LIC SIIP Plan 2022

LIC’s SIIP is a unit-linked insurance plan meaning that you get insurance protection along with investment opportunities in market funds. The life cover lasts throughout the tenure of the policy for which a regular premium payment is required. Individuals can purchase this plan through an online or offline process.

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The plan can provide comprehensive financial coverage to the family of the insured against any type of eventualities. Further, the investment returns from LIC’s SIIP in the long term lets individuals grow their wealth and create a financial cushion for a secure future.

Here are details on the various aspects of LIC’s SIIP Plan. 

Benefits Offered by LIC SIIP Plan

  1. Death Benefit

    If the life assured dies before the risk commences, an amount equal to the unit fund value shall be payable to the beneficiary of the LIC policy.

    On death after the risk commences, the highest of the following death benefit is payable:

    • Unit fund value; or

    • 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 is reduced by partial withdrawal if any.

    The death benefit can be availed by the beneficiary either as a lump-sum amount or in installments.  

  2. Maturity Benefit

    If the life assured survives the date of maturity & provided all the due premiums are paid, the unit fund value along with the refund of mortality charges is payable by the insurer.

  3. Guaranteed Additions  

    Guaranteed additions as a percentage of one yearly premium are added to the fund value on completing the following years of the policy. This is on the condition that all the due premiums are paid.

    End of the Policy year Guaranteed Additions (% of one yearly premium)
    6 5%
    10 10%
    15 15%
    20 20%
    25 25%

Eligibility Criteria of LIC’s SIIP

The following are the eligibility criteria for LIC’s SIIP plan.

Criteria Minimum Maximum
Entry Age 90 days 65 years
Maturity Age 18 years 85 years
Policy Term 10 years 25 years
Sum Assured Below 55 years of age- 10 times annualized premium 55 years and above- 7 times the annualized premium
Premium Paying Term Same as policy tenure
Minimum Premium Amount Yearly - Rs. 40,000 Half-yearly - Rs. 22,000 Quarterly - Rs. 12,000 Monthly - Rs. 4,000

Features of LIC’s SIIP Plan

Let’s take a look at some of the salient features of the policy.

  • The plan offers 4 fund options to choose from.

  • The policyholder can make free switches between funds.

  • The plan offers the option of add-on rider benefits to enhance the coverage of the policy.

  • Tax benefits can be availed U/S 80C and 10(10D) of the Income Tax Act.

  • Partial withdrawals of funds are applicable under the policy.

Optional Benefits Offered by LIC SIIP

  1. Rider Benefits

    The plan offers an accidental death benefit rider option. Under this rider option, the accidental benefit sum assured is payable to the beneficiary if the insured person dies an unfortunate death due to an accident.

    Some important to note –

    • The accidental death benefit sum assured amount cannot exceed the basic sum assured amount of the policy.

    • It can be bought at any policy anniversary provided that there are at least 5 more years remaining in the policy term.

    • The benefit offered under this policy shall be available till the maturity date or till the policy anniversary on which the age of the life assured is 70 years, whichever is earlier.

  2. Partial Withdrawals

    The policyholder can avail the facility of partial withdrawal of the units at any time after completing 5 years of the policy, provided all the premiums are dully paid. Some conditions are:

    • In the case of a minor- Partial withdrawals are applicable only after the life assured is age 18 years or above.

    • The withdrawals can be made in the form of a fixed amount or in the form of a fixed number of units.

    • The maximum sum of partial withdrawal during each policy year can be as follows:

    Policy Year %of Unit Fund
    6th to 10th 20%
    11th to 15th 25%
    16th to 20th 30%
    21st to 25th 35%

Investments of Funds

Unit Fund- The premium paid towards the policy is utilized to buy units as per the type of funds opted by the policyholder. LIC’s SIIP offers 4 different fund options to choose from. Here is a look at these fund options and their investment pattern.

Fund Type Investment in Government securities/ corporate debt Short-term investment as money market instruments Investment in listed equity shares Objectives Risk-portfolio
Bond Fund Not less than 60% Not more than 40% Nil To provide less volatile and a safe investment option through investment in fixed income securities Low risk
Secured Fund Not less than 45% & More than 85% Not more than 40% Not less than 15% & not more than 55% To offer a steady income through investment in both fixed income and equity securities Low- medium risk
Balanced Fund Not less than 30% & not more than 70% Not more than 40% Not less than 30% & not more than 70% To provide capital appreciation and balanced income through equal investment in both fixed income and equity securities Medium risk
Growth Fund Not less than 20% & more than 60% Not more than 40% Not less than 40% and more than 80% To provide long term capital appreciation  through investment majorly in equity and equity securities High risk

Charges Applicable Under the LIC’s SIIP Plan

Let’s take a look at the charges applicable under the LIC’s SIIP Plan.

  1. Premium Allocation Charge

    Premium allocation charge constitutes the part of the premium which is used to buy units for the policy.

    The following are the premium allocation charges.

    Premiums Offline Sale Online Sale
    1st year 8.00% 3%
    2nd – 5th year 5.50% 2%
    6th year and thereafter 3.00% 1%
  2. Mortality Charges

    Mortality charge is the cost of the life insurance cover. It is age-specific and is charged at the beginning of each policy month by canceling the appropriate number of units out of the unit fund value. The mortality charge depends on the sum at risk during the policy tenure.

  3. Accidental Benefit Charges

    Accidental benefit charge applies to the accidental death benefit rider, if opted. This charge is deducted at the start of each month by canceling the appropriate number of units out of the unit fund while the policy is in force.  The accidental benefit charge is applicable at the rate of Rs.0.40 per thousand.

  4. Fund Management Charge

    This charge is applicable as the percentage of the value of the asset and is appropriated by adjusting the net asset value fund management charges. This charge is imposed at the time of calculation of net asset value (NAV), which is done daily.

  5. Switching Charges

    Under LIC’s SIIP plan the policyholder has the option to switch funds up to a maximum of 4 times in a financial year. The subsequent switches in that year are subject to switching charges of Rs.100.

  6. Partial Withdrawal Charge

    At the time of partial withdrawal, Rs. 100 is deducted as a partial withdrawal charge on the unit fund.

Other Details of LIC’s SIIP Plan

  1. Free-look Period

    A free-look period of 15 days in case of offline purchase and 30 days in case of online policy purchase is offered by the insurer. During this period the insurance holder can cancel the policy is he/she is not satisfied with its terms and conditions.

  2. Grace Period

    A grace period of 30 days is offered to pay the unpaid premium.

Exclusion

In case the policyholder commits suicide within 12 months from the date of policy initiation or the date of revival of the policy - the beneficiary of the policy will receive the unit fund value available as on the date of death along by submitting the death certificate.

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