What are the features of LIC SIIP?

You may pay premiums regularly at yearly, half-yearly, quarterly, or monthly intervals. Four fund options are available for investment. Guaranteed additions are added to the Fund Value. Rider options are available. Partial withdrawals are allowed after the lock-in period.

What is the Death Benefit in LIC SIIP?

Death Benefit in LIC SIIP On death before the Date of Commencement of Risk: An amount equal to the Unit Fund Value shall be payable. On death after the Date of Commencement of Risk: An amount equal to the highest of the following shall be payable ¬ • Basic Sum Assured reduced by Partial Withdrawals, if any, made during the two-year period immediately preceding the date of death; or, ¬ • Unit Fund Value; or • 105% of total premiums received up to the date of death, less any partial withdrawals made during the two years preceding the date of death.

LIC SIIP Review – Good Or Bad Investment Option?

Listen to this article

Warning! LIC SIIP Plan is not a Mutual Fund SIP. It is a ULIP named SIIP. Don’t get carried away with the name.

You may need to analyse the plan or product fully before investing in it.

What are the Advantages(pros) and Disadvantages(cons) of LIC SIIP?

Is the LIC SIIP a Good or Bad option to get the maximum returns required for your financial well-being?

In this article, let us analyse the LIC Plan – “LIC Systematic Investment Insurance Plan”. This detailed review will help you to understand the product – LIC’s SIIP.

1.)An Overview of LIC SIIP
2.)Features of LIC SIIP – Analysis
3.)Eligibility Criteria of LIC SIIP – Illustration
4.)Review of LIC SIIP Benefits in detail
5.)LIC SIIP Fund options – Analysis With Illustration
6.)Various charges under LIC SIIP – Analysis
7.)The Grace Period, Discontinuance and Revival of LIC SIIP – Analysis
8.)Free Look Period of LIC SIIP
9.)Surrendering LIC SIIP – Analysis
10.)Advantages of LIC SIIP – Analysis
11.)Disadvantages of LIC SIIP – Analysis
12.)Research Methodology Of LIC SIIP – Review

Benefit Illustration of LIC SIIP -IRR(Internal Rate Of Return (i.e.) Interest Rate) Analysis

13.)LIC SIIP VS Other Investment Options

LIC SIIP Vs. Pure Term Insurance + PPF / ELSS
LIC SIIP vs. LIC Jeevan Lakshya
LIC SIIP vs. LIC Jeevan Azad

14.)LIC SIIP vs. Other Investment Options – Review Conclusion
15.)Final Verdict on LIC SIIP – Good Or Bad?

1. An Overview of LIC SIIP

LIC’s SIIP is a Unit Linked, Non-Participating, Regular Premium, Individual Life Insurance plan. It offers insurance cum investment cover throughout the Term of the Policy. You can invest your premiums in one of four different types of investment funds.

For more Policy details, Click Here to download the LIC SIIP Policy brochure.

2. Features of LIC SIIP – Analysis

You may pay premiums regularly at yearly, half-yearly, quarterly, or monthly intervals.
Four fund options are available for investment.
Guaranteed additions are added to the Fund Value.
Rider options are available.
Partial withdrawals are allowed after the lock-in period.

3. Eligibility Criteria of LIC SIIP – Illustration

Minimum / Maximum Basic Sum Assured	Age below 55 years – 10 times the annualised premiumAge 55 years & Above – 7 times the annualised premium
Maximum Purchase Price	No Limit
Minimum Age at Entry	90 days
Maximum Age at Entry	65 years
Minimum Age at Exit	18 years
Maximum Age at Exit	85 years
Policy Ter	10 -25 years
Premium paying Term	Same as the Policy Term
Premium	Monthly – ₹ 4000Quarterly – ₹ 12000Half-yearly – ₹ 22000

Annual – ₹ 40,000

4. Review of LIC SIIP Benefits in detail

Death Benefit in LIC SIIP

On death before the Date of Commencement of Risk: An amount equal to the Unit Fund Value shall be payable.

On death after the Date of Commencement of Risk: An amount equal to the highest of the following shall be payable

Basic Sum Assured reduced by Partial Withdrawals, if any, made during the two-year period immediately preceding the date of death; or,
Unit Fund Value; or
105% of total premiums received up to the date of death, less any partial withdrawals made during the two years preceding the date of death.

Maturity Benefit in LIC SIIP

On Life Assured surviving the date of maturity provided all due premiums under the Policy have been paid, an amount equal to Unit Fund Value shall be payable.

