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Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
Look around and you will find something smart about everything. Smartphones, Smart Homes, Smart Cards; the list is endless. To keep up with these changing times, PGIM India Mutual Fund has converted the ubiquitous Systematic Investment Plan (SIP) into Smart SIP. Essentially, Smart SIP merges two very basic tenets of financial planning – investment and contingency plan. Smart SIP does just that by adding the benefit of life insurance cover with the regular SIP.
In Smart SIP, the life insurance cover comes for free, as you don’t need to pay for it. The life insurance cover ranges from 20 to 120 times of the monthly SIP instalment, subject to maximum cover of ` 50 lakhs per investor, across all schemes/plans and folios*. Unlike an insurance policy, where one needs to make a declaration of good health at the time of taking the policy, there is no such mandate in case of Smart SIP.
As per the policy terms and conditions; your nominee would get the maximum sum assured subject to a limit of ₹50 lakh, taking away the worries of what may happen to your financial goals, if something untoward were to happen to you. The financial cushion provided by Smart SIP takes care of the financial future of your family members for whom you have planned the investment.
The minimum SIP amount to avail SMART SIP is ₹ 1000/- and in multiples of ₹ 1/- thereafter and the SIP should be for a minimum of three years. At present, Smart SIP facility can be availed in three schemes viz PGIM India Equity Savings Fund, PGIM India Hybrid Equity Fund and PGIM India Balanced Advantage Fund.
Sum Assured 20 Times Monthly SIP Instalment
Sum Assured 75 Times Monthly SIP Instalment
Sum Assured 120 Times Monthly SIP Instalment
The structure of SIP is based on a simple and straightforward idea, wherein you invest a fixed sum regularly in a mutual fund regardless of market conditions. So, over the long-term, you end up buying more units when the markets are down and fewer when the markets are up. In this manner, your average price of investing is predictably lower over the long run. When you invest through a SIP, you also leverage the power of compounding and the benefits of rupee cost averaging. Moreover, by investing regularly, you get to check on your emotions and not attempt market timing.
The structure of a SIP is also suitable to achieve your financial goals. Most often financial goals are some years ahead and of a sizeable sum. For instance, the task to accumulate `50 lakh 15 years from now may seem daunting. But, if one were to assume 10% annual return on investment and 5% inflation; one has to set aside about `25,000 each month to reach this goal. Effectively, the further the goal is in future; the lesser the sum you need to set aside each month to invest via SIPs.
SIPs do not make investments risk-free. As investments in equities are volatile, SIPs use volatility to your advantage as they give you the benefit of rupee cost averaging. In a falling market, the returns from your mutual fund investments are bound to go down. Likewise, SIPs don’t guarantee returns over the long term because returns are determined by the performance of the underlying fund in which you invest.
Given the multiple financial goals that one typically has, it is convenient to have different SIPs to match each goal. You could choose from the different type of mutual fund schemes that exist based on your risk profile to invest in them towards each goal. By breaking each goal into small monthly investments, not only do SIPs make it easy to invest, it also allows you to track the journey of your investment towards each goal. The flexibility with SIPs allows you to increase your monthly investments over time if you are altering your goal sum. You could also modify your investments towards each goal if needed to comply with the changing investment climate.
Years to goal : 2
Amount (`) : 1 Lakh
Monthly investment (`) (SIP) : 3,781
Years to goal : 3
Amount (`) : 1.5 Lakh
Monthly investment (`) (SIP) : 11,966
Years to goal : 7
Amount (`) : 15 Lakhs
Monthly investment (`) (SIP) : 12,402
Years to goal : 15
Amount (`) : 50 Lakhs
Monthly investment (`) (SIP) : 12,064
Years to goal : 35
Amount (`) : 2 Crore
Monthly investment (`) (SIP) :5,268
Smart SIP provides life insurance cover to investors at no extra cost (i.e. free of cost). In the unfortunate event of the demise of an investor (Primary Holder) during the tenure of the SIP, the nominee would get the maximum assured amount subject to a limit of Rs.50 lakhs. The idea behind offering this facility is to ensure that critical long-term objectives that investors make SIPs for, should still be fulfilled even in the unfortunate event of the death of the investor.
