LIC SIIP Insurance Plan no 852 Review

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LIC SIIP – ULIP Plan No 852 – Should you invest?
March 4, 2020  Suresh KP
LIC SIIP – ULIP Plan No 852 – Should you
invest?
This week LIC has launched two ULIP
Plans. We covered LIC SIIP (Systematic
Investment Insurance plan) plan earlier.
LIC’s other plan is SIIP which means
Systematic Investment Insurance Plan. As
indicated earlier LIC is fond of launching
new insurance plans in March every year
and aims for salaried individuals who want
to save tax in last minute. This is single
premium and Unit Linked Insurance Plan (ULIP). In this article we would review LIC
SIIP (Systematic Investment Insurance plan) No 852, its features, plan options,
positives and hidden factors.
LIC fond of launching March Plans
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LIC launches tax saving insurance plans every year. This is just to grab the attention of
salaried individuals who do not plan ahead of time and rush in the last minute for tax
saving. This time they launched two plans 1) LIC SIIP (Systematic Investment Insurance
plan) No 852 and 2) LIC Nivesh Plus Plan No 849. Both these plans are launched on 2
March, 2020.
LIC SIIP Plan is evolved from typical mutual fund SIP – Systematic Investment Plan. LIC
SIIP refers here, as LIC ‘Systematic Investment Insurance Plan’. It is LIC SIP Policy in
simple terms
Read: LIC launches Nivesh Plus Insurance Plan – Should you opt?
Features of LIC SIIP (Systematic Investment Insurance plan) No 852
Here are the key features.
1) This is a non participating regular premium paid policy.
2) This is a ULIP plan. The proposer would be allocated fund units like any other mutual
funds.
3) Eligibility for guaranteed additions at specific intervals like end of 6 years, 10 years,
15 years, 20 years and 25 years.
4) Policy tenure is 10 to 25 years.
5) You can invest in 4 fund options.
6) One can opt for 4 switches between the funds in a policy year. Beyond this, one need
to pay Rs 100 per switch.
7) Like any ULIP Plan, this plan too has 5 year lockin period.
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8) If policy holder want to surrender this insurance plan, ULIP fund value as on date is
paid, after the lock-in period of 5 years.
Eligibility to purchase LIC SIIP 852
Following is the eligibility:
1) Min age of entry – 90 days
2) Max age of entry – 65 years
3) Max Age of maturity – 85 years
4) One should propose only for themselves
Are there any riders in this LIC SIP Policy?
1) Accidental benefit rider is available as an optional rider by payment of additional
premium.

4. 2) The benefit cover under this rider shall be available only during the premium paying
term of the base plan or before the policy anniversary, on which the age nearest
birthday is 70 years, whichever is earlier.
3) Maximum Accident Benefit Sum Assured: An amount equal to the Basic Sum Assured
under the Base Plan subject to the maximum of Rs.1.00 Crore overall limit taking all
existing policies.
What are premium options available with this plan?
Proposers can pay monthly, quarterly, half yearly and yearly premiums in this plan.
What are Sum Assured Options in LIC SIIP Plan 852?
Sum assured would depend on the proposers age
1) If the proposer age is < 55 years, sum assured would be 10 times of annualized
premium.
2) If the proposer age is > 55 years, sum assured would be 7 times of annualized
premium.
What are the Investment Funds in LIC SIIP 852?
There are basically 4 funds available in this SIIP Plan from LIC.
1) Bond Fund
Investment in Govt Securities / Corporate Debt – 60% to 100%
Short Term investments incl money market instruments – 0% to 40%.
The risk profile is Low Risk.
2) Secured Fund

5. Investment in Govt Securities / Corporate Debt – 45% to 85%.
Short Term investments incl money market instruments – 0% to 40%.
Investment in Equity – 15% to 55%.
The risk profile is Lower to Medium Risk.
3) Balanced Fund
Investment in Govt Securities / Corporate Debt – 30% to 70%
Short Term investments incl money market instruments – 0% to 40%.
Investment in Equity – 30% to 70%
The risk profile is Medium Risk.
4) Growth Fund
Investment in Govt Securities / Corporate Debt – 20% to 60%
Short Term investments incl money market instruments – 0% to 40%.
Investment in Equity – 40% to 80%
The risk profile is High Risk.
What are Guaranteed Additions in this ULIP Plan 852 of LIC?
LIC would give guaranteed additions in SIIP Plan as the percentage of the annualized
premium paid at specific intervals indicated below. These would be added in terms of
units to your fund value. However, the policy should be in force.
End of 6 years – 5%
End of 10 years – 10%
End of 15 years – 15%

