HDFC Life Personal Pension Plus is a participating pension plan that is offered to customers who are looking to plan ahead for their retirement. Purchasing this policy assures you stable and secure returns on your investment and will serve as your post retirement income. This policy allows you to choose your investment term, anywhere between 10 and 40 years. The plan can be purchased on a single life basis only, with monthly, quarterly, half-yearly, or annual premium frequencies. You can also enjoy tax benefits for the premiums paid.
The HDFC Life Personal Pension Plus can be bought if you fulfill certain criteria set by the insurer. This is with respect to your age and the number of years for which you would require insurance. These eligibility requirements are detailed in the table below:
|Minimum Entry Age||18 years|
|Maximum Entry Age||65 years|
|Minimum Vesting Age||55 years|
|Maximum Vesting Age||75 years|
|Minimum Policy Term||10 years|
|Maximum Policy Term||40 years|
All ages mentioned above are with respect to the last birthday of the life insured.
The sum assured on vesting is determined by the premium that you choose to pay. Premiums can be paid either monthly, quarterly, semi-annually, or annually. You can also choose to receive a specific sum assured on vesting, and then your premiums will be determined based on that.
|Minimum Sum Assured on Vesting||Rs.2,04,841|
|Maximum Sum Assured||No limit on this amount|
The premium for insurance cover can be paid at intervals agreed upon with the insurer and predefined in the policy documentation.
Details on the premium are as follows:
|Frequency of premium payment||Minimum installment premium (exclusive of education cess and service tax)||Maximum installment premium||Policy fee per installment||Conversion factor|
The premium for frequencies other than annual is calculated by multiplication of the annual premium rates with the corresponding conversion factors, and then adding the policy fee for the frequency.
Retirement is a crucial phase in your life, as the income stops but expenses don’t. Your savings from today may not be sufficient to meet the costs that are incurred post retirement. It is hence, important to plan ahead for this phase, as the power of compounding enhances the retirement kitty manyfold on starting early. The HDFC Life Personal Pension Plus plan helps you build a healthy retirement corpus for your post-retirement goals. The benefits offered by the plan are as follows:
The way in which the vesting benefit is paid to the policyholder is determined by the regulations cited in the ‘Policy Proceeds’ section below.
Add-on plans are not applicable for this policy.
This plan does not have any exclusions.
Free-Look period - If you do not agree to the terms and conditions mentioned in the policy, you can choose to return the policy to the insurer with relevant reasons, within 15 days from the day on which the policy was received. If the policy was purchased through distance marketing, i.e., through channels where there is no face-to-face interaction such as telephone or internet, the free-look period will be 30 days. When the insurer receives the cancellation letter with the original policy document, the premium shall be refunded after deducting the stamp duty. Once you return the policy, you cannot revive, reinstate, or restore it again.
Surrender - It is important to continue on your insurance policy till the end of the tenure, in order to benefit from it the most. However, there may be situations where you are unable to do so. If you have paid the premium for the first three years, the policy will acquire a Guaranteed Surrender Value (GSV). The GSV is a percentage of all paid premiums, as per the terms and conditions. When the policy acquires GSV, the surrender value of the bonuses will be applicable. The amount that will be paid to you on surrender is detailed in the ‘Policy Proceeds’ section.
Grace Period - This is the time after the due date of the premium during which the policy will be in-force with the complete insurance cover. The HDFC Life Personal Pension Plus policy has a grace period of 30 days from the premium due date, for annual, semi-annual, and quarterly frequencies. The grace period for a policy with monthly frequency is 15 days from the due date of premium. If you raise a valid claim under the policy during this time, the insurer will honour the claim, as usual.
Lapsation - If the policyholder does not pay the due premium within the grace period, the policy will move into the lapsed status, provided that it has not acquired a surrender value. In the case of lapsed policies, the risk cover will not exist and benefits are not payable. It is possible to revive a lapsed policy, if required.