Only the First/Sole holder will be covered under the insurance provided by Smart SIP. No insurance will be provided to second/third holder
No, the cost of the insurance cover will be completely borne by Asset Management Company (AMC)
No, in such cases AMC reserves the right to process the Smart SIP application basis the KYC data, however where these details are not available from KYC as well, then the application will be registered for normal SIP without insurance and AMC will accordingly inform the investor.
No, in such cases AMC reserves the right to process the Smart SIP application basis the KYC data, however where these details are not available from KYC as well, then the application will be registered for normal SIP without insurance and AMC will accordingly inform the investor
Investor with monthly frequency are eligible for Smart SIP.
If, SIP discontinues before 3 years then Insurance cover will stop immediately.
Insurance Cover will discontinue if the investor defaults 3 consecutive SIP in first 3 years of Smart SIP.
The insurance cover shall cease upon occurrence of ANY of the following:
Existing investors who are eligible for Insurance cover automatically will avail the smart SIP facility. The existing folio will be tagged under Smart SIP
To avail the insurance facility the eligibility criteria for existing and new investor is the same. If your previous application with the fund house does not have any or all the details you can update your missing details in the folio and then you will be eligible to avail this facility. Residual Tenure should be greater than or equal to 3years.
The current list of eligible schemes is: PGIM India Equity Savings Fund PGIM India Hybrid Equity Fund PGIM India Balanced Advantage Fund
Top-Up feature is currently NOT available in Smart SIP
Yes, the facility is available in demat mode
Yes, Smart SIP benefits will be given to all the schemes registered under PGIM India with a max. cover of 50 Lakhs per investor.
Yes, nominee details are compulsory if you want to avail the Smart SIP facility, and no. of nominees will be as per mutual fund scheme application form.
Yes, there can be different nomination for all the schemes registered under PGIM India
Investor can have multiple nominees under one scheme registered under PGIM India. The claim proceeds will be divided equally amongst all the nominees. If the customer has made a specific allocation, then that would be taken into consideration.
Total Aggregate Sum Assured for a member can’t exceed 50 lakhs in any year
Insurance cover will stop on transfers out/switch-out/ full or partial redemption.
Insurance cover will commence on the date of receipt of first installment.
The death benefit is not payable if the insured member dies due to suicide, whether sane or insane within one year from the date of joining the scheme or policy commencement date, whichever is later.
The load structure prevalent at the time of enrollment of SIP shall govern the investors during the tenure of the Smart SIP structure shall be as mentioned in the SID of respective schemes.
I. NRI to RI II. Nominee, Gender and Date of Birth detail update The insurance cover will start from the day when the details are updated i.e. insurance cover day 1 will be day after the next SIP instalment is credited with updated details of that folio
The investor will receive an initial confirmation from AMC on acceptance of Smart SIP registrations and will receive an Insurance Policy directly from the Insurance Company subsequently by email/SMS link. The whole process of insurance registration will take a minimum of 45 days for completion.
The investor will receive an Insurance Policy directly from the insurance company on yearly renewals via SMS/email link with revised sum assured
Account statement will have “Smart SIP” mentioned on it post completion of insurance by the Insurance Provider (60days)
No, cover under existing Smart SIP will continue as per existing contract. It can be enhanced by registering a new SIP (rest of the conditions applied)
The insurance will discontinue, and the investor will have to re-register a new SIP to avail the benefit of Smart SIP.
No, Insurance will continue.
Investor can submit the change in nomination request/nomination form for the folio to the AMC. While claiming the Insurance company will confirm the nomination status with AMC before processing the claim.
No, currently not, however AMC reserves the right to provide Smart SIP with any other add -on PGIM India facility.
In case of death of the applicant, his/her legal representatives/Nominee will have to file a claim directly with the Insurance Company supported by all relevant documents as required by the Insurer and the payment of the claim will be made to the legal representatives by the insurance company
Currently, there is no such time limit within which claimant must report the death of the investor. The Insurance Company would settle the claim provided the investor was covered under the policy as on date of death.
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