Why not to invest in Reliance SIP+Insure Plan

Listed below are reasons why you should not invest in Reliance SIP+Insure.

7 Reasons for not investing in Reliance SIP+Insure Plan.

1] The type of Insurance is Group Insurance Policy. The cheapest and easiest form of insurance policy available with any insurance company.

2] Only the 1st Holder is insured. So, in case, a couple subscribes to SIP +Insure then only one person can avail of the insurance benefits.

3] The Sum Assured, in case of death is not paid to the nominee, but shall go back to the scheme of the AMC(Reliance Asset Management Company). Remember, the scheme benfits more than the dependents of the deceased in case of death of the holder.

4] Huge exit load of 2% for discontinued SIP. If you agree to pay your SIP for 11 yrs but pay only for 10 long and tiring yrs, still the scheme charges you 2% for the remaining 1 yr which you do not wish to continue.(learn to calculate exit load charges)

5] No insurance upto 90 days (exception to it is accident cases only) , i.e 3 months. In case of death within 3 months, except of accidental deaths, the scheme shall not pay the dependents a penny.

6] The dependents will end up paying the scheme 2% back if the death occurs within 3 months due to reasons other than accidental death.

7] Minimum period of investment is 3 yrs and Rs 2,000 for each installment, i.e totalling to Rs 36,000 for Group insurance worth less than 10 lacs.

There are group insurance polices availables at a very low costs, which can be availed of for insurance requirements. Insurance worth of Rs 10 lacs may or may not be sufficient for your entire family’s needs.

The Exit loads are relatively very high even if investor is paying his SIP for a long period, if he discontinues even 1 day prior, he ends up paying 2% Exit loads.

Sunny Side to life :

SIP is also available without this offer.

Related Posts Only (manually created not automatically generated)

Reliance SIP + Insure

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13 thoughts on “Why not to invest in Reliance SIP+Insure Plan

  1. Pingback: Why not to invest in Reliance SIP+Insure Plan · Mutual-Fund-Investing.ExplainedOnline.Net

  2. The article is right. That is the reason I recommend my clients to invest either in Birla sunlife Century Sip or DWs Tax Saving Fund, both of which offer sip without the annoying conditions put by Reliance. Especially, DWS insurance offer is the best, there is no astrek or star. They offer you 5 times your investment as Free Life Insurance. It is as simple as that.
    For more details you can visit my blog goodfundadvisor.blogspot.com

    Like

  3. 1] The type of Insurance is Group Insurance Policy. The cheapest and easiest form of insurance policy available with any insurance company.

    My Answer: You have to pay for group insurance or any insurance, but in SIP + Insure, the insurance is free.

    2] Only the 1st Holder is insured. So, in case, a couple subscribes to SIP +Insure then only one person can avail of the insurance benefits.

    My Answer: You can take two SIP’s, one on your name and one on your spouse’s name. In this case both the people get free insurance.

    3] The Sum Assured, in case of death is not paid to the nominee, but shall go back to the scheme of the AMC(Reliance Asset Management Company). Remember, the scheme benfits more than the dependents of the deceased in case of death of the holder.

    My Answer: The Sum Assured goes to Nominee’s account and is invested at the prevailing NAV the day the funds are received from the insurance company. So it does go to the nominees account. He has to pay an exit laod of 2% if he wishes to withdraw the funds.

    4] Huge exit load of 2% for discontinued SIP. If you agree to pay your SIP for 11 yrs but pay only for 10 long and tiring yrs, still the scheme charges you 2% for the remaining 1 yr which you do not wish to continue.

    My Answer: An exit load of 2% is very reasonable. The entry loads and surrender charges in ULIPS are lot higher. The charges in SIP+Insure are extremely reasonable compared to any ULIP out there. There are better products from DWS, Birla Sunlife and Kotak which do not charge exit load if invested for certain number of years.

    5] No insurance upto 90 days (exception to it is accident cases only) , i.e 3 months. In case of death within 3 months, except of accidental deaths, the scheme shall not pay the dependents a penny.

