Should one invest in a fund with SIP insurance feature?

Should I invest in ICICI Prudential Focused Bluechip fund with SIP insurance feature? - Renu Tandon, Delhi

Ask yourself if you need insurance or investment before committing to such an option. As a fund, ICICI Prudential Focused Bluechip is a good choice to invest with a 3-5 year time frame.

And, if you are investing through the SIP mode, the free insurance cover could prove to be an added benefit. What you get through this plan is a group term insurance cover of 10 times the monthly SIP instalment during the first year, which means that Rs 5,000 per month SIP will get you insurance cover for Rs 50,000.

The cover goes up by 50 times in the second year and 100 times from the third year onwards subject to a maximum cover of Rs 20 lakh per investor across all folios and schemes. Remember, this should not be your primary life insurance cover and, at best, could supplement your existing insurance cover, because if you discontinue your SIP within three years from the start, you will lose your insurance coverage.

OLMdesk@outlookindia.com