Refund of Mortality Charges in LIC SIIP

On Life Assured surviving the date of maturity, an amount equal to the total amount of mortality charges deducted in respect of life insurance cover shall be payable along with the Maturity Benefit.

Guaranteed Additions of LIC SIIP

Guaranteed Additions as a percentage of one Annualized Premium, as mentioned in the table below shall be added to the Unit fund on completion of a specific duration of Policy years provided all due premiums have been paid and the Policy is in force.

End of Policy Year	Guaranteed Additions (as a percentage of one Annualized Premium)
6	5%
10	10%
15	15%
20	20%
25	25%

5. LIC SIIP Fund options – Analysis With Illustration

The allocated premiums will be utilized to buy units as per the fund type opted by the Policyholder out of the four fund type options available. Various types of fund options and their investment patterns are as under:

Fund Type	Government / Government Guaranteed Securities / Corporate Debt	Short-term investments such as money market instruments	Listed Equity Shares	Risk Profile
Bond Fund	Not less than 60%	Not more than 40%	NIL	Low Risk
Secured Fund	Not less than 45% & not more than 85%	Not more than 40%	Not less than 15% & not more than 55%	Low to Medium Risk
Balanced Fund	Not less than 30% & not more than 70%	Not more than 40%	Not less than 30% & not more than 70%	Medium Risk
Growth Fund	Not less than 20% & not more than 60%	Not more than 40%	Not less than 40% & not more than 80%	High Risk

6. Various charges under LIC SIIP – Analysis

Premium Allocation Charge

This is the percentage of the premium received that is allocated to charges.

Premiums	Offline sale	Online sale
1st Year	8%	3%
2nd to 5th Year	5.50%	2%
6th Year and Thereafter	3%	1%

Mortality Charge

Mortality Charge is the cost of life insurance coverage, which is age-specific and this will be taken at the beginning of each Policy month by canceling an appropriate number of units. This charge shall depend upon the Sum at Risk.

The rate of Mortality Charge per annum per Rs. 1000 Sum at Risk for some of the ages in respect of a healthy life are as under:

Age	25	35	45	50	60
Rs.	1.23	1.60	3.59	6.18	14.42

Accident Benefit Charges (if LIC’s Linked Accidental Death Benefit Rider is opted for):

This charge will be taken at the beginning of each month by canceling an appropriate number of units out of Unit Fund and shall be at the rate of Sum AssuredPolicy Per Policy year, ₹ 0.40 per thousand Accident Benefit Sum Assured.

Fund Management Charge

This is a charge levied as a percentage of the value of the assets. 1.35% p.a. of Unit Fund for all the four fund types. 0.50% p.a. of Unit Fund for “Discontinued Policy Fund”.

Switching Charge

Within a given Policy year 4 switches will be allowed free of charge. Subsequent switches made in that year will incur a Switching Charge of Rs. 100 per switch.

Partial Withdrawal Charge

A flat amount of Rs. 100/- shall be deducted by canceling an appropriate number of units out of the Unit Fund Value on the date on which partial withdrawal takes place.

Discontinuance Charge

This is a Charge levied by canceling the appropriate number of units out of the Unit Fund Value as of the date of discontinuance of the Policy. The charge depends on the year of discontinuance and the premium amount.

Miscellaneous Charge

This is a charge levied for an alteration during the contract and shall be a flat amount of Rs. 100/- which will be deducted by canceling an appropriate number of units out of Unit Fund Value.

Inference from Charges – Some of the charges mentioned above are unnecessary like Miscellaneous charges, charges for switching your own money, and charges for withdrawing your own money. So, this makes ULIP unattractive when compared to other market-linked products.

7. The Grace Period, Discontinuance and Revival of LIC SIIP – Analysis

Grace period

A grace period of 30 days will be allowed for payment of yearly half-yearly or quarterly premiums and 15 days for monthly premiums.

Discontinuance

If the Policy is discontinued during the 5-year lock-in period: Upon expiry of the grace period, the Unit Fund Value after deducting the Discontinuance Charge shall be converted into monetary Terms. This monetary amount shall be transferred to the Discontinued Policy Fund and the risk cover and rider cover, if any, shall cease. The Proceeds of the Discontinued Policy Fund shall be paid to you at the end of the lock-in period and the Policy shall Terminate.

If the Policy is discontinued after the expiry of 5 5-year lock-in- period: Upon expiry of the grace period, in case of discontinuance of a Policy due to non-payment of premium, the Policy shall be converted into a reduced paid-up Policy. The benefits under the Policy shall be reduced proportionately in the ratio of the total number of premiums paid to the original number of premiums payable under the Terms and conditions of the LIC SIIP Policy.

