Don’t spend for Insurance seperately – Get life Insurance cover while investing in Mutural fund

Are you paying premium for your life insurance separately by taking life insurance policy in LIC or in any of private insurance companies? Till now it’s fine. But if you intend to take a new life insurance  policy from now onwards and start paying for your life insurance cover, probably you are wasting your money. Instead, you can utilize the amount you pay as premium for life insurance for investing on monthly basis (SIP) in the designated mutual funds. Those designated mutual funds offer decent return of around 25% to 35% on annual basis. In addition, those mutual funds schemes offer life insurance cover at no cost or for a small cost (1.5% of amount invested) to the extent of unpaid installments you have committed to pay through SIP in that mutual fund scheme.

The ultimate benefit is you need not spend extra amount for taking a life insurance cover. For example if you want to get a life insurance cover of Rs.1 lakh in LIC you have to pay Rs.6000 to 12,000 per year (depending on whether the insurance cover is endowment or money back). The maturity amount you get in this case is very minimum if the insured person is alive. In the case of SIP in designated mutual fund schemes, the entire amount you pay is only an investment and it works for you in the name of Units in the said fund.

Insurance Cover for Mutual fund SIP was introduced by Kotak Mutual fund for their Kotak 30 and Kotak Tax saver during last year. GConnect has already enlightened about this scheme. You can the details of this offer in this link. Life Insurance Cover for investment in Kotak Mutual Fund through SIP

Now it’s the turn of Reliance Mutual fund, India’s largest Fund House. Reliance Mutual fund is now offering life insurance cover for the investment made in certain schemes given below through SIP. It could be seen that Reliance has offered life insurance cover for their time tested equity diversified schemes such as Reliance Equity, Reliance Vision, Reliance Equity Opportunities etc. It’s high time to utilize this opportunity and make our savings earn for us to accumulate wealth for our long term goals such us our children’s education, marriage etc. The additional benefit we get is the insurance cover for a minimum cost.

The investment in Kotak Tax Saver is also having another additional benefit in the form of Tax Exemption upto Rs. 1 lakh under Section 80 C for each year.

Details of Reliance SIP Insure

Reliance SIP Insure facility is an add on feature of life insurance cover under Group Term Insurance to individual investors opting for SIP in the designated schemes.

It helps to encourage individual investors to save & invest regularly through Systematic Investment Plan (SIP) and help achieve their financial objective without any hindrance

What is the Facility?

* Reliance SIP Insure provides free life insurance cover to investors at no extra cost. In the unfortunate event of the demise of an investor during the tenure of the SIP, the insurance company will pay for the balance amount towards the remaining unpaid SIP installments
* Thus, the nominee would be able to continue in the scheme without having to make any further contribution.. Investor’s long term financial planning and objective of investing through SIP could still be fulfilled as per the targeted time horizon, even if he/she dies prematurely.

Reliance SIP Insure- Benefits to the investor

The benefit of Long Term Equity Investment

* Equities provide relatively better returns among all asset classes over a longer period of time

The benefit of Systematic Investment Plan:

* Inculcates Savings Habit
* Rupee Cost Averaging & Eliminates the need to time the market

Free Life Insurance Cover

* Helps to complete the planned investments
* Maturity Proceeds at NAV based prices


* Wide choice of eligible schemes


* Auto Debit from 4 banks namely ICICI bank, HDFC bank, AXIS bank & HSBC
* ECS facility across – 65 locations

Designated Schemes in which Reliance SIP Insure will be offered

* Reliance Growth Fund – Retail Plan
* Reliance Vision Fund – Retail Plan
* Reliance Equity Opportunities Fund – Retail Plan
* Reliance Equity Fund – Retail Plan
* Reliance Equity Advantage Fund- Retail Plan
* Reliance Regular Savings Fund – Equity option
* Reliance Regular Savings Fund – Balanced option
* Reliance Banking Fund
* Reliance Pharma Fund
* Reliance Media & Entertainment Fund
* Reliance Diversified Power Sector Fund – Retail Plan


* All individual investors enrolling for investments via SIP & opting for ‘Reliance SIP Insure’
* Only individual investors whose completed age is greater than 20 years and less than 46 years at the time of investment.
* In case of multiple holders in the any scheme, only the first unit holder will be eligible for the insurance cover.

Investment Details

* Minimum Investment per installment: Rs.2000 per month & in multiples of Re 1 thereafter. There is no upper limit
* Minimum Period of Contribution: 3 years and in multiples of 1 year thereafter.
* Maximum Period of Contribution: 15 years OR till attaining 55 years of age, whichever is earlier (e.g., a person can register an SIP of maximum 10 yrs at the age of 45 yrs.) The insurance cover ceases when the investor attains 55 years of age.
* Mode of payment of SIP installments is only through Direct Debit & ECS ( Post Dated Cheques shall not be accepted )

Amount of Life Insurance Cover Available:

* An amount equivalent to the aggregate balance of unpaid SIP installments, subject to a maximum of Rs.10 lakhs per investor across all schemes / plans and folios will be invested in the Nominee’s* account

Reliance SIP Insure – How does this work?

