Scheme mechanism

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We would look at each of the insurance features one by one, as the condition and calculation arrived at the sum insured is quite different. Taking the case of Reliance Mutual Fund's sip+insure, suppose one says an investor takes a monthly SIP of Rs 12,000 for 5 years i.e., 60 months, then the total investment would be Rs 7.2 lakh. Insurance benefit can only be availed after the natural or accidental demise of the holder.

Here, in the case of Reliance MF, one must note that one has to complete 90 days after the registration of the SIP to activate the insurance benefit. But this condition is not applicable in case of accidental death.

Now, if the holder passes away before completing the 2nd year of the SIP tenure, the sum insured can be received by the appointed nominee is the number of installments remaining multiplied by the SIP amount. If the person passes away after the completion of the 2nd year, the insurance benefit would be twice the total number of installments registered by the holder (here it is for 60 months) multiplied by the SIP amount, so the sum insured comes to Rs 14.4 lakh. Post the completion of the SIP tenure, the insurance benefit ceases to exist. (Refer to the table for detail view on the feature)

Here, after the nominee gets the sum insured, the total amount would be invested in the designated scheme. The price would be the closing net asset value (NAV) on the date of which the cheque for insurance claim settlement is received by the asset management company (AMC) from the insurance company. If the nominee redeems the balance units or switches to other schemes or a different fund house before tenure completion, an exit load of 2% would be charged. There is no exit load if redemption happens after the tenure completion.