Revival

Revive the Policy within the revival period of three years from the date of the first unpaid premium or up to the date of maturity, whichever is earlier.

8. Free Look Period of LIC SIIP

If you are not satisfied with the “Terms and Conditions” of the Policy, the Policy may be returned within 15 days (30 days in case of Online sale) from the date of receipt of the Policy.

9. Surrendering LIC SIIP – Analysis

If the Policy is surrendered during the 5-year lock-in period: If you apply for surrender of the Policy during the 5-year lock-in period, then the Unit Fund Value after deducting the Discontinuance Charge shall be converted into monetary Terms. This monetary amount shall be transferred to the Discontinued Policy Fund. The Proceeds of the Discontinued Policy Fund in respect of the Policy shall be payable at the end of the lock-in period.

If the Policy is surrendered after the 5-year lock-in period: If you apply for surrender of the Policy after the lock-in period, then the Unit Fund Value as on the date of surrender shall be payable. There will be no Discontinuance Charge in LIC SIIP.

10. Advantages of LIC SIIP – Analysis

Policy Terms can be chosen as per preference.
Guaranteed addition will boost your Fund Value.
There are four options and you have the flexibility to switch between these funds.
Riders can be added to the base Policy.
Mortality charges are returned at the end of the Policy Term.
Partial withdrawal helps to meet emergencies.
Death Benefit can be received in installments under the Settlement option.

11. Disadvantages of LIC SIIP – Analysis

The Lock-in period is 5 years for surrendering and partial withdrawal.
Numerous charges are levied under the plan.
The Sum Assured is too low.
A loan option is not available.
Limited fund options are available when compared to other ULIP products available in the market.

12. Research Methodology Of LIC SIIP – Review

There is no Guaranteed Return for any market-linked product. In order to estimate the potential return, we may need to work out the Benefit illustration. With the help of this calculation, you may decide whether to invest in this plan or not. Now, let us calculate the Internal Rate of Return (IRR) for LIC SIIP.

Benefit Illustration of LIC SIIP -IRR(Internal Rate Of Return (i.e.) Interest Rate) Analysis

A 30-year-old male buys LIC SIIP for a Sum Assured of ₹ 12 Lakhs. The Annual Premium is ₹1,20,000 and the Policy Term and Premium Paying is 15 years. If he pays a premium for 15 years, then at the end of 15 years he would be receiving the Fund Value.

Male	30-years-old
Policy Term	15 years
Premium Paying Term	15 years
Premium paying mode	Annual
Premium (Rs)	1,20,000
Basic Sum Assured (Rs)	12,00,000
Type of Fund	Bond

In this benefit illustration, it is assumed that the Projected Investment Rate of Return that LICI will be able to earn throughout the Term of the Policy will be 4% p.a. or 8% p.a., as the case may be.

The projected investment rate of return is not guaranteed, and it does not represent the upper or lower limits of what you could receive because the value of your Policy is determined by a variety of factors, including future investment performance.

		At 4% p.a.		At 8% p.a.
Age	Year	Annualised premium / Maturity Benefit	Death Benefit	Annualised premium / Maturity Benefit	Death Benefit
30	1	-1,20,000	12,00,000	-1,20,000	12,00,000
31	2	-1,20,000	12,00,000	-1,20,000	12,00,000
32	3	-1,20,000	12,00,000	-1,20,000	12,00,000
33	4	-1,20,000	12,00,000	-1,20,000	12,00,000
34	5	-1,20,000	12,00,000	-1,20,000	12,00,000
35	6	-1,20,000	12,00,000	-1,20,000	12,00,000
36	7	-1,20,000	12,00,000	-1,20,000	12,00,000
37	8	-1,20,000	12,00,000	-1,20,000	12,00,000
38	9	-1,20,000	12,00,000	-1,20,000	12,00,000
39	10	-1,20,000	12,00,000	-1,20,000	12,00,000
40	11	-1,20,000	12,00,000	-1,20,000	12,00,000
41	12	-1,20,000	12,00,000	-1,20,000	12,00,000
42	13	-1,20,000	12,00,000	-1,20,000	12,00,000
43	14	-1,20,000	12,00,000	-1,20,000	12,00,000
44	15	-1,20,000	12,00,000	-1,20,000	12,00,000
		20,82,359		28,43,445

	IRR	1.80%		5.53%

From the above illustration, the IRR for 4% p.a. is resulting in 1.80% and the IRR for 8% p.a. is resulting in 5.53%.

The Fund Value at the assumed rate of return of 4% is ₹20.82 Lakhs and the IRR is 1.80%. Even if you have this money in your Savings Account, you will earn better returns.

