LIC’s SIIP Plan
LIC’s Systematic Investment Insurance Plan (Plan No. 852, UIN No. 512L334V01) was launched on March 2, 2020. The plan falls under the umbrella of unit-linked, non-participating individual life insurance plans. Being a combination of investment and insurance, the LIC SIIP plan aims at making money invested grow while also offering a life cover. The plan provides investors with four different fund options to invest their earnings into. The plan comes with myriad benefits, which you can assess before investing to determine if the plan is worth your while.
Let us take you through the various features of the plan, the eligibility and other details for you to decide whether the plan covers your insurance requirement.
Key Features of LIC’s SIIP
The key features of the LIC SIIP are listed in the points below:
Unit Linked Insurance Plan
The LIC’s SIIP combines the features of investment and insurance. The plan offers life cover to the insurance while also investing the premium amount in four fund options to help the growth of the amount invested. Investors looking for life insurance that invests their money into an instrument that exponentially grows owing to the power of compounding can avail the benefit of LIC’s SIIP.
LIC’s SIIP pays various benefits, including maturity benefits, death benefits and refund of mortality charges. The benefits shall be payable either in lumpsum or in instalments as opted for by the policyholder.
Guaranteed additions are returns that are guaranteed to the policyholder in the form of a percentage of annualized premium. The additions will be converted into units based on NAV on that date and shall be credited to the unit funds. The percentage of guaranteed additions increases at the end of each five years, starting from the sixth year of policyholding.
|End Policy Year||Guaranteed Percent|
The policyholder is eligible to make partial withdrawals from the policy after the fifth year from the inception of the plan. Partial withdrawals can be in the form of either a fixed amount or a fixed number of units.
The policyholder exercises the option of receiving the death benefit during his lifetime in instalments. The death benefit will be paid in the specified mode (yearly, half-yearly, quarterly or monthly), spread over five years.
The LIC SIIP allows the policyholder to switch among the four types of available fund options during the tenure of the policy. Up to 4 switches are allowed free of charge within a given policy year and subsequent switches will incur a switching charge of Rs. 100 per switch. Once the switch is complete, the entire fund value will switch to a new fund.
Surrender of Policy
The policyholder has the option to surrender the in-force policy anytime during the policy term. If the policy is surrendered during the lock-in period, the unit fund value (after deducting the Discontinuance Charges) shall be transferred to the discontinued policy fund, which is payable at the end of the lock-in period. In case the policy is surrendered after the end of 5 years lock-in period, then the unit fund value at the date of surrender will be payable without any Discountinuance charges.
The LIC SIIP Plan comes with a free-look period that allows you 15 days (for offline) and 30 days (for online) to inspect the terms and conditions of the plan. If you are not happy with any term or condition laid down in the policy, you can terminate the plan and get your money back.
The plan allows the policyholder a grace period of 30 days for the payment of yearly, half-yearly or quarterly premiums and 15 days for monthly premiums. Payment of premiums during the grace period will keep your policy from terminating due to the delay in payment of due premiums.
The eligibility for LIC SIIP is given in the table below:
|Minimum Entry Age||90 days|
|Maximum Entry Age||65 years|
|Minimum and maximum maturity age||18 years and 85 years|
|Policy tenure||10 years to 25 years|
|Premium||Rs. 40,000 / year|
|Lock-in period||5 years|
10 times of annualized premium (below 55 years)
7 times of annualized premium (above 55 years)
Major Benefits of LIC’s SIIP
The benefits available under the LIC SIIP are laid down in the following points:
The maturity benefit is paid out to the insured if he survives until the date of maturity of the plan. The amount to be received by the insured as a maturity benefit will be equal to the fund value at the maturity date.
In the event of the death of the policyholder before the stipulated date of maturity, the beneficiary will be entitled to a death benefit equal to the unit fund value on the date (before the commencement date of risk). On the death of the policyholder after the commencement of risk, an amount equal to the highest of the following will be payable:
- Basic sum assured minus partial withdrawals made during the two years immediately preceding to the date of death.
- Unit Fund Value
- 105% of the total premium received up to the date of death minus partial withdrawals made during the two years immediately preceding death.
