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  • HDFC Life Assured Pension Plan

    Life Insurance
    • Premiums as low as Rs.17/day for sum assured of Rs.1 crore*
    • Claim up to Rs. 1,50,000 deduction under section 80C**
    • Choose between annual and monthly premium payment options

    HDFC Life Assured Pension Plan - ULIP is a unit linked plan offered by HDFC Life that provides you returns linked to the market, along with loyalty additions. The plan is optimum for helping you realise your retirement goals, provided you plan well in advance. HDFC Life APP offers you the advantages of equity participation with a capital guarantee. The loyalty additions available as part of the plan are in the form of Pension Multipliers that are offered every alternate year, starting from the 11th year. The plan provides you the option to start as early as 18 years of age. Single pay and limited pay options are available for premium payment.

    Eligibility - Who is the HDFC Life Assured Pension Plan for?

    To be eligible for the HDFC Life Assured Pension Plan - ULIP, you will have to satisfy certain criteria. These factors are associated with the policyholder’s age at the time of entry into the plan and the number of years he/she wishes to get insurance for. The eligibility details of the plan are as per the following table:

    Minimum Entry Age 18 years
    Maximum Entry Age 65 years
    Minimum Vesting Age 45 years
    Maximum Vesting Age 75 years

    All ages mentioned above are with respect to the last birthday of the life insured.

    Based on the number of years remaining for your retirement, you can choose from a wide range of policy terms and premium paying terms, as shown below:

    Premium payment term (years) Policy term (years)
    Single pay 10, 15 to 35
    8 pay 10, 15 to 35
    10 pay 10, 15 to 35
    15 pay 15 to 35

    Sum Assured and Premium Range - What you Get and What it Costs?

    Sum Assured:

    The policy offers multiple benefits in the form of Pension Multiplier, Vesting Benefit, Death Benefit, etc. that are explained in the coverage section below.

    Premium:

    There is no limit on the maximum premium that you choose to pay. The minimum premiums are however, dependent on your choice of premium payment option and frequency.

    Premium Payment Frequency Regular and Limited Pay Options Single Pay Options
    Minimum Premium Annually 24,000 NA
    Semi annually 12,000 NA
    Quarterly 6,000 NA
    Monthly 2,000 NA
    Single Pay NA 50,000
    Maximum Premium No Limit

     

    • The premium for the insurance coverage can be paid at frequencies agreed upon with the insurer and predefined in the policy document.
    • For monthly frequency, prevailing operational rules may mandate that the premium for the first three months is paid in advance.
    • Increase or decrease in the premium, policy term, and premium payment term are not allowed under the plan. However, it is possible to alter the premium frequency, if needed.

    Plan Coverage - What the HDFC Life Assured Pension Plan Covers?

    With the rise in cost of living, inflation, and increased life expectancy, it is imperative to ensure that you have adequate investment for your retirement period. The insurance coverage provided by the HDFC Life Assured Pension Plan - ULIP ensures that you have sufficient funds gathered during your working years to take care of your expenses on retirement. The benefits offered by the plan are detailed below:

    • Pension Multiplier - If you have paid all due premiums, you will receive loyalty additions to the fund value in the form of Pension Multipliers. These will be offered every alternate year starting from the close of the 11th policy year. These additions are equal to 1% of the average fund value for the immediate two years preceding the offering.
    • Vesting Benefit - At the end of the policy term, your policy is will vest/mature. The maturity benefit that you will receive is the higher of the following amounts:
      • Fund Value
      • Assured Vesting Benefit, where,

    Assured Vesting Benefit = [101% + 1% * (Policy term minus Premium paying term)] of the total paid premiums. The way in which the maturity benefit is payable to you is mandated by regulation, as detailed in the ‘Utilization of Policy Proceeds’ section below.

    The table below shows you the Assured Vesting Benefits as a percentage of the total premiums borne by the policyholder:

    Policy term (years) Assured Vesting Benefit
    Single pay option 8 pay option 10 pay option 15 pay option
    10 110% 103% 101% NA
    15 115% 108% 106% 101%
    16 116% 109% 107% 102%
    17 117% 110% 108% 103%
    18 118% 111% 109% 104%
    19 119% 112% 110% 105%
    20 120% 113% 111% 106%
    21 121% 114% 112% 107%
    22 122% 115% 113% 108%
    23 123% 116% 114% 109%
    24 124% 117% 115% 110%
    25 125% 118% 116% 111%
    26 126% 119% 117% 112%
    27 127% 120% 118% 113%
    28 128% 121% 119% 114%
    29 129% 122% 120% 115%
    30 130% 123% 121% 116%
    31 131% 124% 122% 117%
    32 132% 125% 123% 118%
    33 133% 126% 124% 119%
    34 134% 127% 125% 120%
    35 135% 128% 126% 121%

    The Assured Vesting Benefit will be paid to all in-force and paid up policies that reach maturity.

