# Reliance SIP Insure “A unique facility to Save, Grow & Insure”

## Presentation on theme: "Reliance SIP Insure “A unique facility to Save, Grow & Insure”"— Presentation transcript:

Reliance SIP Insure “A unique facility to Save, Grow & Insure”

What Rs 1000 p.m can get you…. A dinner for your family Watching movie with your spouse Buy clothes for your kids Make you a Millionaire* & also get you free life insurance on your SIP installments *please refer slide 3 for more details

What does it take to create wealth…
Investing Rs 1500 per 15% p.a for 15 yrs makes you a Millionaire Value /Yrs 3 5 10 15 5,00,000 11,000 6,000 1,800 750 10,00,000 22,000 11,200 3,600 1,500 25,00,000 55,000 28,000 9,000 3,700 50,00,000 1,10,000 56,000 18,000 7,400 100,00,000 2,20,000 1,15,000 36,000 14,800 The table shows the SIP amount required to be invested per month for achieving the target amount in the specified time period. The hypothetical rate of return on the investments is assumed at 15% p.a. This is just an illustration, explaining the power of compounding concept and should not be assumed as a promise, guarantee or forecast on minimum returns and safeguard of capital. SIP does not assure a profit or guarantee protection against loss in a declining market. The calculation shows the outcome of investing a specified amount at a certain assumed rate of interest per annum.

Everyone has one or more of the above reasons to invest for!
Most likely reasons to invest….. Child’s Education Child’s Marriage Housing Retirement Safety Everyone has one or more of the above reasons to invest for!

7 Successful habits of investing
Start early Don’t time the market Prudent Asset allocation Invest regularly Understand the risk reward ratio Have a set investment objective Invest for long term Would you like to guess the 8th habit that we got for you?

Value of Money over time
Inflation – A Devil, we need to beat it! 5% p.a

Where do people save their money?
The Survey consisted of two components: 1. Complete household listing (over one million households) from randomly selected 1815 wards covering 852 towns and 931 villages, and 2. 96,088 representative individual respondent interviews (urban sample 72,979 respondents and rural sample of 23,109 respondents) carried out in the same locations. Respondents were drawn mainly from earning members of the Indian workforce who derive cash incomes from salaries, wages, profits and earnings from self employment and business activities (approximately 321 million persons nationally). The 321 million figure is the base figure from which they have done about over a million households and 96,088 in depth interviews. Source: Invest India Incomes and Savings Survey 2007** Mutual Fund as an Asset Class has a very low penetration

Invest Systematically…..
Long Term Investing – Case Studies Invest Systematically….. Its not the timing but the time in the market which matters

Invest Long term… Money grows over a period of time…
Rs 1000 invested at 8%p.a every month for… … just like a rolling snowball gathers snow & grows. This is an hypothetical illustration to explain the concept of “Power of Compounding”. Past Performance may or may not be sustained in future.

It always pays to start early & save for retirement
A holds for 30 years B holds for 20 years A & B invest Rs every month, earning 8% p.a. on a monthly compounding basis A starts at the age of 25 yrs, while B starts investing at the age of 35 yrs Both of them invest for 5 yrs ( Rs. 1.2 lacs) and hold their investments till 60 yrs. of age A’s investment appreciated to over Rs.14,88,603 while B’s investment grew to only Rs. 6,89,511 Only an illustration to explain the power of compounding.

& Don’t Time the Market…
Scenarios Investor buys at Market Peaks Investor buys at Market Lows Investor buys at constant interval BSE Sensex 12.64% 18.99% 15.30% BSE 100 13.32% 20.33% 16.48% Reliance Growth Fund-Retail Plan- Growth Plan – Growth Option* (RGF) 33.01% 38.31% 34.75% Rs 10,000 invested every year for a period of 12 years in RGF from Jan 96 to June 08 Past Performance may or may not be sustained in future. *Returns as on 30th June 08