Refund of Mortality Charges
In case the insured survives till the maturity date, an amount equal to the total amount of mortality charges deducted in respect of life insurance cover will be payable alongside the maturity benefit, provided that all due premiums under the policy have been paid. Refund of mortality charges does not apply in case of surrender of the policy.
The plan comes with a single accidental raider benefit which offers an accidental benefit sum assured in a lumpsum amount. The benefit is available until the policy anniversary or the maturity date.
Investment of Funds
There are four types of fund options available, as given in the table below. The policyholder can choose a suitable option among the ones available.
|Fund Type||Investment in Government Guaranteed Securities /Corporate Debt||Investment in Short-term Instruments||Investment in Listed Equity Shares||Risk Profile|
|Bond Fund||Not less than 60%||Not more than 40%||Nil||Low risk|
|Secured Fund||Not less than 45% and not more than 85%||Not more than 40%||Not less than 15% and not more than 55%||Low to medium risk|
|Balanced Fund||Not less than 30% and not more than 70%||Not more than 40%||Not less than 30% and not more than 75%||Medium Risk|
|Growth Fund||Not less than 20% and not more than 60%||Not more than 40%||Not less than 40% and not more than 80%||High Risk|
Charges Applicable under LIC’s SIIP
Certain charges are applicable when you opt for the plan. These charges are as follows:
Premium Allocation Charges
Premium allocation charge is collected at the beginning of the policy. The charge will be deducted from a single premium, and the balance will be used to buy the units.
The charges are usually a percentage of the single premium as given below:
First-year – 8%
Second to the fifth year – 5.5%
Sixth year onwards – 3%
First year – 3%
Second to the fifth year – 2%
Sixth year onwards – 1%
Fund Management Charges
The fund management charges are the fee taken to manage and run funds. The charges are 1.35% of the total fund value in a year. In the case of discontinued policy, it would be 0.5% of the fund value in a year.
On cancelling appropriate units in the policy, the insured must pay discontinuation charges. The charges are as follows:
|First Year||Lower of fund value or 20% of annualized premium. The maximum is Rs. 3,000.|
|Second Year||Lower of fund value or 15% of annualized premium. The maximum is Rs. 2,000.|
|Third Year||Lower of value or 10% of annualized premium. The maximum is Rs. 1,500.|
|Fourth Year||Lower of fund value or 5% of annualized premium. The maximum is Rs. 1,000.|
|Fifth Year Onwards||Nil|
Exclusions Under LIC’s SIIP
If the policyholder commits suicide within 12 months from the inception of the plan, the death benefit will accrue to the beneficiary who will receive the unit fund value. The plan will cease to provide any other coverage, and it will be terminated.
The policy shall immediately terminate on the occurrence of the following events:
- If the settlement option for death is not exercised on the date on which the death benefit is paid.
- The date when the surrender benefits are settled under the policy.
- The date of maturity.
- The payment of final instalments under the settlement option, if opted for in case of death.
- On the payment of the free-look cancellation amount.
- On compulsory termination.
- On discontinuance of policy.
- In the event of forfeiture
How To Buy LIC’s SIIP?
The LIC’s SIIP is available both online and offline. Follow the steps laid down below to purchase the policy through the method that best suits your convenience.
To Apply Online:
- Visit the official website of LIC and scroll down to find ‘Buy Online Policies’. Tap on ‘Click Here’.
- Among all the policies, you will be able to see ‘LIC’s SIIP’. Tap on ‘Click Here To Buy’.
- Click on ‘Unit Linked Plans’ to find the policy. Click on ‘Buy Online’ under LIC’s SIIP.
- Once you tap on ‘Click To Buy Online’, you will be asked to fill out some information related to COVID and contact details.
- You’ll be required to enter the OTP shared on your mobile number. Once that’s done, fill out the required details (personal and product) and click on ‘Calculate Premium’.
- Pay the premium and the policy is yours to take home.
To Buy Offline:
The customer also has an option to visit the nearest LIC branch or call the LIC agent to purchase LIC’S SIIP offline. Before investing in a plan, ensure that the plan meets your long-term goals and covers all your needs.
Frequently Asked Questions
LIC SIIP comes with a free-look period of 15 days for offline and 30 days for online plans.
Yes, the LIC SIIP allows you to switch between the four fund options. Up to four switches are allowed for free.
The insured may choose from yearly, half-year, quarterly and monthly settlement options.