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Combining life insurance with SIP at no additional cost

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.


What Smart SIP offers?

Free Life Insurance Cover

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.

*For terms and conditions w.r.t Smart SIP, please refer to addendum on our website.

Secure Financial Future

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.

Flexible Investment Option

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.

Life Insurance with Smart SIP

First Year

Sum Assured
20 Times
Monthly SIP Instalment

Insurance Cover
`2 Lakhs

Second Year

Sum Assured
75 Times
Monthly SIP Instalment

Insurance Cover
`7.5 Lakhs

Third Year ONWARDS

Sum Assured
120 Times
Monthly SIP Instalment

Insurance Cover
`12 Lakhs
All illustrations based on monthly SIP of ₹10,000



SIPs are a simple tool for
long-term savings

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.


SIPs help you achieve
your financial goals

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 are not completely

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.


SIPs are flexible

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.


Set aside emergency funds

Years to goal : 2

Amount (`) : 1 Lakh

Monthly investment (`) (SIP) : 3,781

Buy a car

Years to goal : 3

Amount (`) : 1.5 Lakh

Monthly investment (`) (SIP) : 11,966

House down payment

Years to goal : 7

Amount (`) : 15 Lakhs

Monthly investment (`) (SIP) : 12,402

Education fund

Years to goal : 15

Amount (`) : 50 Lakhs

Monthly investment (`) (SIP) : 12,064

Retirement nest egg

Years to goal : 35

Amount (`) : 2 Crore

Monthly investment (`) (SIP) :5,268

Assuming 10% p.a. returns.
Illustrative example only.

Everything you need to know about Smart SIP


1. What is Smart SIP facility?

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.

2. How many people will be covered under insurance?

Only the First/Sole holder will be covered under the insurance provided by Smart SIP. No insurance will be provided to second/third holder

3. Will there be any cost applicable to investor for the insurance cover?

No, the cost of the insurance cover will be completely borne by Asset Management Company (AMC)

4. At the time of investment, will the investor need to furnish any additional documents to avail the life cover?

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.

  • Date of Birth
  • Gender
  • Nomination

5. Will the application be rejected if the date of birth is not written on the form?

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

6. How much investment is required to be made to avail the Smart SIP facility?

7. What is the SIP frequency for investors to avail Smart SIP?

Investor with monthly frequency are eligible for Smart SIP.

8. What would happen to insurance cover if the SIP is discontinued?

If, SIP discontinues before 3 years then Insurance cover will stop immediately.

9. What will happen if Investor miss a SIP Instalment?

Insurance Cover will discontinue if the investor defaults 3 consecutive SIP in first 3 years of Smart SIP.

10. Cessation of Insurance Cover: Any of the below reason

The insurance cover shall cease upon occurrence of ANY of the following:

  • Discontinuation of SIP instalments before completing 3 years (36 instalments) of the opted SIP tenure
  • Partial or Full Redemption / switch-out of units purchased under PGIM India Smart SIP till attaining 55 years of age
  • In case of default in payment of three consecutive monthly SIP instalments of such defaults in the first 3 years of Smart SIP
  • Off market transfer of units in demat form, will be considered as redemption in normal course, and Insurance cover will cease on such transfer
  • Transaction such as switch-out or STP