Take a SIP of Reliance life plan

RELIANCE CAPITAL ASSET Management Ltd, the investment manager of Reliance Mutual Fund, will offer life insurance cover to its investors. Investors opting for systematic investment plan (SIP) in any of the fund’s 11 equity-linked schemes will be offered a Life Insurance cover of up to Rs 10 lakh. Upon the premature death of an investor opting for an SIP between three and 15 years, Reliance Mutual Fund will pay the outstanding unpaid SIP installments. The scheme came into effect on May 12. An SIP allows an investor to invest a fixed sum of money every month in a fund on a pre-determined date. This regular investment in a particular plan helps an investor in averaging out highs and lows of the markets.

In 2005, the fund house had offered a personal accident cover with its equity-linked saving scheme. The personal accident death cover was for a maximum sum of Rs 5 lakh and was linked to the investment made by an individual and not with the capital appreciation of the investment. For an investment of Rs 10,000 or less, the level of cover was Rs 50,000. For an investment of Rs 10,001-25,000, the insurance cover was Rs 2 lakh and for investments between Rs 25,001 and Rs 50,000, the cover was Rs 3,00,000. The fund house had capped the level of cover at Rs 5 lakh for an investment amount greater than Rs 50,001. The life insurance scheme being offered now will serve as an incentive for investors to go for the systematic investment plan.

The fund house, however, has not elaborated on whether the life cover will be free of cost or investors will have to pay a premium for theinsurance. However, even if investors have to pay a premium, it won’t be much considering that it would be a group life cover. Investors will find it beneficial to go for a long-term SIP, say for more than five years. Over the long term, it is seen that equity investments give higher return than any other assets with a comparatively lower risk.

news source : http://www.telegraphindia.com/