LIC ULIP plan – SIIP (852) | Should you buy in 2021?


Nowadays ULIP (Unit-linked Insurance plan) has become popular in the market because of the returns it provides over the period of time. But, what is a ULIP plan? “A ULIP plan is a combination of mutual funds as well insurance that gives dual benefits of life coverage and Investment to the people. On average it gives a return between 8-16% (depending upon the fund selected), which makes it the best investment plan in its category. But the question arises that “should you invest in a ULIP plan?” or “is it risky?”, you will get all the answers by the end of this blog.


LIC offers two types of ULIP policy which is Nivesh plus (849) and other is SIIP (852) (Systematic investment insurance plan). Both policies are best in their own terms but In this blog, we will focus only on SIIP. Mutual funds have SIP ( systematic insurance plan ) which means they don’t offer any kind of Insurance or life coverage to their subscribers apart from this ULIP plan provides many other benefits that mutual funds don’t offer.


Mutual funds are the funds that are mutually collected from the people and then invested in a particular company, there is an involvement of a fund manager who makes investment decisions on behalf of the investor to provide maximum returns and charges some amount of commission from the fund valued amount.

Whereas ULIP is the latest financial product in the market offered by the insurance company to provide dual benefits to their customers (Insurance and Investment). It gives tax benefit under section 80 (c) where you can exempt tax up to Rs.1,50,000. but the return is slightly less in ULIP’s as compared to Mutual funds.

A mutual fund is suitable if you looking for short-term or medium-term Investment and if you already have life coverage but If you want long-term safe Investment and life coverage then you should definitely choose a ULIP plan.

LIC’s SIIP plan (852)

LIC’s Unit linked plan is different from mutual funds and many private insurance companies. There are many ups and downs for the product and through this blog, we will disclose all the things regarding ULIP’s and whether this product financially viable for you in the future or not?

Funds and Allocation

ULIP means directly related to the market and When you are investing, your funds will be allocated among Debt, Equity, and Hybrid. In SIIP, LIC offers you four types of funds where you can allocate your money and these are Bond funds, Secured Funds, Balanced Funds, and Growth Funds.

Starting from Bond Fund, If you don’t want to bear the high risk and play a safe side then you can go with this fund because in this 0-60% of your money are being invested in Government security Bonds and 0-40% in the short term money market, while there is no investment in Equity. So, here you will receive the lowest return on your money when comparing with other funds but there is also no or very less amount of risk.

Secured funds invest there 45-85% of the money in Government security bonds, 0-40% in the short-term money market, and 15-55% in Equity share. The risk associated with this fund is low medium and return is also higher as compared to Bond fund.

The third one is a Balanced fund and they invest 30-70% in Government security bonds, 0-40% in the short-term money market, and 30-70% in Equity share. The risk factor is medium because a good amount of money is being invested in equity share hence the chances of return are also higher.

Growth Fund, is the riskiest fund when compared to others because 20-60% amount is invested in Government Security Bond, 0-40% in short term money market and 40-80% in Share market. This is the only fund where you can expect the highest return because up to 80% of your money is allocated in Equity and the More you bear risk,  higher the chances of profit as well as losses.

The best part about this policy is that you can choose any % of a given amount to allocated in Government security bond, short term money market, and Equity and besides you can change your type of fund 4 times in a particular year which is totally free of cost.

You can also go through the table for better clarification.

Maximum and Minimums of Policy



Minimum age of Entry = 90 days

Maximum age of Entry = 65 years

Policy term

Minimum Policy term = 10 years

Maximum Policy term = 25 years


Minimum Maturity Age = !8 years

Maximum Maturity Age = 85 years

Sum Assured

Here your sum assured is 10X the amount of annualized premium and if you are 55 years or above age then it’s 7X the amount of annualized premium. The minimum sum assured is Rs.4,00,000 which you can pay Rs.4,000 monthly, Rs.12,000 quarterly, Rs.22,000 half-yearly, or Rs.40,000 yearly. You can choose any mode as per your preference but you can save 8000 rupees if you pay yearly.

No limit on the maximum sum assured.

TAX and Other Benefits

SIIP provides you Tax rebate of up to Rs,1,50,000 on premium paid under section 80(d) of Income-tax.

You will also get tax benefit on death claim or maturity amount under section 10(10)d which means you will get your whole amount without paying any tax and this feature or benefit is not available in any other private insurance company.

Maturity benefit

On the Maturity, the insured will get the total of the fund value and a refund of total mortality charges. The fund value is sum assured + rate of interest. Since some amount of your premium goes into life coverage in the ULIP plan that’s why if the insured will survive before the maturity then he or she will get a refund of total mortality charges.

Partial Withdrawal

Unlike an Endowment policy, you don’t get any kind of loan facility but there is an option of partial withdrawal. In this, you will get some amount from your fund value but this feature is allowed only after 5 years of the Date of commencement after all premium paid. partial withdrawal may be in the form of a fixed amount or fixed number of units. After 2 years from the date of commencement, the basic sum assured or paid-up sum assured shall be reduced to that extent.

You can withdraw % of the amount from your fund value to some extent after specified years.


Guaranteed Bonus

So, here one additional benefit is also given which is a Guaranteed bonus. You will get some % of annualized premium added to your unit fund on completion of a specific duration. This directly related to time so the higher the policy term higher will be the guaranteed amount. This feature is offered by LIC and it is not available in SIP’s or mutual funds.



ULIP plan

let’s understand this policy with an example.


Person A is 25 years old and he bought SIIP ULIP plan for 25 years of the term.

He pays 5000 rupees monthly premium and Fund type = Growth Fund

10% annual rate of return.

When he turns 50, the policy gets maturity and he will get fund value + refund of mortality charges which is…

 Rs. 59,00,824 (only Rs. 15,00,000 is the basic amount)

That’s the power of compounding interest.

In case of death

Let us assume that person died in between the policy term and he ran policy only for 10 years. So in this case he will get higher of the following:-

  • Basic sum assured (50,000 X 10)=5,00,000
  • 105% of Total basic premium paid= 6,30,000
  • Fund value (within that period)= 9,56,245

The family of Person A will get Rs.9,56,245 because it is higher among all the amounts.

Some Important Points

  • Unlike mutual funds, there is no admin charge in SIIP.
  • LIC linked accidental benefit rider is also available
  • Accidental Rider can be canceled in the future if taken.
  • If anything happens to the insured then death benefit can be also given to Nominee in Installments.
  • Partial benefits after 5 years
  • Funds can be allocated 4 times a year without any charges.
  • No backdating is allowed in this policy
  • The policy can be surrender only after 5 years.

Who should buy?

If you are looking for long-term investment and have no knowledge about shares and mutual funds, then you can totally go with this plan. LIC is a government company and the biggest life insurance company in India with a total valuation of Rs.32,00,000 crores (approximately), so you can trust and rely upon the company for your hard-earned money.

And If you want further information and planning to invest in this or any other LIC policy then you can email us at or you can simply fill out the form below. We will reach out to you and provide you further assistance.








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