Mutual Funds with Insurance

A few mutual fund houses – Aditya Birla Sun Life, ICICI Prudential and Reliance – have bundled term life insurance cover with a few of their schemes. These bundled products have been christened as century SIP, SIP plus and SIP insure by the respective AMCs.

What is MF scheme with insurance cover?

A few fund houses provide free life insurance cover to their SIP investors. The insurance provided is essentially term insurance wherein the insurance company will pay out money only in case of death of the investor. This facility is available only on select schemes. In addition, the investor has to have an investment tenure of at least of 3 years to be eligible for this facility.

How does Mutual Funds with Insurance work?

The insurance cover is proportional to SIP amount subject to an upper limit. Unlike other life insurance schemes your clients do not have to undergo any medical test but declaration of good health is mandatory.

Let us look at the features of SIP + insurance offered by different AMCs.

	Aditya Birla Sun Life Insurance	ICICI Prudential Fund	Reliance Nippon Life
Eligibility	1-55 years	1-55 years	18-51 years
Maximum sum assured year-wise	1st Year –  10 times the monthly instalment 2nd  Year – 50 times the monthly instalment 3rd  Year – 100 times the monthly instalment   In addition the insurance company will pay the investor's pending Century SIP  instalments	1st Year – 10 times the monthly instalment 2nd  Year – 50 times the monthly instalment 3rd  Year – 100 times the monthly instalment	1st Year – 10 times the monthly instalment 2nd  Year – 50 times the monthly instalment 3rd  Year – 120 times the monthly instalment
Maximum sum assured	Rs.20  lakh	Rs.50 lakh	Rs.21 lakh
Minimum instalment	Rs.1,000	Rs.1,000	NA
Discontinuation of cover	In case of partial or complete redemption/switch out
In case investor stops SIP before 3 years	Cover ceases
In case investor stops SIP after 3 years	Cover continues with certain caveats in terms of sum assured

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