HDFC Life Pension Super Plus Plan

HDFC Life Pension Super Plus is a unit-linked pension plan that helps you in saving a significant amount for your post retirement expenses. The retirement corpus is built during the policy term and the benefits would be received as pension after retirement. The policy provides an additional premium allocation rate that comes up to 102% from the 11th year onwards. The policyholder also receives assured benefits when the policy matures. The vesting benefits include 101% of all premiums paid till date, and it is inclusive of top-up premiums as well. The scheme also offers the flexibility of planning the retirement date and selecting a convenient policy term.

Eligibility - Who is the HDFC Life Pension Super Plus for?

To purchase the HDFC Life Pension Super Plus plan, the customer has to satisfy certain eligibility criteria set by the insurer. These factors are related to the age of the customer and the number of years he/she would like to purchase insurance for. The eligibility conditions of the HDFC Life Pension Super Plus plan are as follows:

Minimum Entry Age	35 years
Maximum Entry Age	65 years
Minimum Vesting Age	55 years
Maximum Vesting Age	75 years

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

The policy can be purchased only on a single life basis with policy terms of 10, 15, or 20 years.

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

Sum Assured:

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

Premium:

The policy does not enforce any limits on the maximum premium chosen by you. But the minimum premium is dependent on the premium frequency chosen by you.

• You can also opt for a top-up premium with this policy. This premium will have a lock-in period of 5 years, except when the policy is completely surrendered.
• The top-up premium can be paid throughout the term of the policy.
• You can pay the top-up premium only if you have paid all the regular premiums that were due.

The regular and top-up premium limits are as shown below:

Limits	Regular Premium		Top-up Premium
Minimum	Annually	Rs.24,000 per year	Rs.10,000
	Semi-annually	Rs.12,000 per half year
	Quarterly	Rs.6,000 per quarter
	Monthly	Rs.2,000 per month
Maximum	No Limit		No Limit

The customer can choose to pay the premiums at frequencies suitable to him/her. This should however, be agreed with the insurer at the time of policy purchase. The policy does not allow the alteration of policy term, premium, and partial withdrawals. However, it is possible to change the premium paying frequency at any time during the policy term.

Plan Coverage - What the HDFC Life Pension Super Plus Covers?

 

HDFC Life Pension Super Plus helps you in accumulating a substantial fund that would offer you a steady post retirement income. Investing in such a policy ensures that you would have a comfortable life after your active ‘work period’.

The coverage under HDFC Life Pension Super Plus includes the following:

• Vesting Benefit – The HDFC Life Pension Super Plus policy vests at the end of the policy term. The Maturity or Vesting Benefit payable to the policyholder will be the highest amount between the following:
  • Fund Value
  • Assured Vesting Benefit that is 101% of all premiums plus top-up premiums paid till maturity

The way in which the maturity benefit is payable to the policyholder is mandated by regulation, and is explained in the ‘Utilization of Policy Proceeds’ section below.

• Death Benefit - In the unfortunate case of death of the policyholder before policy maturity, the nominee will receive the highest amount from the following:
  • Fund Value
  • Total premiums, i.e., regular premiums plus top-up premiums, paid till date accumulated at a rate of 6% per annum from the respective premium due dates till death.

It should be noted that the minimum death benefit would be at least 105% of the total premiums paid, i.e., regular and top-up premiums. The nominee can choose to take the death benefit as annuity from the insurance company or withdraw the proceeds.

• Utilisation of Policy Proceeds - Current regulations enable you to take the Vesting Benefit in any of the following ways:
  • Take ? rd of the amount as a cash lump sum that is tax-free. The remaining amount is converted to an annuity at the annuity rates prevalent at that time. According to regulations, the annuity will have to be purchased from the insurance company.
  • The entire proceeds can be used to buy a single premium deferred pension plan from the insurance company.

If you prefer to convert the vesting benefit to an annuity, it will have to be through the purchase of a new policy from HDFC Life at that time.

Add-On Plans – Additional Coverage under HDFC Life Pension Super Plus:

This is not applicable for the plan.

Exclusions - What the HDFC Life Pension Super Plus doesn’t Cover?

There are no exclusions under this plan.

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

• Free-look Period

If the policyholder is not satisfied with the terms and conditions in the policy documentation, he/she can choose to return the policy to the insurance company with relevant reasons, within 15 days from the receipt of the policy. The Free-look period for policies that were purchased through distance marketing is 30 days. Distance marketing policies are the ones that are sold through channels that do not include face-to-face interactions. Examples of such instances are telephonic and internet policy purchase.

• Discontinuance

This policy includes a grace period of 15 days for monthly premium payment modes and 30 days for non-monthly modes. If you have chosen an annual premium payment mode, you are expected to pay throughout the policy term.

When you decide to discontinue the policy before the completion of 5 years

If you have not paid your premium within the grace period, then the following options are available to you:

• You can revive the policy within 2 years from the discontinuance date.
• You can completely withdraw from the policy and cease the coverage.

