Formula
F′ = F + P × (1 − at) − A − (qx / 12) × R / 1000
F = F′ × (1 + i)1/12 × [2 − (1 + f)1/12]
R = max(S, F, 1.05% × premiums paid) − F
where
- F
- fund value, worked out each month
- P
- the premium, added in the months it is paid
- at
- premium allocation charge in policy year t
- A
- monthly policy administration charge
- qx
- mortality charge a year per ₹1,000 of sum at risk, at age x
- R
- sum at risk
- S
- sum assured
- i
- assumed gross return, 4% or 8% a year as IRDAI prescribes for illustrations
- f
- the fund's management charge a year
Guaranteed additions are credited at the end of the policy years LIC names. At maturity the mortality charges deducted are added back. Neither rate is guaranteed; the fund can earn more or less.
*Source LIC SIIP brochure (PDF)
In short (tl;dr)
SIIP is LIC's regular premium unit linked plan with four funds, from bond to growth. Cover is 10 times the annual premium (7 times from entry age 55). LIC adds 5% to 25% of one annual premium to the fund at years 6, 10, 15, 20 and 25, and refunds the mortality charges if the policy reaches maturity.
What LIC SIIP is
Premiums start at Rs 42,000 a year or Rs 3,500 a month. Offline, LIC keeps 8% of each premium in the first year, 5.5% in years 2 to 5 and 3% after that; online the rates are 3%, 2% and 1%. The rest buys units in the fund you choose, and every fund charges 1.35% a year through its NAV.
From year 6 a flat policy administration charge of Rs 150 a month applies, rising 5% a year. Mortality charges come out monthly while the fund is below the sum assured, and LIC refunds all of them at maturity.
Guaranteed additions arrive at the end of years 6, 10, 15, 20 and 25, worth 5%, 10%, 15%, 20% and 25% of one annual premium, provided every premium has been paid.
- Premiums from Rs 3,500 a month or Rs 42,000 a year
- Four funds, FMC 1.35%
- Cover of 10 times the annual premium (7 times from age 55)
- Guaranteed additions of 5% to 25% of one annual premium
- Mortality charges refunded at maturity
Who can buy it
| Entry age | 30 days (completed) to 65 (nearer birthday) |
|---|---|
| Maturity age | 18 to 85 |
| Policy term | 10 to 25 years |
| Premium | Yearly, Half-yearly, Quarterly, Monthly (NACH); maximum No limit, subject to LIC's board approved underwriting policy. |
| Sum assured | 10 times annualized premium (entry up to 54); 7 times annualized premium (entry 55 to 65) |
- The sum assured multiple is fixed by entry age: 10 times up to 54, 7 times from 55.
- For a child under 8 at entry, risk starts on the earlier of 2 years from commencement or the anniversary on or after age 8.
Charges that come out of the fund
The premium allocation charge is taken from each premium before it buys units:
| Policy year | Through an agent | Online |
|---|---|---|
| 1 | 8% | 3% |
| 2 | 5.5% | 2% |
| 3 | 5.5% | 2% |
| 4 | 5.5% | 2% |
| 5 | 5.5% | 2% |
| 6 onwards | 3% | 1% |
| Fund | Fund management charge | Equity |
|---|---|---|
| Bond Fund SFIN ULIF00124/12/18LICULIPBND512 | 1.35% a year | Nil |
| Secured Fund SFIN ULIF00224/12/18LICULIPSEC512 | 1.35% a year | 15% to 55% |
| Balanced Fund SFIN ULIF00324/12/18LICULIPBAL512 | 1.35% a year | 30% to 70% |
| Growth Fund SFIN ULIF00424/12/18LICULIPGRW512 | 1.35% a year | 40% to 80% |
A mortality charge is taken every month on the sum at risk, and the total is added back to the fund at maturity. Switching: 4 free a year, then ₹100 each. Partial withdrawal: ₹100. Tax applies to charges at the prevailing rate. LIC's current illustration applies none; an older brochure still linked from the plan page applied 18%.
- Premium allocation charge not more than 12.5% of annualized premium in any year
- Policy administration charge not more than Rs 500 a month
- Partial withdrawal, switching and miscellaneous charges not more than Rs 500 each
- Fund management and discontinuance charges within IRDAI limits
What it pays
On death. The highest of the sum assured, the fund value and 105% of premiums paid, less partial withdrawals in the two years before death.
At maturity. The fund value plus a refund of every mortality charge deducted.
There is a 5-year lock-in: nothing can be withdrawn and a discontinued policy's money sits in the Discontinued Policy Fund until it ends.
- Allowed after the fifth policy anniversary if all premiums are paid; for a minor, only from age 18.
- Up to 20% of the fund a year in years 6 to 10, 25% in 11 to 15, 30% in 16 to 20, 35% in 21 to 25.
- The fund left must be at least 3 annualized premiums.
- Future guaranteed additions are scaled by fund value / (fund value + total withdrawals).
LIC's own illustration, run through this calculator
LIC's brochure prints a benefit illustration for age 35, 15-year term, rs 60,000 yearly, sum assured rs 6,00,000, offline, bond fund (current brochure). The same inputs through this calculator give these fund values:
| Year | LIC at 4% | This calculator | LIC at 8% | This calculator |
|---|---|---|---|---|
| 6 | ₹3,68,874 | ₹3,68,874 | ₹4,22,761 | ₹4,22,761 |
| 10 | ₹6,53,967 | ₹6,53,967 | ₹8,15,018 | ₹8,15,018 |
| 15 | ₹10,59,263 | ₹10,59,263 | ₹14,71,897 | ₹14,71,897 |
Fund values at the end of each policy year; the final year is the maturity value, which includes the mortality charges refunded at maturity. A difference of a rupee is rounding in LIC's printed table.
Good for, and what to watch
Good for. A regular saver who wants a choice of debt and equity funds and a defined cover multiple, over 10 to 25 years.
Watch out. The first year allocation charge is 8% offline. Money is locked in for five years, and stopping early moves it to the Discontinued Policy Fund.
Sources: LIC's page for this plan, sales brochure (PDF) and policy document (PDF).
Other unit linked plans: Index Plus, Protection Plus, Nivesh Plus.
LIC SIIP: common questions
What does LIC's example show for SIIP?
A 35 year old paying Rs 60,000 a year for 15 years into the Bond Fund, with Rs 6 lakh cover, ends with Rs 10,59,263 at 4% gross or Rs 14,71,897 at 8%.
Is GST deducted from the fund?
LIC's current illustration applies none. An older SIIP brochure applied 18% to every charge and showed about Rs 35,000 to Rs 51,000 less at maturity for the same policy.
Can I choose the cover?
No. It is 10 times the annual premium for entry up to age 54 and 7 times from 55 to 65.
How much can I withdraw?
From year 6, up to 20% of the fund a year, rising to 35% in years 21 to 25, keeping at least three annual premiums in the fund.
Spot something wrong?
If a figure on this page disagrees with an LIC premium notice, bonus statement or benefit illustration, tell us and we will check it against the brochure. Anything else you think this page gets wrong is just as welcome.