Past Performance of SIP in Reliance Growth Fund
SIP Installment /Yrs 3 5 10 Since Inception 1,000 43,410 135,304 944,707 1,811,655 40,056 98,734 340,658 488,893 3,000 130,230 405,914 2,834,120 5,434,964 120,169 296,202 1,021,974 1,466,680 5,000 217,051 676,524 4,723,534 9,058,273 200,282 493,670 1,703,289 2,444,467 10,000 434,102 1,353,048 9,447,067 18,116,545 400,565 987,340 3,406,579 4,888,933 15,000 651,153 2,029,572 14,170,601 27,174,818 600,847 1,481,010 5,109,868 7,333,400 RGF BSE 100 Inception Date: 8th Oct Returns are of Retail Plan- Growth Plan – Growth option as on 30th June 08 Past Performance may or may not be sustained in future. The above table shows the historical SIP performance of Reliance Growth Fund (Retail Plan – Growth Plan – Growth option) vis its benchmark BSE 100. For example; A person who had made an SIP of Rs 10,000 p.m in the above fund since inception on 8th Oct 1995 would have invested Rs lacs by 30th June 08 and have earned a total amount of Rs 1.81 crs (As per the highlighted cell)

1 2 The choice is yours to make……….. Make the right choice….
Simple, straightforward way to create long term wealth Understand and embrace risk Put time on your side Invest systematically Don’t worry about market timing A tried & tested method 1 2 The alternative is to : Follow markets very closely Time your entry and exit very well Select your stocks judiciously And hope that you get it right more often than not! The choice is yours to make………..

Systematic Investment Plan (SIP) & its benefits
SIP is a long term investment technique under which you invest a fixed sum of money on a monthly or quarterly basis in a mutual fund scheme at the prevailing NAV. This allows you to save and invest regularly while you are earning. Protects against market volatility Improves probability of better returns Helps averaging cost of investment Eliminates need for timing markets Inculcates savings habit

then Here comes the most sought after product…….. Choose
Do you want an investment technique which can make you invest regularly?? Are you looking at investing for the long term?? Choose Reliance SIP Insure then Do you want a free life insurance cover?? Do you want your planned investments to be completed after your unforeseen death??

“A unique facility to Save, Grow & Insure”

Investor Benefits- “Save, Grow & Insure”
Free Life Insurance Cover- Enjoy Insurance on SIPs Ensuring that the planned investments are completed Market Linked NAV based maturity proceeds Why Reliance SIP Insure ? Eliminates need for timing markets Helps averaging cost of investment Inculcates savings habit

Reliance SIP Insure- What is it?
An add-on feature of life insurance cover under a Group Term Insurance provided to individual investors with a view to encourage individual investors to save and invest regularly through Systematic Investment Plan (SIP) and help them achieve their financial objective without any extra cost. Objective: In the unfortunate event of the demise of an investor during the tenure of the SIP, the insurance cover will take care of the unpaid installments. Thus, the nominee* would be able to continue in the scheme without having to make any further contribution. Investor’s long term financial planning and objective of investing through SIP could still be fulfilled as per the targeted time horizon, even if he/she dies prematurely. *Nominee account would mean nominee in case of single holding & second or joint holder in case of Joint Holding

Reliance SIP Insure – Product Features
All individual investors enrolling for investments via SIP and opting for ‘Reliance SIP Insure’ Only individual investors whose completed age at entry is greater than 20 years and less than 46 years. In case of multiple holders in the any scheme, only the first unit holder will be eligible for the insurance cover. Eligibility Minimum Investment per installment : Rs.1000 per month. (Except for Reliance Tax Saver (ELSS) Fund where it is Rs 1000 p.m and in multiples of Rs 500 thereafter). There is no upper limit. Minimum Period of Contribution : 3 years and in multiples of 1 month thereafter. Maximum Period of Contribution : 15 years OR till attaining 55 years of age, whichever is earlier (e.g., a person can register an SIP of maximum 10 yrs at the age of 45 yrs.) The insurance cover ceases when the investor becomes 55 years of age. Mode of payment of SIP installments is only through Direct Debit & ECS ( Post Dated Cheques shall not be accepted ) Investment Details