Until the policy is discontinued, the risk cover will remain in-force and charges will be deducted as usual. When you discontinue the policy, the risk cover will cease to exist and the fund value less the Discontinuance Charges will be shifted to the Discontinued Policy Fund. This fund shall attract a minimum interest rate of 4% per annum.

If the discontinued policy is not revived, the proceeds will be paid out when the lock-in period of five years is completed. The way in which the proceeds can be withdrawn is specified in the ‘Policy Proceeds’ section below. In case the revival period exceeds the lock-in period, you can receive the proceeds on completion of the revival period or the lock-in period. If you do not exercise any option, then the payout will be made at the end of the lock-in period.

Once the payout is made, the policy terminates and the benefits will cease.

When you decide to discontinue the policy after the completion of 5 years

If your policy is discontinued after the lock-in period of 5 years, then the following options are available to you:

• You can choose to revive the policy within 2 years from the date on which it was discontinued.
• You can withdraw from the insurance policy and the risk cover will cease.
• The policy can be converted to a paid-up one, where,

Paid-up Sum Assured = Original Sum Assured * (Total number of premiums paid / Original number of premiums payable as per terms and conditions)

A paid-up policy will continue as is, and charges will be deducted as before. If you do not exercise any of the options above, the policy will be withdrawn and the policyholder will receive the proceeds. After payment, the policy terminates with no further benefits.

• Revival of Policies that are discontinued The policyholder can choose to revive the policy within 2 years from the date of discontinuance. When he/she applies for a revival:
  • He/she would have to pay all due premiums without any interests
  • The discontinuance charges that were deducted would be reversed and the proceeds will be reallocated in the segregated funds that he/she has selected.
  • Charges for premium allocation and policy administration will be levied as usual during the discontinuance period.
• Surrender

The surrender benefit is the fund value at the time of surrender.

• When you surrender before the completion of 5 years

Your fund value less the discontinuance charges will go into the Discontinued Policy Fund. The amount in this fund with the accrued interest will be paid-out when the lock-in period is completed. This process is detailed in the ‘Policy Proceeds’ section below.

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

In this case, your fund value will be paid out as mentioned in the ‘Policy Proceeds’ section. If the policyholder faces death before the surrender benefit is paid, the amount in the Discontinued Policy Fund is paid to the nominee. Following this, the policy terminates without any further benefits.

• Policy Proceeds

You can choose to avail the Maturity Benefit and Surrender Benefit in the following manner:

• Take 1/3rd of the benefit as a cash lump sum that is free of tax. The rest of the amount will be converted to an annuity that will have to be bought from the insurance company, as per prevailing guidelines.
• You can use all the proceeds to buy a single premium deferred pension plan from the insurer.

If you would like to convert the maturity benefit or surrender benefit to an annuity, you will have to purchase a new policy from HDFC Life.

Tax Benefits – How you can save with HDFC Life Pension Super Plus?

The premiums that you pay towards this policy will be eligible for tax benefits, according to Section 80CCC of the Income Tax Act, 1961.

• Up to 1/3rd of the tax benefit can be availed as a commuted value that is tax-free, as detailed under Section 10(10A) of the Income Tax Act, 1961. The remaining amount can be utilised for the purchase of a life annuity from HDFC Life.
• The tax benefits listed here are subject to changes based on the existing tax laws. So it is advisable to reconfirm the same with your tax consultant before investing in the policy.

Other Benefits – How you can save with HDFC Life Pension Super Plus?

HDFC Life is one of the prominent insurance providers in the country, offering a wide range of group and individual insurance schemes including Investment, Protection, Pension, and Health. They are known to settle claims with a quick turnaround time, and had a competent claim settlement ratio of 99.41% in FY 2013-14. The claims assistance cell of the insurer is also very efficient, providing consultancy to customers throughout their claim journey.

Why you should Buy Pension Super Plus from HDFC Life?

HDFC Life has a wide reach across the country, with 398 offices and 9,000 touch-points. Their exhaustive network of branches ensures that the insurance products offered by them are accessible to one and all. The company also has a competent financial consultancy team that provides financial solutions to customers in India and abroad.

HDFC Life Pension Super Plus FAQs:

Q. Will the vesting benefit be automatically converted to annuity?

A. No. In order to convert the vesting benefit to annuity, the policyholder will have to purchase an annuity plan from HDFC Life by completing a form for annuity proposal. He/she will also have to submit all relevant documents to the insurer. The annuity payout will occur as per the timeline set by HDFC Life.

Q. What are the benefits if I purchase this product as QROPS through the transfer of UK tax relieved assets?

A. The terms and conditions applicable to QROPS policyholders are as follows:

Surrender or Discontinuance Benefits - The access to policy benefits would be restricted till the insured attains 55 years of age or the locking period ends, whichever is later.

Cancellation in the Free-look period - The proceeds from the cancellation during the free-look period shall be transferred to the fund house from where it was initially received.

