LIC SIIP Plan
LIC SIIP is a unit-linked insurance plan that combines insurance protection and investment opportunities. It comes with a mix of equity and debt fund options that policyholders can choose as per their risk profile to generate higher returns. Over the years, the hard-earned savings of investors grow into a sizeable corpus that they can use to finance important life events.
Here are details on the various aspects of LIC’s SIIP Plan.
Eligibility Criteria of LIC’s SIIP
The following are the eligibility criteria for LIC’s SIIP plan.
Benefits Offered by LIC SIIP Plan
Death Benefit
If the life assured dies before the risk commences, an amount equal to the unit fund value shall be payable to the beneficiary of the LIC policy.
On death after the risk commences, the highest of the following death benefit is payable:
Unit fund value; or
105% of the total premium paid till the date of death reduced by partial withdrawals if any; or
The basic sum assured amount on death is reduced by partial withdrawal if any.
The death benefit can be availed by the beneficiary either as a lump-sum amount or in installments.
Maturity Benefit
If the life assured survives the date of maturity & provided all the due premiums are paid, the unit fund value along with the refund of mortality charges is payable by the insurer.
Guaranteed Additions
Guaranteed additions as a percentage of one yearly premium are added to the fund value on completing the following years of the policy. This is on the condition that all the due premiums are paid.
Features of LIC’s SIIP Plan
Let’s take a look at some of the salient features of the policy.
The plan offers 4 fund options to choose from.
The policyholder can make free switches between funds.
The plan offers the option of add-on rider benefits to enhance the coverage of the policy.
Tax benefits can be availed U/S 80C and 10(10D) of the Income Tax Act.
Partial withdrawals of funds are applicable under the policy.
Optional Benefits Offered by LIC SIIP
Rider Benefits
The plan offers an accidental death benefit rider option. Under this rider option, the accidental benefit sum assured is payable to the beneficiary if the insured person dies an unfortunate death due to an accident.
Some important to note –
he accidental death benefit sum assured amount cannot exceed the basic sum assured amount of the policy.
It can be bought at any policy anniversary provided that there are at least 5 more years remaining in the policy term.
The benefit offered under this policy shall be available till the maturity date or till the policy anniversary on which the age of the life assured is 70 years, whichever is earlier.
Partial Withdrawals
The policyholder can avail the facility of partial withdrawal of the units at any time after completing 5 years of the policy, provided all the premiums are dully paid. Some conditions are:
In the case of a minor- Partial withdrawals are applicable only after the life assured is age 18 years or above.
The withdrawals can be made in the form of a fixed amount or in the form of a fixed number of units.
The maximum sum of partial withdrawal during each policy year can be as follows:
Investments of Funds
Unit Fund- The premium paid towards the policy is utilized to buy units as per the type of funds opted by the policyholder. LIC’s SIIP offers 4 different fund options to choose from. Here is a look at these fund options and their investment pattern.
Charges Applicable Under the LIC’s SIIP Plan
Let’s take a look at the charges applicable under the LIC’s SIIP Plan.
Premium Allocation Charge
Premium allocation charge constitutes the part of the premium which is used to buy units for the policy.
Mortality Charges
Mortality charge is the cost of the life insurance cover. It is age-specific and is charged at the beginning of each policy month by canceling the appropriate number of units out of the unit fund value. The mortality charge depends on the sum at risk during the policy tenure.
Accidental Benefit Charges
Accidental benefit charge applies to the accidental death benefit rider, if opted. This charge is deducted at the start of each month by canceling the appropriate number of units out of the unit fund while the policy is in force. The accidental benefit charge is applicable at the rate of Rs.0.40 per thousand.
Fund Management Charge
This charge is applicable as the percentage of the value of the asset and is appropriated by adjusting the net asset value fund management charges. This charge is imposed at the time of calculation of net asset value (NAV), which is done daily.
Switching Charges
Under LIC’s SIIP plan the policyholder has the option to switch funds up to a maximum of 4 times in a financial year. The subsequent switches in that year are subject to switching charges of Rs.100.
Partial Withdrawal Charge
At the time of partial withdrawal, Rs. 100 is deducted as a partial withdrawal charge on the unit fund.
Other Details of LIC’s SIIP Plan
Free-look Period
A free-look period of 15 days in case of offline purchase and 30 days in case of online policy purchase is offered by the insurer. During this period the insurance holder can cancel the policy is he/she is not satisfied with its terms and conditions.
Grace Period
A grace period of 30 days is offered to pay the unpaid premium.
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