    • Deferment of maturity date - You can intimate the insurer about the deferment of your retirement date, any time before the annuitisation.
      • You are allowed to postpone the vesting date of the policy as many times as required, provided that the maximum vesting age is 75 years and you are below 55 years of age.
      • When you postpone the vesting date, the Death Benefit and Assured Vesting Benefit will continue as is.
      • The funds will be moved to the Pension Conservative Fund, and all charges will continue to be deducted.
      • Deferment of the vesting date will have no impact on the pension multipliers, and these will be added to the fund value as before.
    • Death Benefit - In case the policyholder faces death before the policy term ends, his/her nominees will receive an amount that is the highest among the following:
      • Fund Value
      • 105% of the total paid premiums

    The nominee can take this amount as annuity or he/she can withdraw the proceeds. Once the benefit is paid, the policy will terminate and no further benefits are payable.

    • Utilization of policy proceeds - According to the prevalent regulations, the vesting benefit can be taken in the following ways:
      • You can take up to ? of the cash as a lump sum, as per the current tax regulations. The lump sum amount will be tax-free. The remaining amount is converted to an annuity at the rates prevailing at that time. The annuity will have to be bought from the insurer.
      • You can utilise all the proceeds to purchase annuity from the insurer at the rates prevalent at that time.
      • You can also choose to utilise the entire proceeds for the purchase of a single premium deferred pension plan from HDFC Life.
      • You can extend the accumulation period for the same policy, if you are below 55 years of age when the policy matures.

    Add-On Plans – Additional Coverage under the HDFC Life Assured Pension Plan:

    This is not applicable for the plan.

    Exclusions - What the HDFC Life Assured Pension Plan - ULIP doesn’t Cover?

    There are no exclusions under this plan.

    Other Key Features – Freelook Period, Surrender Values, Grace Period etc.

    Grace Period - This is the time after the premium payment due date during which the policy will be in-force with risk cover. The HDFC Life Assured Pension Plan - ULIP has a grace period of 30 days for annual, semi-annual, and quarterly frequencies for premium payment. The grace period for a policy with monthly frequency is 15 days from the premium due date.

    The policyholder will reap maximum benefits from the plan only if he/she continues to be insured for the entire policy term. However, due to unforeseen circumstances he/she may not be able to continue paying the premiums. In such a scenario, he/she can choose one of the following options:

    • Discontinuance
      • When you choose to discontinue before the completion of 5 years from the start of the policy (applicable for policies that are not of the single premium paying type)

    In case you have not paid your premium by the end of the grace period, you can:

    • Revive the policy within 2 years from the date of discontinuance, or,
    • Completely withdraw from the policy.

    If you do not exercise any of the above options, the policy will be discontinued. It should be noted that until the policy is discontinued, the risk cover will remain as is, and the charges for the policy will be deducted as usual.

    On the day the policy is discontinued, the risk cover ceases. The funds at that point less the discontinuance charges are moved to the Discontinued Policy Fund. Fund Management Charges, i.e., 0.50% per annum are levied on the amounts in this fund. If the discontinued policy is not revived, the amount will be paid to the policyholder at the completion of a lock-in period of 5 years.

    In certain cases, the lock-in period is shorter than the revival period. So, when the revival period is not completed, the policyholder can choose to:

    • Revive the policy within the revival period, or,
    • Withdraw from the policy and receive the funds when the lock-in period ends (this is the default option for payout when the policyholder does not take any action), or,
    • Withdraw from the policy and receive the funds when the revival period ends

    Once the payout is made, the policy terminates with no further benefits.

    If the policyholder faces death before this payout, the amount in the Discontinued Policy Fund will be paid to his/her nominee. After this, the policy will terminate with no further benefits.

    • When you choose to discontinue after the completion of 5 years from the start of the policy (applicable for policies that are not of the single premium paying type)

    In this scenario, you have the following options:

    • Revive the policy within 2 years from the date of discontinuance. During the revival period the risk cover will be intact and charges will continue to be deducted.
    • Withdraw from the policy. This is the default option when the policyholder does not take any action. When the policy is withdrawn, the funds are paid out to him/her.
    • Convert the policy into a paid-up policy. Charges will continue to be deducted in a paid-up policy.
    • Surrender
      • When you surrender before the completion of 5 years

    Your fund value less the discontinued charges will be shifted to the Discontinued Policy Fund, and this fund value will be paid out when the lock-in period ends. If the policyholder dies before the surrender benefit is paid, the amount in the Discontinued Policy Fund will be paid to his/her nominee.