The Fund Value at the assumed rate of return of 8% is ₹28.43 Lakhs and the IRR is 5.53%. This rate is not sufficient to meet your goals. As this rate is less than the inflation rate, LIC SIIP can’t be considered an investment choice.

13. LIC SIIP VS Other Investment Options

LIC SIIP is the Market linked product but the return is not up to the mark. So, in order to yield better returns, let us invest the same premium amount of ₹ 1,20,000 in other instruments. LIC SIIP provides insurance coverage and the opportunity to invest in market-linked products.

The same applies to our comparison. The premium is utilised for paying pure-Term insurance and the balance for investment.

i) LIC SIIP Vs. TermPure Term Insurance + PPF / ELSS

The TermPure Term Policy would cost ₹ 5000 for a Sum Assured of ₹ 12 Lakhs. The balance amount could be invested as per your choice. Here, to demonstrate the return for equity and debt, we have chosen PPF (debt) and ELSS (Equity).

TermPure Term Insurance
Policy Term	15 years
Premium Paying Term	15 years
Premium paying mode	Annual
Basic Sum Assured (Rs)	12,00,000
Premium (Rs)	5,000
Balance amount left for investment	1,15,000

PPF account matures after 15 years. ELSS Fund Value at the end of 15 years is subject to Capital Gains Tax. The Tax Calculation is given below.

		Term Insurance + PPF		Term insurance + ELSS
Age	Year	Term Insurance premium + PPF	Death Benefit	Term Insurance premium + ELSS	Death Benefit
30	1	-1,20,000	12,00,000	-1,20,000	12,00,000
31	2	-1,20,000	12,00,000	-1,20,000	12,00,000
32	3	-1,20,000	12,00,000	-1,20,000	12,00,000
33	4	-1,20,000	12,00,000	-1,20,000	12,00,000
34	5	-1,20,000	12,00,000	-1,20,000	12,00,000
35	6	-1,20,000	12,00,000	-1,20,000	12,00,000
36	7	-1,20,000	12,00,000	-1,20,000	12,00,000
37	8	-1,20,000	12,00,000	-1,20,000	12,00,000
38	9	-1,20,000	12,00,000	-1,20,000	12,00,000
39	10	-1,20,000	12,00,000	-1,20,000	12,00,000
40	11	-1,20,000	12,00,000	-1,20,000	12,00,000
41	12	-1,20,000	12,00,000	-1,20,000	12,00,000
42	13	-1,20,000	12,00,000	-1,20,000	12,00,000
43	14	-1,20,000	12,00,000	-1,20,000	12,00,000
44	15	-1,20,000	12,00,000	-1,20,000	12,00,000
		31,18,960		45,03,965

	IRR	6.61%		10.80%

In the above illustration, the IRR(Internal Rate of Return i.e. Interest Rate) of Term Insurance + PPF is calculated at 6.61% and the IRR of Term Insurance + PPF is calculated at 10.80%.

The final Maturity Value of the PPF Account is ₹ 31.18 Lakhs and the IRR for TermPure Term + PPF combo is 6.61%.

The Pre-Tax Value of the ELSS fund is ₹ 48.01 Lakhs and the Post-Tax Value is ₹ 45.03 Lakhs. The IRR for the TermPure Term + ELSS combo is 10.80% which is a Post-Tax Return.

ELSS Tax Calculation

Maturity Value after 15 years	48,01,627
Less
Purchase price	17,25,000
Long Term capital gains	30,76,627
Exemption limit	1,00,000
Taxable LTCG	29,76,627
Tax paid on LTCG	2,97,663
Maturity Value after tax	45,03,965

The investment return is higher than the inflation rate. Accumulation of funds through these investments will aid in achieving your goals. This is missing in LIC SIIP.

ii) LIC SIIP vs. LIC Jeevan Lakshya

Please read the complete review of The ‘LIC Jeevan Lakshya’. An Individual Life Assurance Plan from LIC is a Non-Linked, Participating Plan. It combines corpus savings with life insurance protection.

iii) LIC SIIP vs. LIC Jeevan Azad

Please read the complete review of the ‘LIC Jeevan Azad’. A Non-Linked, Non-Participating, individual savings plan for life insurance that combines savings and life insurance.

14. LIC SIIP vs. Other Investment Options – Review Conclusion

After comparing and analyzing ‘LIC SIIP’ with other investment plans, it is clear that Term Insurance + PPF or ELSS is a better option compared to LIC SIIP in the long run.

