Friday, July 25, 2008

Birla Century SIP plan! Investment plus Insurance

There is an offering from Birla Sun Life Mutual Fund called Birla Century SIP plan.
The Birla Century SIP plan claims to offer a unique combination of Investment through SIP or Systematic Investment Plan along with FREE insurance to the investor – FREE because the investor does not have to pay separately for the premium of insurance.

The benefits of Birla Century SIP plan are as follows:
• Wide Coverage: 18 years to 46 years for investor age group
• Cover continues till 55 years
• No medical check-up only a signed declaration of good health from investor
• The minimum investment monthly SIP amount is Rs. 1000 per month.
• Entry load of 2.25% and exit load of 2% upto 3 years and Nil from 3 year onwards.
• If SIP discontinues within 3 years of 1st installment: Life Cover ceases, If SIP discontinued after 3 years of 1st installment: Life Cover continues at fund value subject to maximum of 100 times monthly SIP value.

Insurance cover detail in Birla Century SIP plan are as follows
Year 1 – Insurance coverage till 10 times of Monthly SIP Installment
Year 2 – Insurance coverage till 50 times of Monthly SIP Installment
Year 3 onwards – Insurance coverage till 100 times of Monthly SIP Installment, that's why the name “Century SIP”. However, the maximum insurance value is capped at 20 Lakh Rs., irrespective of your SIP amount and investment horizon.

There are a few exceptions in which the insurance cover will not be available:
• Death due to suicide
• Death within 45 days of SIP start except when the death is due to accident
• Death due to pre existing diseases – this is the biggest and most ambiguous exception – in case someone dies of a disease like heart attack, there are always issues in proving that the disease was or was not pre-existing.

Its a very good option for investors who are looking for investment as well as insurance. Much better then your traditional insurance products or ULIP products.

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