age below 55 years: 10 times of annualized premium |
Age above 55 years: 7 times of annualized premium
Guaranteed Additions: LIC SIIP is a unique ULIP that offers guaranteed returns. It will be a percentage of the fixed annualized premium. The guaranteed additions will be converted to units based on NAV of the funds and will be credited to the unit funds. The percentage is as follows.
|End policy year||Guaranteed percentage|
Maturity Benefit: If the insured survives until the maturity date, the plan will offer an amount to the insured which will be equal to the fund value.
Death Benefit: On the death (before the commencement date of risk) during the policy tenure, the plan will pay an amount which will be equal to the unit fund value to the nominee or the beneficiary. On death after the date of commencement risk, an amount higher of basic sum assured or unit fund value or 105% of the total premium is payable.
Refund of Mortality Charges: In case the insured survives till the maturity date and all premiums have been paid, an amount equal to the mortality charges will be payable. The company will not refund the same in case of the surrender.
Partial Withdrawals: You are allowed to make partial withdrawals from the policy anytime after the fifth year of the policy. The partial withdrawal will be in the form of a fixed amount or fixed number of units. In case of a minor, partial withdrawals are allowed after 18 years of age.
Switching: The plan allows the insured to switch among 4 types of fund options during the policy tenure. In case you opt for switching, the entire fund value will be switched to the new fund.
Settlement Option: Under the same, the insured can receive the death benefits in instalments.
Surrender: In case of urgency, the plan allows you to surrender the plan. If you surrender before the end of the lock-in period, you will get unit fund value after deducting the discontinuance charge. In case you surrender after the lock-in period, you will be liable to receive the entire unit fund value.
Revival: You can revive your lapsed policy within three years from the date of first unpaid premium or up to the date of maturity.
Reinstatement: Reinstatement of a surrender policy is not allowed under this plan.
Free-look Period: If you are not happy with any of the features of the plan, you are allowed to cancel the same during the free look period (15 days for offline and 30 days for online) and can get your invested money back.
Loan: You can't avail loan facility against the LIC SIIP.
The plan offers a single rider- Accidental Benefit Rider. Under the same, you will get an accidental benefit sum assured in a lump sum amount. The benefit is available until the maturity date or the policy anniversary.
This is the charge that will be collected at the beginning of the policy. It will get reduced from single premium and the balance will be used to buy the units.
Below are the premium allocation charges.
|Offline sale||First Year -8%. |
2nd to 5th year –-5.5%.
6th year onwards is 3%.
|Online sale||First Year - 3%. |
2nd to 5th year - 2%.
6th year onwards - 1%.
It is a management fee which is required to run funds. It is the same as the expense ratio in mutual funds.
The fund management charges are 1.35% of the total fund value in a year. In case of discontinued policy fund, it would be 0.5% of the fund in the year.
You have to pay discontinuance charges on cancelling the appropriate units in the policy.
|1st year||Lower of 20% of annualised premium or fund value. The max is Rs. 3,000.|
|2nd year||Lower of 15% of annualised premium or fund value. The max is Rs. 2,000.|
|3rd year||Lower of 10% of annualised premium or fund value. The max is Rs. 1,500.|
|4th year||Lower of 5% of annualised premium or fund value. The max is Rs. 1,000.|
|5th year onwards||Nil|
Suicide: In case the policyholder committed suicide during the policy tenure, the beneficiary as stated in the policy documents will be liable to receive the unit fund value. The plan will not provide any other coverage and will be terminated.
1. What are the different funds available under LIC SIIP?
LIC SIIP has come out with 4 different fund options which include bond fund, secured fund, balanced fund and growth fund.
LIC SIIP allows you to get a maximum of 25% of the annualised premium as guaranteed additions.
The premium paying term under LIC SIIP will be the same as the policy tenure (10 to 25 years).
Yes, LIC SIIP offers a grace period of 15 days to make the payment of due premium. During the grace period, the policy would be considered as active and you will be liable for mortality and accidental benefit cover.
You can pay a premium on a monthly, quarterly, half-yearly and yearly basis.
It does not offer any liquidity benefit during the first five years of the plan.
Last updated on 06-11-2020