Q. If my employer provides me pension, do I need to buy a pension plan?

A. The basic rule is that you should look to accumulate a retirement fund that is equivalent to at least 20 times the value of your income in the year preceding retirement. You should factor the rise in living expenses, medical costs, and life expectancy when you arrive at a value for your retirement kitty. The pension that your employer provides may not be sufficient to meet the expenses during a time when you would not have any other source of income. So, it is best to supplement your employer’s pension with a pension plan that offers a substantial vesting benefit.

Q. I have multiple sources of income. Do I still need to buy a pension plan?

A. Having diverse incomes are beneficial to you during your earning years. When you are older, you may not get the same benefits from your alternate employment as you are receiving today. So, the ideal way to ensure that you have a steady income after retirement is by purchasing a pension plan with good vesting benefits.

Q. What risk factors are associated with the HDFC Life Pension Super Plus plan?

A. All unit linked life insurance plans are subject to varying risk factors, unlike traditional insurance plans. The premiums that you would pay towards the policy are subject to investment risks. The NAVs of the units may go up or down on the basis of fund performance and factors influencing the capital market. The past performance of fund options do not indicate the future performance, either. So, it is advisable to understand the risks and charges from your insurance agent or through reviews of the policy document.

Q. What are the charges for the HDFC Life Pension Super Plus plan?

A. Various charges for the plan are detailed below:

Premium Allocation Charge - This is a charge based on premium. After the deduction of this charge from the premium amount, the remaining value is invested in buying units. This remaining percentage of your premium with which you buy units is called the Premium Allocation Rate.

Premium due in year	Premium allocation rate
1 to 10	Annual policies - 97.5%
	Non-annual policies - 98.75%
11 and above	102.50%
Top-up Premium	99%

Fund Management Charge - The FMC will be included in the daily unit price. This charge is 1.35% per annum of the fund value, charged daily.

Policy Administration Charge - This charge is levied as per the schedule below:

Year 1 to 5 - 0.40% per month of the premium that is annualised

Year 6 onwards till the end of the policy term - 0.47% per month of the Original Annualised Premium

This charge is deducted on a monthly basis, and the maximum deductions per month would be Rs.500. The charge is levied through cancellation of units from the fund, and it is guaranteed for the entire policy term.

Mortality Charge - Every month, a charge is levied for providing the policyholder a death cover. The age of the insured and level of coverage decides the amount of charge levied each month. This charge is deducted by cancelling units from the fund and is guaranteed for the entire term of the policy.

Investment Guarantee Charge - The Investment Guarantee Charge is a part of the daily unit price, and is 0.40% per annum of the fund’s value. This amount is charged daily and is applicable only for an in-force policy. This charge is not levied on a Discontinued Policy Fund. The charge is also guaranteed for the entire policy term.

Discontinuance Charge - This amount is dependent on the year the policy was discontinued, and also the annualised premium on the policy. There would be no charges after the fifth policy year. There will be no discontinuance charges for top-up premiums, as well. The discontinuance charges may be tabulated as follows:

Discontinuance during policy year	Discontinuance Charge
	Annual premium up to and inclusive of Rs.25,000	Annual premium above Rs.25,000
1	Lower of 20% * (Annual premium or fund value) not above Rs.3,000	Lower of 6% * (Annual premium or fund value) not above Rs.6,000
2	Lower of 15% * (Annual premium or fund value) not above Rs.2,000	Lower of 4% * (Annual premium or fund value) not above Rs.5,000
3	Lower of 10% * (Annual premium or fund value) not above Rs.1,500	Lower of 3% * (Annual premium or fund value) not above Rs.4,000
4	Lower of 5% * (Annual premium or fund value) not above Rs.1,000	Lower of 2% * (Annual premium or fund value) not above Rs.2,000
5+	Nil	Nil

Miscellaneous Charge - If the policyholder requests for any alteration on the policy, he/she will be charged an amount of Rs.250 per request. Any administrative charges introduced later may also be included under this category of charges.

Q. Can any of these charges be altered?

A. The Mortality Charge Rate, Policy Administration Charge, and Investment Guarantee Charge cannot be altered. All other charges can be modified subject to prior approval from the IRDAI.

Q. Can the policy be assigned or transferred?

A. This policy can be transferred or assigned in part or as a whole, with or without consideration. The assignment can be made by an endorsement on the policy or through a separate notice to the insurance company. The reasons for the assignment and the terms on which the assignment is done should be indicated in the instrument of assignment. Once the assignment is authorised and attested, the fee for the transfer should be paid. The insurer may accept or decline the assignment proposal, based on their guidelines.

Q. What should be done if the assignment proposal is rejected?

A. If you are aggrieved by a rejected assignment proposal, you can raise a claim to the IRDAI within 30 days from the receipt of the refusal letter from the insurance company.

Q. Is Service Tax applicable on the policy charges?

A. Service Tax and Education Cess are applicable on all charges linked to the policy. If any other statutory levy or indirect tax is applicable in the future, the policyholder will have to bear it as well.