    When the surrender benefit is paid, the policy terminates with no further benefits.

    • When you surrender after 5 years from the start of the policy

    In this scenario, your fund value is paid out and the policy terminates with no further benefits. The utilization of proceeds for discontinuance or surrender follows the same guidelines as that for the vesting benefit, mentioned above.

    • Revival of Discontinued Policies

    You can revive your discontinued policy within 2 years from the date of discontinuance by paying all due and unpaid premiums. The decision is also subject to underwriting policies.

    • When you discontinued before the completion of 5 years

    In this scenario, at the time of revival:

    • You will have to pay all due premiums without any interests charged.
    • The discontinuance charges that were deducted at the time of discontinuance will be reversed.
    • The premium allocation charge and policy administration charge for the discontinuance period will be charged.
      • When you discontinued after 5 years from the start of the policy

    In this scenario, at the time of revival, you will have to pay all due premiums without any interests charged.

    Tax Benefits – How you can save with the HDFC Life Assured Pension Plan?

    The HDFC Life Assured Pension Plan - ULIP offers tax benefits under Section 80CCC of the Income Tax Act, 1961. Up to 1/3rd of the tax benefit can be taken as a tax-free value as per Section 10(10A). The remaining amount can be utilised for the purchase of a life annuity from the insurer. It is advisable to re-confirm these tax benefits with your tax consultant, as these are subject to change.

    Other Benefits – How you can save with the HDFC Life Assured Pension Plan?

    HDFC Life is a leading provider of insurance solutions in the country, with a claim settlement ratio of 99.41%. The insurer also maintains a quick turnaround time for the settlement of claims. Additionally, the insurance company provides support for all claim-related queries through an efficient claims assistance cell.

    Why you should Buy the Assured Pension Plan from HDFC Life?

    HDFC Life is a front-runner in providing insurance solutions with a wide reach across the country. With 398 offices and above 9,000 touch-points, the accessibility of their products and services in noteworthy. The insurance company also has a strong framework that offers financial consultancy effectively across India and abroad.

    HDFC Life Assured Pension Plan FAQs:

    Q. I am already in possession of a saving and investment plan from HDFC Life. So, do I need to purchase a separate pension plan as well?

    A. The objective of a pension plan is different from an investment plan. Pension plans provide you an income in the form of a pension after you enter into retirement and have no other source of income. This facility is not available under any other plan. Additionally, pension plans cannot be liquidated easily, ensuring that your savings are intact and there is a fund built for your retirement years.

    Q. I am only 30 years old. Do I need to plan for my retirement now?

    A. This is, in fact, the best time to plan for your retirement, so that it happens in a smooth way. You should remember that the earlier you start planning for your retirement, the bigger would be your retirement savings. If you start early, the power of compounding enables you to build a large retirement sum with a relatively small investment.

    Q. I have multiple sources of income. So, is it necessary for me to purchase a retirement plan?

    A. It is good to have diverse incomes; however, when you are older, you may not be able to work like you do today. Likewise, the other sources of income may not seem to be as successful as they are now. The best way in which you can ensure that you have a good retirement kitty is by investing in a pension plan today.

    Q. I have my employer’s provision for pension. Do I need to buy a separate pension plan?

    A. The increase in life expectancy and cost of living may result in your employer-funded pension not being sufficient to pay for all your expenses post retirement. The thumb rule is that your retirement fund should be at least 20 times the value of your income in the year just before retirement. So, it is wise to invest in a pension plan today, to supplement your employer-funded pension plan.

    Q. How will the insurer utilise my payments?

    A. Your funds will be invested into debt and equity instruments, according to the Equity Backing Ratio defined by the company. This will ensure that you receive maximum returns from the upside of the market; this also protects you from capital downfall.

    Q. Can I avail a loan or partial withdrawal from this scheme?

    A. No, loans and partial withdrawals are not possible with this plan.

    Q. What are the charges for the plan?

    A. Various charges for the plan are detailed below:

    Premium Allocation Charge - This is a charge based on the premium. After this charge is deducted from the premium, the remaining amount is invested for purchasing units. The remaining percentage of your premium invested this way is called the Premium Allocation Rate. This charge is guaranteed for the policy term as well.