Reliance SIP Insure – Product Features
Load Structure The Entry Load under Reliance SIP Insure shall be same as applicable to normal purchase /additional purchase transactions. However, there will an Exit Load of 2%, if the accumulated units acquired or allotted under Reliance SIP Insure are redeemed or switched out to another scheme before the maturity of SIP tenure as opted in the respective scheme either by the SIP-Insure unitholder or by the nominee, as the case may be. In the event of the death of the unitholder, if the Nominee chooses to redeem the outstanding balance of units before completing the opted SIP tenure the repurchase of units shall be subject an exit load of 2% However, if the units are redeemed on completing the opted SIP tenure, there will not be any exit load in the respective scheme.

installment depending upon the enrolled SIP tenure.
Reliance SIP Insure – Product Features Commencement of Insurance Cover: The Insurance cover shall commence after “waiting period” of 90 days from the commencement of SIP installments. However the waiting period will not be applicable in respect of accidental deaths. Amount of Life Insurance Cover Available The Life Insurance Cover under ‘SIP Insure’ facility will be revised as per the following clauses; In the event of death of unit holder within the 1st two years of the commencement of the insurance cover: An amount equivalent to the aggregate balance of unpaid SIP instalments, subject to a maximum of Rs.10 lakhs per investor across all schemes / plans and folios. In the event of death of the unit holder after completion of 2 years (i.e. w.e.f. commencement of 3rd year onwards): An amount equivalent to two times the targeted SIP contribution (committed at the time of registration) i.e. Number of SIP Instalments enrolled for X Amount of Instalment X 2, subject to a maximum of Rs.10 lakhs per investor across all schemes / plans and folios. Thus, the amount of free life insurance cover could go upto 360 times of the monthly SIP installment depending upon the enrolled SIP tenure.

Reliance SIP Insure – Product Features
The Life Insurance amount will be invested in the Nominee’s account, in the same scheme* under which the deceased investor has enrolled for SIP. The investment will be at the applicable price based on the closing NAV on the date on which the cheque for insurance claim settlement is received by the AMC from the insurance company, subject to completion of requisite procedure for transmission of units in favour of the nominee. * Not applicable for Reliance Tax Saver (ELSS) Fund. For Reliance Tax Saver (ELSS) Fund; Investors are requested to note that there will be a lock - in period of 3 years for each SIP Insure installment under ‘Reliance Tax Saver (ELSS) Fund’ as per the Government Notification of 2005 and in the event of demise of the unitholder, the nominee would be able to withdraw the investment amount only after the completion of one year from the date of allotment of the units or anytime thereafter without any exit load. The insurance amount as per the above clauses a) and b) (as per earlier slide) subject to a maximum of Rs. 10 lakhs in a lumpsum in cash will be paid to the nominee in case of death of the unitholder (unlike other schemes, wherein the insurance amount will be compulsorily invested in the respective scheme and the nominee is allotted the units.)

Reliance SIP Insure–How does this work?
An investor does a monthly SIP of Rs. 5,000 for 5 years in Reliance Growth Fund If he dies after a period of 3 yrs, then his Sum Assured= Number of SIP Instalments enrolled for X Amount of Instalment X 2 = 60 X 5,000 X 2 = Rs 3 lacs X 2 = Rs 6,00,000 This amount will be paid by life insurance company to SIP investor’s nominee account * with Reliance Mutual Fund and will be invested in Reliance Growth Fund (in the same scheme in which the deceased has earlier invested) *Nominee account would mean nominee in case of single holding & second or joint holder in case of Joint Holding

Life Insurance Cover/Yrs
Reliance SIP Insure – Product Features One can aim to have a target insurance cover from 3rd year onwards as per one’s requirement by referring to the matrix attached below Life Insurance Cover/Yrs 3 5 10 15 1,000,000 13,900 8,350 4,500 2,800 900,000 12,500 7,500 3,750 2,500 800,000 11,150 6,700 3,350 2,250 700,000 9,750 5,850 2,950 1,950 600,000 5,000 1,700 500,000 7,000 4,200 2,100 1,400 400,000 5,600 1,150 300,000 1,250 850 200,000 560 100,000 425 280 Cells in yellow would not be applicable under Minimum SIP amount category under Reliance SIP Insure Facility The table shows the SIP amount per month to be invested for the required combination of Eligible Insurance Cover & Tenure. For example, to have a maximum cover of Rs 10 lacs from third year onwards (from commencement of the insurance cover) in Reliance SIP Insure Facility, one can invest Rs 2800 p.m for a period of 15 yrs as per the cell highlighted in pink.

