All about bundle investment products

5 mins read
You must have come across bundled investment products. But before investing in them, read this article to learn about them, their advantages and disadvantages, and SEBI's regulations.

Whenever we enter the supermarket or a shopping mall, we suddenly get attracted to bundle offers such as ”Buy three products at ₹499” or ”Buy 1, get Free”. Don’t we? This strategy is used by companies to delight customers and expand their business. Similarly, investment companies have also started offering bundle products that promise better and safe returns. So before we learn about bundle investment products, let us know about product bundling. 

What is product bundling?

Offering a combination of goods or services as a single package for sale is known as product bundling. For example, if a company sells smartphones and earphones together at a reasonable price or software with related programs or features.

Now let’s understand bundle investment products. Bundle Investment Product refers to a set or combo of diversified financial products such as stocks, insurance, bonds, and more. Investment bundling is done to help clients save money, diversify their portfolios, and invest in new products at low risk. Moreover, managing and tracking investment returns are more manageable as the entire portfolio performance is in one place. For example, investing in insurance and mutual funds together yields good profits.

Types of product bundling 

• Pure Bundling

In pure Bundling, the individual products that comprise the bundle can only be purchased as a bundle, not as a standalone. This technique restricts the options available to the consumer. Example: Purchasing Unit linked Insurance Plan (both Insurance and Mutual Fund in a single integrated plan). 

• Mixed Bundling

Mixed Bundling is the method of selling products separately and in a bundle (usually priced below the sum of the individual product prices). Example: Mutual Fund houses offer bundled insurance and a Systematic Investment Plan (SIP) at a reasonable price.

Cross-sell Bundling

Cross-selling Bundling usually sells a complementary product, often with a higher-priced item. Example: Purchasing Health insurance along with two-wheeler insurance.

• Buy one, get one’ Bundling

In this type of Bundling, you can buy one product or service at the total price and get another product or service at a significant discount. Example: Purchasing four-wheeler insurance and getting a discount on two-wheeler insurance. 

• Occasional Bundling

Occasional product bundling works perfectly during holidays, special occasions, and seasonal needs. Example: Wedding insurance in case of postponement or cancellation of the event. 

Advantages of bundle investment products 

• Access all products in one space 

Bundle investment helps to integrate and consolidate all financial services and products, personalize and create a seamless user experience under one platform.

• Saves time

Bundling in financial services has the potential to save time and increase convenience for investors like you. 

• Engage the customers

It helps sellers spread costs across products and secure long-term customer value and loyalty.

• Relationship with customers

It helps to establish greater customer connections and deepen relationships by offering a single platform for all their needs while offering personalized experiences.

• Increased revenue for a business

Businesses can benefit from increased sales volume and save on promotion and distribution costs.  

Disadvantages of bundle investment products

Benefits majorly to funding houses 

To attract investors, fund houses bundle up various financial services, resulting in such schemes’ increased popularity, eventually benefiting mutual fund houses.

• Lower profits on individual items

If a product sells as a bundle, the business may earn lower profits than if sold as a standalone product.

• Impacts customer satisfaction

If the bundle has any product the clients want to avoid buying, customer satisfaction may suffer as they will feel that they are buying unnecessary products. 

What is SEBI’s decision regarding bundled mutual fund SIP?

As per SEBI’s guidelines, it has barred mutual funds houses from bundling mutual funds SIPs with insurance. In addition, they have asked AMCs not to issue new bundled products and withdraw all the existing bundled products with immediate effect. 

Why has SEBI taken this decision?

  • • Fund houses paid low to insurance companies:

    The asset management company paid the life insurance, which was usually combined at SIPs beginning with equity and hybrid plans, and it was typically very low given the high volume generated.

  • • Precondition of continued SIPs:

    The insurance coverage under these plans was approximately 100–120 times the SIP amount. However, access to the coverage was contingent on making further installment payments for a predetermined period. Therefore, even if the scheme was doing poorly or not providing high returns, investors who chose to purchase these bundled products were required to make mandatory SIP payments for a set period.

  • • Insufficient insurance cover:

    If an investor has no alternative insurance coverage, insurance through SIPs may not help underinsured investors.


Bundle investment products are those where various investment products are bundled together. This is an excellent strategy to lure and delight investors. However, it would help if you were cautious while investing in bundled products, as each product and service has various pros and cons. Therefore, kindly pay attention to minute details of individual products before investing.


  1. This blog is exclusively for educational purposes
  2. Investments in securities market are subject to market risks, read all the related documents carefully before investing