6. End of 20 years – 20%
End of 25 years – 25%
What is the date of commencement of risk?
Insurance companies keep putting various conditions to confuse policy holders. One of
them is, the date of commencement of risk. In this SIIP of LIC, the date of
commencement of risk is computed as below:
a) Age of entry less than 8 years – The risk would commence after 2 years from policy
date or immediately completion of 8 years of age whichever is earlier.
b) Age of entry greater than 8 years – The risk would commence immediately from the
date of commencement of policy.
What are various benefits available in SIIP Plan of LIC?
Here are the details of benefits:
1) Death Benefit:
a) In case of death before the commencement of risk, the amount equal to fund value
would be paid.
b) In case of death after the commencement of risk, the higher of the following would
be paid:
Basic Sum assured
Fund Value
105% of total premiums paid
2) Maturity Benefit:
On survival of the policy holder, fund value would be paid as maturity benefit.

7. What are the various charges in LIC SIIP (Systematic Investment Insurance plan) ULIP
Plan?
Since this is ULIP plan, one would think about various charges in this plan. Let us review
them now.
1) Premium Allocation Charges: In simple terms, this is like charges collected at the
beginning of the policy. These charges are reduced from your single premium and
balance is used to purchase the units in the insurance plan. Here are the premium
allocation charges:
i) Offline Sale
First Year – 8%
2 to 5 year – 5.5%
6 year onwards is 3%
ii) Online Sale
First Year – 3%
2 to 5 year – 2%
6 year onwards is 1%
2) Mortality Charges: These are charges which are taken at the beginning of the policy
to have insurance cover. Mortality charge will depend on the sum at risk, which is the
difference between the basic sum assured and the unit fund value as on the date of
deduction of charge.
3) Fund Management Charges: This is management fees to run the funds under this
plan. This is similar to expense ratio in mutual funds which is only fund management
fees.
The fund management charges are 1.35% of the total fund value in a year.
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8. In case of discontinued policy fund, it would be 0.5% of the fund in the year.
4) Discontinuation Charges
This charge would be levied by cancelling the appropriate units in the policy as on the
discontinuance of the policy.
1 year – Lower of 20% of annualised premium or fund value. The max is Rs 3,000.
2 year – Lower of 15% of annualised premium or fund value. The max is Rs 2,000.
3 year – Lower of 10% of annualised premium or fund value. The max is Rs 1,500.
4 year – Lower of 5% of annualised premium or fund value. The max is Rs 1,000.
5 year onwards – Nil
How to check LIC siip 852 calculator?
If you want to calculate premiums and benefits under LIC SIIP 852, you can check this
LIC Link
Positive Factors in LIC SIIP ULIP Plan 852
1) Guaranteed additions of 5% to 25% of annualized premiums at specific intervals.
2) LIC would refund mortality charges on maturity of this insurance plan.
3) The option to choose among the 4 funds.
4) You can do 4 free switches in a policy year.
You may like: ICICI Pru launches Precious Life Term Plan – How good is this?
Hidden Factors / Negative Factors in LIC Systematic Investment Insurance plan ULIP
Plan
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9. Here are few negative factors:
1) If the age of the proposer is above 55 years, the sum assured would be only 7 times of
annualized premium.
2) Guaranteed Additions indicated are paid at specific intervals, but these are paid only
on annualized premium and not cumulative premium. Even if you do simple FD, you can
get up to 6 to 7.5% returns per annum.
4) Premium allocation charges are high. If you have taken policy offline, the charges are
as high as 8%.
5) If you consider premium allocation charges, fund management fees, mortality
charges, the overall allocation charges are still high.
LIC SIIP 852 – Should you invest?
As indicated in my earlier article, LIC targets salaried individuals that too who are in a
last minute tax rush in March. One should consider the positives and negatives in this
SIIP plan of LIC. There are several good tax saving investment options like ELSS Funds,
PPF etc., which are far better than such plans. Take a step-back and think whether you
need this insurance cum investment scheme, you would have the answer.
Readers, what is your view about this SIIP Plan from LIC?
If you enjoyed this article, share it with your friends and colleagues through Facebook
and Twitter.
Suresh KP
LIC SIIP – Systematic Investment Insurance plan No 852 Review
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