Reliance SIP Insure – Product Features
If the aggregate total of SIP installments remaining unpaid under all schemes is less than or equal to Rs. 10 Lakhs, then the life insurance cover shall be equal to the actual unpaid balance in the respective schemes. If the aggregate total of SIP installments remaining unpaid under all schemes is greater than Rs. 10 Lakhs & all the SIPs start on the same date, then the life insurance cover shall be equal to Rs. 10 Lakhs, which shall be allocated / invested proportionately in the respective scheme folios. If the aggregate total of SIP installments remaining unpaid under all schemes is greater than Rs. 10 Lakhs & all the SIPs start on the different dates, then the life insurance cover shall be equal to Rs. 10 Lakhs, which shall be allocated / invested on First in First out basis in the respective scheme folios.

Reliance SIP Insure – Product Features
Eligible schemes Reliance Growth Fund - Retail Plan Reliance Vision Fund - Retail Plan Reliance Equity Opportunities Fund - Retail Plan Reliance Equity Fund - Retail Plan Reliance Equity Advantage Fund- Retail Plan Reliance Regular Savings Fund – Equity option Reliance Regular Savings Fund – Balanced option Reliance Banking Fund- Retail Plan Reliance Pharma Fund Reliance Media & Entertainment Fund Reliance Diversified Power Sector Fund – Retail Plan Reliance Natural Resources Fund- Retail Plan Reliance Quant Plus Fund – Retail Plan Reliance Tax Saver (ELSS) Fund

Reliance SIP Insure – Expiry of the policy
The insurance cover shall cease upon occurrence of any of the following: At the end of mandated Reliance SIP Insure tenure, i.e., upon completion of payment of all the monthly installments as registered. Discontinuation SIP installments midway by the investor i.e., before completing the opted SIP tenure /installments. Redemption / switch-out of units purchased under Reliance SIP Insure before completion the mandated SIP tenure / installments In case of default in payment of two consecutive monthly SIP installments or four separate occasions of such defaults during the tenure of the SIP duration chosen.

Exclusions for Insurance cover
Reliance SIP Insure – Exclusions for Insurance cover No insurance cover shall be admissible in respect of death of the SIP-Insure unitholder (the insured person) on account of - Death due to suicide Death within 90 days from the commencement of SIP installments except for death due to accident. Death due to pre-existing illness, disease(s) or accident which has occurred prior to the start of cover.

Reliance SIP Insure – Documentation
It is mandatory for each investor to sign and submit the following documents under this facility; Application Form ECS/ Direct Debit Form Personal Statement of Health Authorization Mandate (which forms a part of application form) For our existing investors there is no need to give the first SIP cheque

Source: IIMS Data Works survey
Invest India Incomes and Savings Survey 2007 **The Survey consisted of two components: 1. Complete household listing (over one million households) from randomly selected 1815 wards covering 852 towns and 931 villages, and 2. 96,088 representative individual respondent interviews (urban sample 72,979 respondents and rural sample of 23,109 respondents) carried out in the same locations. Respondents were drawn mainly from earning members of the Indian workforce who derive cash incomes from salaries, wages, profits and earnings from self employment and business activities (approximately 321 million persons nationally). The 321 million figure is the base figure from which they have done about over a million households and 96,088 in depth interviews. Data Source for this presentation This presentation is drawn from the data of the Invest India Incomes and Savings Survey which was completed in June 2007. This is based on in-depth interviews with 1 lakh respondents aged yrs with cash incomes and supported by a household listing sample of 1 million. The figures projected refer to the 321 million paid work force of India in the presentation. Source: IIMS Data Works survey

Sponsor: Reliance Capital Limited Trustee: Reliance Capital Trustee Co