    For the Regular and Limited Pay Option, the charges are as follows:

    No. of years Premium Allocation Charge as % of the premium
    Annual Mode Non-Annual Modes
    Year 1 - 5 5% 3.90%
    Year 6 onwards 4% 3.90%

    For Single Premium Pay Option, the charges are:

    Premium Band Range of premium Premium Allocation Charge as % of single premium
    Band 1 Up to Rs.9,99,999 2.50%
    Band 2 Between Rs.10,00,000 and Rs.24,99,999 1.50%
    Band 3 Rs.25,00,000 and above 1.00%

    Fund Management Charge - This charge is 1.35% per annum of the fund value. This charge is levied daily and is a percentage of the unit funds. For Discontinued Policy Fund, this charge will be 0.50% per annum. These charges are guaranteed for the entire term of the policy.

    Policy Administration Charge - This charge will be levied by cancelling units from the fund. It is deducted on a monthly basis, and the maximum amount that is charged per month is Rs.500.

    Year For Regular and Limited Pay Options, charges as % of annualized premium For Single Pay Option, charges as % of single premium
    1 to 5 0.18% per month 0.09% per month
    6 onwards 0.50% per month

    Mortality Charge - Mortality charge for this scheme is nil, and is guaranteed for the policy term.

    Investment Guarantee Charge - This charge is levied daily, and is a percentage of the unit funds. This amount is charged only when the policy is in-force and not on the Discounted Policy Fund.

    Fund Investment Guarantee Charge
    Pension Equity Plus Fund SFIN - ULIF06001/04/14PenEqPlsFd101 0.50% p.a.
    Pension Income Fund SFIN - ULIF06101/04/14PenIncFund101 0.50% p.a.
    Pension Conservative Fund SFIN - ULIF06201/04/14PenConsvFd101 0.10% p.a.

    Statutory Charge - Education Cess and Statutory Service Tax would be charged separately.

    Discontinuance Charge - This charge depends on when the policy was discontinued, and the annualised premium of the policy. There will be no charges applicable from the 5th policy year.

    The discontinuance charges for policies with Single Pay Option are as follows. This charge is deducted by the cancellation of units.

    Policy year during which the policy is discontinued Discontinuance Charges for policies having single premium above Rs.25,000
    1 Lower of 1% of (Single premium or Fund value), subject to a maximum value of Rs.6,000
    2 Lower of 0.5% of (Single premium or Fund value) subject to a maximum value of Rs.5,000
    3 Lower of 0.25% of (Single premium or Fund value) subject to a maximum value of Rs.4,000
    4 Lower of 0.1% of (Single premium or Fund value) subject to a maximum value of Rs.2,000
    5 and more NIL

    The discontinuance charges for policies with Regular and Limited Pay Option are as follows:

    Policy year during which the policy is discontinued Discontinuance Charges for policies having annualised premium up to and including Rs.25,000 Discontinuance Charges for policies having annualised premium above Rs.25,000
    1 Lower of 20% of (Annual premium or Fund value) subject to a maximum of Rs.3,000 Lower of 6% of (Annual premium or Fund value) subject to a maximum of Rs.6,000
    2 Lower of 15% of (Annual premium or Fund value) subject to a maximum of Rs.2,000 Lower of 4% of (Annual premium or Fund value) subject to a maximum of Rs.5,000
    3 Lower of 10% of (Annual premium or Fund value) subject to a maximum of Rs.1,500 Lower of 3% of (Annual premium or Fund value) subject to a maximum of Rs.4,000
    4 Lower of 5% of (Annual premium or Fund value) subject to a maximum of Rs.1,000 Lower of 2% of (Annual premium or Fund value) subject to a maximum of Rs.2,000
    5 and more NIL NIL

    Miscellaneous Charge - If the policyholder initiates a policy alteration request, he/she will be charged Rs.250 for each request. This charge is levied through the cancellation of units.

    Q. If the claim is rejected, how will I be informed?

    A. The insurer will send you a detailed rejection letter within 10 days of the decision. The letter will contain the reason for rejection as well.

    Q. What is the maximum time the insurer takes for processing the claim?

    A. When HDFC Life receives all relevant information from the claimant, they will pay the claim amount within 30 days. If the insurer requires an investigation before claim processing, then it will be initiated at the earliest. The claim payout will be done only after the investigation is complete.

    Q. Can I buy multiple policies from HDFC Life?

    A. Yes, it is possible to purchase more than one insurance policy from HDFC Life. The acceptance of the new policy will however, depend upon the underwriting approval.