Century SIP -A SIP with free insurance

Systematic Investment Plans (SIPs) are one the best ways to create wealth for your future. Investing a small amount from your earnings each month goes a long way in creating financial stability for you and your family. Another tool which we recommend our clients to keep in their financial war chest is Insurance. This ensures your family members do not suffer in case of any untimely event.
To this point, a few Mutual Fund AMCs are now offering a product that provides insurance cover to its investors at no extra cost. Let us read on below:

Century SIP- Free insurance with mutual funds
How do you feel when we tell that you can get an insurance cover at no extra cost in addition to the benefits of your SIP investments? This is what a Century SIP offers.
Under the Century SIP plan, offered by certain Mutual Fund AMCs, you get free Life Insurance of 100 to 120 times of your monthly SIP installment. Yes you read it correctly. It is free till the time you keep the SIP going. There are a few limits specified by AMC (i.e. upto Rs 50 Lakh) those can be found in the table below. There are a few caveats to this that one should take into account –
  1. The insurance cover ceases if any redemption is made from the investment
  2. A minimum of SIP investment is required for 3 years
  3. In case you stop your SIP investment, the insurance benefits continue
  4. A declaration of health is also required to be provided at the time of initiating the SIP

As of now, only 4 AMCs are providing Century SIP for customers. The table below has additional details.

Please note that this benefit is available only with select equity mutual funds within the AMCs. We advise that you check with your advisor whether the insurance cover is available with the scheme selected by you.
Why are AMCs providing this benefit?
One of the major reasons why AMCs are offering the Century SIP plan is to get a commitment from the subscribers to be a long term investor. In volatile times, it is quite common to see investors withdrawing their hard earned income at sub-optimal levels.
Providing insurance benefits may retain the investor through the longer term.
Our recommendation: We will advise that one should not buy the Century SIP plan only for its insurance cover. The fund that you invest in should be suitable for you as per your risk profile and requirements. The insurance benefit is just the icing on the cake.
In some cases, the insurance cover provided by the Century SIP plan may not be sufficient for an individual. As a result, you should also consider a separate term insurance policy to augment your insurance coverage.
Happy investing!
If you want further details, do write to us at contact@finchikitsak.com or call us at +91-99588-10580.


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