1. Insurance-linked SIPs for investing in equity mutual funds can be useful for motivating long-term investing in a disciplined manner, but it shouldn't be a replacement for a regular term insurance plan.
2. It's like buying a Ulip, without paying its exorbitant charges, at no additional cost, since Total Expense Ratio remains same for all investors.
3. However, its term cover remains valid only if SIPs are without any break or any redemption or any switch to another plan.
4. There may be exit load on switch or redemption before SIPs' completion, forcing its continuation despite fund's underperformance.
5. Hence, fund selection with this scheme may be done according to diversification, long-term higher returns, and stable fund ratings.
6. Although life cover's mortality charges are borne by AMC, with same TER for insured as well as uninsured investors, these caveats are noteworthy too:-
1. Not all funds are eligible.
2. It's a group term insurance.
3. Maximum cover is capped across all schemes and folios.
4. Cover ceases at 55/60 age.
5. Only first unitholder is eligible.
6. Death claim is paid by insurer directly to the nominee.
7. Exit load is 2%, 1% and nil for below 1, 1-3 and above 3 years.
8. Life cover ceases on partial withdrawal, full exit or SIP stoppage.
9. Select only consistently long-term performing funds.
10. Don't hold underperforming funds for term insurance greed.
2. It's like buying a Ulip, without paying its exorbitant charges, at no additional cost, since Total Expense Ratio remains same for all investors.
3. However, its term cover remains valid only if SIPs are without any break or any redemption or any switch to another plan.
4. There may be exit load on switch or redemption before SIPs' completion, forcing its continuation despite fund's underperformance.
5. Hence, fund selection with this scheme may be done according to diversification, long-term higher returns, and stable fund ratings.
6. Although life cover's mortality charges are borne by AMC, with same TER for insured as well as uninsured investors, these caveats are noteworthy too:-
1. Not all funds are eligible.
2. It's a group term insurance.
3. Maximum cover is capped across all schemes and folios.
4. Cover ceases at 55/60 age.
5. Only first unitholder is eligible.
6. Death claim is paid by insurer directly to the nominee.
7. Exit load is 2%, 1% and nil for below 1, 1-3 and above 3 years.
8. Life cover ceases on partial withdrawal, full exit or SIP stoppage.
9. Select only consistently long-term performing funds.
10. Don't hold underperforming funds for term insurance greed.