* An investor does a monthly SIP of Rs. 10,000 for 5 years in Reliance Growth Fund
* If he dies after a period of 3 yrs, then his Sum Assured= Unpaid SIP installments = 2 yrs (ie 24months) X 10, 000 = Rs 2, 40,000

This amount will be paid by life insurance company to SIP investor’s nominee account with Reliance Mutual Fund and will be invested in in the same scheme in which the deceased has earlier invested

Commencement of Insurance Cover: The Insurance cover shall commence after “waiting period” of 90 days from the commencement of SIP installments. However, the waiting period will not be applicable in respect of accidental deaths.

Load Structure

* The Entry Load under Reliance SIP Insure shall be same as applicable to normal purchase /additional purchase transactions in the respective designated schemes
* However, there will an Exit Load of 2%, if the accumulated units acquired or allotted under Reliance SIP Insure are redeemed or switched out to another scheme before the maturity of SIP tenure as opted in the respective scheme either by the SIP-Insure unit holder or by the nominee as the case may be.
* In the event of the death of the investor before completion of SIP Insure Tenure, in case of any contingency there is an option with the nominee* to redeem the amount by paying an exit load of 2% on the repurchase units.
* However, if the units are redeemed on completing the opted SIP tenure, there will not be any exit load in the respective scheme.

Did you know?

* Amount of Life Insurance Cover Available: Equivalent to the aggregate balance of unpaid SIP installments, subject to a maximum of Rs.10 lakhs per investor across all schemes / plans and folios

HTML clipboardOne can aim to have a target insurance cover as per one’s requirement by referring to the matrix attached below

Cover (Rs)/Yrs 3 years 5 years 10 years 15 years
1,000,000 27,778 16,667 8,334 5,556
900,000 25,000 15,000 7,500 5,000
800,000 22,222 13,333 6,667 4,444
700,000 19,444 11,667 5,833 3,889
600,000 16,667 10,000 5,000 3,333
500,000 13,889 8,333 4,167 2,778
400,000 11,111 6,667 3,333 2,222
300,000 8,333 5,000 2,500 1,667
200,000 5,556 3,333 1,667 1,111
100,000 2,778 1,667 833 556

The table shows the SIP amount per month to be invested for the required combination of Eligible Insurance Cover & Tenure. For example, to have a maximum cover of Rs 10 lacs at the time of registration in Reliance SIP Insure Facility, one can invest Rs 5,556 p.m for a period of 15 yrs as per the cell highlighted in pink.

  • What does it take to create wealth?

    Cover (Rs)/Yrs 3 years 5 years 10 years 15 years
    5,00,000 12,000 7000 2,500 1,200
    10,00,000 23,800 13,000 4,900 2,400
    25,00,000 60,000 32,500 12,200 6,000
    50,00,000 1,20,000 64,500 24,300 12,000
    100,00,000 2,38,000 1,30,000 48,500 24,000

    The table shows the SIP amount required to be invested per month for achieving the target amount in the specified time period. The hypothetical rate of return on the investments is assumed at 10% p.a. For example: One has to do an SIP of Rs 13,000 p.m for a period of 5 years to create wealth of Rs 10 lacs.

    What does the past performance have to say?

    SIP Installment /Yrs 3 5 10 Since Inception
    2,000 1,13,343 3,71,043 24,21,367 44,37,506
    1,10,926 2,77,311 9,09,328 12,75,183
    3,000 1,70,015 5,56,565 36,32,051 66,56,260
    1,66,390 4,15,967 13,63,992 19,12,775
    5,000 2,83,359 9,27,609 60,53,419 1,10,93,766
    2,77,317 6,93,279 22,73,320 31,87,958
    10,000 5,66,718 18,55,218. 1,21,06,839 2,21,87,533
    5,54,634 13,86,559 45,46,641 63,75,917
    15,000 8,50,078 27,82,827 1,81,60,258 3,32,81,300
    8,31,951 20,79,838 68,19,962 95,63,875

    Inception Date: 8th Oct 1995. Returns are 30th April 08
    Past Performance may or may not be sustained in future.

    The above table shows the historical SIP performance of Reliance Growth Fund (Retail Plan – Growth Plan – Growth option). A person who had made an SIP of Rs 2000 p.m. in the above mentioned scheme for a period of 5 yrs on 1st May 03 would have invested Rs.1.2 lacs by 30th April, 2008 and have earned a total amount of Rs 3.71 lacs.

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