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Nippon Life India Asset Management and Birla Sun Life Mutual Fund have discontinued offering life insurance along with a systematic investment plan (SIP) in select schemes from Thursday.
However, the SIP registered with insurance cover prior to the effective date will continue to have the cover as prescribed earlier.
SEBI last week directed fund houses to scrap insurance cover bundled with investment in mutual fund (MF) schemes.
Incidentally, ICICI Prudential Mutual Fund had discontinued offering life insurance with SIP last year amid the second wave of Covid.
In line with SEBI’s guideline
Nippon MF has done away with life insurance cover in 18 of its schemes. In a letter, SEBI said the MF schemes would not have bundled products. Accordingly, the fund house proposes to discontinue Nippon India SIP Insure on a prospective basis, said Nippon MF on Wednesday.
The instalments falling due under Nippon India SIP Insure, registered prior to the effective date, will continue to be processed under the respective plans and options of the designated schemes according to the existing terms and conditions of Nippon India SIP Insure, it added.
Aditya Birla Sun Life MF said it will discontinue Aditya Birla Sun Life Century SIP Facility, and instalments falling due under CSIP registered prior to the effective date will continue to be processed under their respective plans and options.
Cover under CSIP works out to ₹26 lakh for investors who invest with MySIPonline, keeping a minimum SIP of ₹1,000. The tenure of ABSL Century SIP Plan will be at the maturity of the committed SIP Insure or before completion of 55 years of age, whichever is earlier.
Birla MF had launched Century SIP to help investors create wealth with as little as ₹1,000 per month plus a life insurance cover of up to 100 times the monthly installment.
The life insurance cover by Birla Sun Life Insurance comes at no extra cost to the investor. Under the insurance cover, the investor need not go through any medical test, but just sign a declaration of good health. In case of death of an investor, the insurance claim will be directly paid to the nominee by the insurance company. Interestingly, the SIP offers 100 times insurance cover.
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