Recently ICICI Direct launched insurance protection for it’s mutual fund investors which is called as “Secure SIP with Secure Mind”. Let us look at it’s features and was it good to take.
First thing about this product is, it is combination of critical illness+Accidental Insurance. So for natural death you will not get any amount from this policy. Hence bear in mind that this is not the life insurance but a general insurance which offers bundle of features. This is the product which will be available for the ICICI Direct customers only but not ICICI Mutual Fund. Hence you need to have account with ICICI Direct to avail this facility. Below are the offerings from this policy.
- Lump sum benefit on diagnosis of 9 named major critical illness diseases, surgeries and procedures (Cancer, end stage renal failure, multiple sclerosis, major organ transplant, heart valve replacement, coronary artery bypass graft, stroke, paralysis and myocardial infarction).
- Accidental death/Permanent Total Disability due to accident.
- 2% of Sum Assured per month (max for 3 months) in the event of Loss of Employment in case of salaried.
Now the biggest question is, is it free?? I think no..because from the FAQ of the this plan, it is clearly written that while buying mutual fund you need to select it and buy it. But I don’t know how much they will charge. Because I neither have ICICI Direct Account nor that information was not available on it’s home page. Also bear in mind that in case of natural death your nominee will not get anything. Because it is general insurance not life insurance. So lot of drawbacks with this scheme and thought to point them below.
- This is not free. Premium will be based on your age, SIP amount and SIP period.
- This is only available for ICICI Direct customer, hence don’t think that this will be scheme offered by ICICI Mutual Fund.
- No benefit in case of natural death.
- Minimum age at entry is 20 yrs and maximum is 50 yrs.
- Minimum Sum Assured available is Rs.60,000 and maximum is Rs.15,00,000. I don’t think maximum limit will satisfy anyone.
- Insurance coverage will be 10 times of your SIP. So to have Rs.15,00,000 SA (which is maximum available SA in this), you have to invest monthly Rs.12,500.
- Maximum availability will be 5 yrs which will hinder for long term investors. Because if they not get the same policy cover after 5 years then they need to look for other alternatives.
- If you cancel your SIP or defaulted then this insurance cover will be automatically stopped. Even for modification of SIP amount too this policy get cancelled 🙂
- If you are existing customer of ICICI Direct then you will not be eligible for this plan. To avail this you need to invest fresh.
- But premium you will to avail this plan will be available for tax benefit under Sec 80D.
- If you cancel this plan then you will not receive any premium back.
When mutual funds are available directly then this plan seems to me costlier. Because you need to pay SIP charges of Rs.30 or 1.5% of your investment (whichever is lower) more than that you need to pay for this plan also. In my view premium will also be costlier when you purchase same featured plans from other insurers. Because this plan will be provided by ICICI Lombard whose premiums are always costlier than their competitors.
So finally my review is, go directly or invest through sites like FundsIndia if you are online savvy (which offers free account and no charges for SIP) and opt for insurance coverage separately.
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