    My Answer: Look at the positive side of this. You still get free insurance after 90 days for upto 15 years.

    6] The dependents will end up paying the scheme 2% back if the death occurs within 3 months due to reasons other than accidental death.

    My Answer: As I have said 2% exit load is very reasonable for something you are getting free.

    7] Minimum period of investment is 3 yrs and Rs 2,000 for each installment, i.e totalling to Rs 36,000 for Group insurance worth less than 10 lacs.

    My Answer: The 36,000 is investment. Not charges. So they lie in your investment fund and can be withdrawan with a 2% exit load. What ever you pay for Group insurance is gone in the air. You will never get it back.

    There are group insurance polices availables at a very low costs, which can be availed of for insurance requirements. Insurance worth of Rs 10 lacs may or may not be sufficient for your entire family’s needs.

    My Answer: An individual cannot apply for group insurance. So everyone is not eligible. Neverthless, group insurance still costs money. SIP + Insure is free.

    The Exit loads are relatively very high even if investor is paying his SIP for a long period, if he discontinues even 1 day prior, he ends up paying 2% Exit loads.

    An exit load of 2% is equal to an entry load of 2%(you will be suprised if you do the math). There are other free insurance schemes from DWS, Birla Sunlife and Kotak where the exit load is nill after a certain period of time.

    Thank You,
    Raj (http://ulip.blogspot.com)

    Like

  4. @RGV, RAKESH, SRIKANT.

    Appreciate your comments.

    @RGV,
    Your blog mention very little about ULIP’s. Expected more posts on ULIP’s.

    My opinion..

    1] a)Group insurance is one of the most easiest form of insurance. 10 office boys, hand cart vendors can subscribe to a group insurance policy.

    b) Insurance is not technically free as the AMC pays to genaral insurance company through the investors money.

    2] Two SIP’s is perhaps not feasible. Who shall be the nominee on either of the schemes. e.g Husbands nominates wife and wife nominates husband. however, they cannot both have entire cover under insurance guidelines. They need to disclose their existing cover. Which in effect reduces the cover to almost half.
    3] the point here is perhaps based on assumption that group insurance is cheaper than an exit load of 2 %.{need comments on this}
    4] Later to to be updated…

    Its a good product, but purists would beg to differ on the same.

    Like

  5. Dear OMF,
    Thanks for visiting my blog and your comments.

    I have compared 2% exit load to pure term insurance in my post on SIP + Insure on moneycontrol message board. I have not compared against group insurance but similar comparision can be done.

    http://www.moneycontrol.com/india/messageboardblog/08/02/message_thread/2170558/2866146#m2866146

    Regarding free insurance from mutual funds. The following is the order of priority.

    First : DWS Tax Saving (You get insurance equal to 5 times your investment. No need to continue to SIP. No need to pay any exit load. Only time insurance ceases is when you make withdrawals. Max insurance cover 5 Lakhs)

    Second : Birla Sunlife Century SIP (You do not pay 2% exit load if you are invested for 3 years. You continue to get insurance cover even if you stop SIP after 3 years as long as you don’t withdraw funds. Max insurance cover is 20 Lakhs)

    Third : Kotak Star Kid Facility (You do not pay 2% exit load if you are invested for 5 years)

    Fourth: Reliance SIP + Insure (Exit load of 2% until maturity. But the good thing about this plan is that you can get 10 lakhs insurance cover by subscribing for SIP of Rs.3000 per month for 15 years. This plan gives the maximum insurance for minimum SIP installment. So it is not bad either)

    I will be trying to post more on ULIPS on my blog. Right now I am comparing all the different ULIPS out there. I will make a post once I have analyzed all the data as to which ULIP’s are good and which ULIP’s are bad.

    Thanks,
    Raj (ulip.blogspot.com)

    Like

  6. Hi Online Mutual Fund,

    I’m contacting you in regards to an email I sent to you last month about a partnership, have you had a chance to think about it?

    If you have any questions or would more information, please advise me and we can go from there.

    Kind Regards,
    Andrew Knight

    Like

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