LIC Policy: The LIC SIIP is a unit-linked insurance plan that combines opportunities for investment with insurance protection. It allows policyholders to choose from a mix of equity and debt fund options, based on their risk profile to generate higher returns. The plan can provide comprehensive financial coverage to the insured’s family against any type of eventualities. Over the years, the policy can help investors grow their savings into a sizeable corpus that they can use to finance important life events.
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To be eligible for LIC SIIP, the policyholder must be at least 90 days old, with a maximum age of 65 years. The policy term ranges from 10 to 25 years, with a minimum sum assured of 10 times the annualized premium for individuals below the age of 55 years and 7 times for those above 55 years of age. The minimum premium amount ranges from Rs. 4,000 to Rs. 40,000, depending on the frequency of payments.
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LIC SIIP offers a range of benefits to policyholders, including death and maturity benefits, as well as guaranteed additions. In case the insured dies before the risk commences, an amount equal to the unit fund value is payable to the beneficiary. On death after the risk commences, the beneficiary can choose to receive the unit fund value, 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 reduced by partial withdrawal if any. If the policyholder survives the date of maturity, the unit fund value along with the refund of mortality charges is payable by the insurer.
LIC SIIP also offers features such as four fund options to choose from, free switches between funds, add-on rider benefits to enhance the coverage of the policy, and tax benefits under the Income Tax Act. The policyholder can also withdraw partial funds after completing five years of the policy.
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LIC SIIP has two optional benefits – an accidental death benefit rider option and the facility of partial withdrawals. The basic sum assured amount of the insurance cannot be greater than the accidental death benefit sum assured amount. Partial withdrawals can be made in the form of a fixed amount or a fixed number of units.
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LIC SIIP offers four fund options to choose from – Bond Fund, Secured Fund, Balanced Fund, and Growth Fund. The investment pattern of these funds varies depending on the type of securities they invest in and the risk-portfolio.
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Example: If a policyholder invests Rs. 50,000 in the Balanced Fund option of LIC SIIP for ten years and receives a guaranteed addition of 10%, the total fund value after ten years will be Rs. 9,39,700.
