SIP Cover to do away with extra cost to avail Insurance Protection


SInsurance has become very familiar during the times of COVID-19. Despite the lockdown, the number of novel Coronavirus infection cases have been increasing in the country. Panicked by this deadliest virus, more many people are now focusing and looking for health insurance and life insurance covers. Systematic Investment Plan (SIP) is one of the best options to protect the investors themselves. There is an availability of free life insurance cover of their investment at this very time of COVID-19 reality. 

At present, there are three Asset Management Companies (AMCs) – ICICI Prudential, Aditya Birla Sun Life (ABSL), and Nippon India. These companies offer free optional in-built insurance cover to the people investing in mutual funds (MFs) through a Systematic Investment Plan (SIP) according to their SIP contributions and tenure. AMC encourages SIP investors by bearing the cost of insurance with the guarantee that investors adhere to their investments for a long duration. Withdrawals- be it full or partial, are discouraged. The insurance cover starts us usually with the commencement of SIP without any medical test but the cover ceases when the investment is discontinued or on partial withdrawal.

Uncertainty is the factor which may come up at any time. In case of the unfortunate death of an investor, the free add-on life cover would prove beneficial for the investor in achieving his/her financial goals. The maximum insurance cover to the investors is limited to Rs. 50 lakhs with entry age between 18 and 51 years. The investors can continue the insurance cover up to 55 years of age for ICICI Prudential & Nippon India. For the ABSL MF investors, the cover terminates at the age of 60. The minimum investment tenure for ICICI Prudential and Nippon India SIP insure is 3 years. In the case of ABSL Century, SIP has a fixed tenure of 60 minus the current age of the investor. Monthly SIP amount and investment tenure are decided by the quantum of life cover. Compared to the first year, the quantum of cover will be 10 times in the second year. For the ICICI prudential SIP Plus and ABSL Century SIP, the cover will be 100 times from the third year onwards. For the Nippon India SIP Insure, the cover will be 120 times.

The insurance amount may not be adequate to cover your life against the risk of premature death, but it would be adequate to cover your SIP investment.


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