15. Final Verdict on LIC SIIP – Good Or Bad?

LIC SIIP combines the features of insurance and investment. When you pay a premium for the LIC SIIP, a part of it is allocated towards the insurance component to cover the life insurance risk. The remaining portion of the premium is invested in the chosen funds after deducting charges related to administration and fund management.

In case of the Policyholder’s demise during the Policy Term, the insurance component provides a Death Benefit to the nominee/beneficiary. Or else at maturity, the Policyholder receives the Fund Value based on the performance of the chosen funds.

The return on investment is not on par with other market-related instruments. The risk and the return are not proportionate. The yield should be greater than the economic inflation rate. Otherwise, the investment will not be beneficial to you. The Sum Assured is also too low in LIC SIIP.

But, you may wonder why insurance agents speak highly of this plan to you. It is for the ‘High agent commission’ that they get for selling this plan to you.

For life cover, buying a Term plan with adequate life cover would be the right choice. For your life goals, choose investments according to your risk appetite. If you need any assistance in selecting your investment, instead of searching for advice on social media platforms like Quora, Facebook, Twitter, etc. please Consult a Certified Financial Planner.

Lingesh MMG

20. September, 2023.

Na eppo tha financial goal la enna therunju kitta..enaku full support panna thuku thank you..🥰 friendly nalla pesuninga...

Ravi L

15. August, 2023.

Very knowledgeable and professional team, guided me with the precise financial solutions and timely suggestions.

Hardik Dave

5. July, 2023.

Holistic Investment is really nice and trust worthy financial planner. They plan things in realistic manner and also consider future dimensions of items also. They are always available for small or big queries, and also share knowledge and help you become more financial literate, and take right decisions in all financial matters.

Dr. Padmakar Wagh

27. June, 2023.

Mr Ramalingam who is the Director of Holistic investments has a excellent financial planning knowledge, the entire Holistic team has been very helpful in my financial planning journey and execution. This is my third year of financial planning with Holistic investments and so far I am satisfied with the progress I have made.

Binamra Dash

13. June, 2023.

Very knowledgeable team. Guided me properly with my concerns.

Murugan Bala

16. May, 2023.

I have been investing through Holistic for the past 4 years and my experience with them have been really good. The team of Rajan and Ramalingam doing excellent services in meeting my needs through proper guidance on investment options customized. Theya re always available on any specific needs time to time.I would recommend their services to my friends and colleagues too.

Neeraja R K

15. May, 2023.

Working with holistic investment planners was a really wonderful experience for me. For me the entire team had been very supportive in all ways. Their working strategy is well planned and methodical. They always keep me informed and updated about my investments, so that i can take informed decisions. The team first helps us understand the basics of investments, then they collect data, work with the data and then provide investments solutions according to our goals which i find it the best. Good luck to the entire team.

deepika kulkarni

21. April, 2023.

We have availed holistic service from last couple of years and are very happy with our decision. Their systematic approach has helped us plan our finances and meet our goals. They provide very comprehensive and detail plan and resource management every 6 months which ensures we are on right track to achieve our goals. Rajan and Ramalingam from holistic are always there to help us with our queries. They have also accommodated any changes to our goals or resources mid year in a professional manner.

Ashook Panneerselvam

21. March, 2023.

For the past year, I have been interacting with Holistic Investment. I frequently read Nanayam Vikatan, which is a publication owned by the Vikatan family, and I was impressed by their financial advice. My brother also suggested holistic investing, and he also got excellent financial advice. Holistic Investment follows a methodical approach that I really liked because they first fully understand our financial situation "As Is," which includes "Assets" and "Liabilities," as well as our short-, mid-, and long-term goals, on the basis of which they provide a detailed plan on how to achieve our goals for which they are recommending various investment options. Even in the investment advice, why do they suggest particular mutual funds and what is the justification behind it, which adds transparency to the client. One essential factor is that they are always available. Even if I needed to make some urgent financial decisions, they were very helpful and kind to answer my questions via phone calls, WhatsApp messages, and emails. I was very happy with their service. Periodic reviews are also crucial, even though I have forgotten that they occur once every three months, and I also intend to renew this year.

Mahesh S

19. February, 2023.

I have availed Holistic investment service for last 1yr against my early retirement decision. they provided me comprehensive detailed report how to move ahead with my existing resources. moreover, they are available to me whenever i have any doubt.. highly recommend others to avail their service

LIC SIIP Plan Review: Should you buy?

Table of Contents

1. An Overview of LIC SIIP

2. Features of LIC SIIP – Analysis

3. Eligibility Criteria of LIC SIIP – Illustration