Paid-up - If the policyholder does not pay the premiums after the policy acquires surrender value, the policy will be converted to paid-up status when the grace period ends. After a policy moves to paid-up status:
The death benefit for a policy in paid-up status will be 101% of all premiums paid till death. Bonuses accrued on the policy till the time it was made paid-up will also be paid to the nominee.
The vesting benefit of a policy in paid-up status is the sum of the following:
The policyholder has the option of reviving his/her paid-up policy in the future.
Revival - A lapsed or paid-up policy can be revived within the revival period, based on the insurer’s terms and conditions.
Policy Proceeds - According to regulations, you can choose to take the Vesting Benefit and Surrender Benefit as described below:
In case you decide to convert the benefit into annuity, it will be through the purchase of a new insurance policy from the insurer.
The premiums paid under the policy are eligible for tax benefits under Section 80CCC of the Income Tax Act, 1961. Up to 1/3rd of the benefit can be availed as a commuted value (that is tax-free), as defined under section 10(10A) of the Income Tax Act, 1961. The remaining amount can be used to buy a life annuity from HDFC Life.
HDFC Life is a frontrunner in providing long-term insurance solutions in the country with a claim settlement ratio of 99.41% for FY 2013-14. Benefits of purchasing the HDFC Life Personal Pension Plus plan include:
HDFC Life has a wide network of offices across the country where they deliver long-term insurance solutions in an effective manner. They have 398 offices and 9,000 touch-points in India for easy access to their products. They also have a strong financial consultancy framework in the country and abroad.
A. Pension plans are configured to provide you a regular income post retirement. The motive of savings and investment schemes are hence, different from pension plans. In addition, pension plans do not offer much liquidity and your savings will be secured to offer you maximum benefits during the retirement years.
A. It is advisable to plan for your retirement when you are in your thirties. The earlier you start accumulating funds in your retirement kitty, the greater would be your savings. This is due to the fact that interests will be compounded to assure you greater savings at smaller initial investments.
A. Having diverse incomes is useful during your earning years. However, when you enter into retirement, your alternate sources of income may not be as successful as they are today. Increase in life expectancy, medical inflation, and the steep climb in cost of living makes it imperative to have a substantial amount set aside for expenses during your retirement life. A pension plan is ideal in assuring you a good retirement kitty for your future needs.
A. Your employer-funded pension may not be sufficient to pay for your post-retirement expenses. You should factor medical inflation and the rise in cost of living when you plan to save for your retirement kitty. As a thumb rule, you should look to accumulate at least 20 times the value of your income in the year preceding retirement. So, it is advisable to opt for a pension plan that will supplement your employer-funded pension.
A. First, you need to evaluate the amount of money that would be required to lead a good post-retirement life. Compare it with your current investments, and identify the balance amount. This is the amount that you should be investing for. On a broad level, it is understood that you need to save an amount that ranges from 10% to 25% of your income for securing a comfortable life post retirement. However, you should consider your age, your current investments and your new investments when you arrive at this amount.
A. The following terms apply to QROPS policyholders:
Surrender Benefits - If the policy has been purchased as QROPS through the transfer of UK tax relieved assets, the access to benefits of the policy, such as annuitisation and tax free commutation would be restricted. The restriction would continue till the policyholder reaches the age of 55 or the policy gets GSV, whichever comes later.
Cancellation during Free-Look period - If the policy was purchased as QROPS, the proceeds from the cancellation of policy during the free-look period will be moved back to the fund house from where the funds were received at the time of policy purchase.
A. The bonuses that you can avail with the HDFC Life Personal Pension Plus plan are as follows:
Reversionary Bonus - This bonus is a percentage of the sum assured on vesting, and it would be provided at the end of the financial year. The bonus will be paid on vesting if all due premiums have been borne by the policyholder. It should be noted that the reversionary bonus depends on the investment returns, mortality, tax, expenses, etc.
Interim Bonus - If the vesting benefit is payable before the declaration of the subsequent reversionary bonus, an interim bonus may be added. When this happens, the policy will not participate in the next declaration of reversionary bonus.
Terminal Bonus - This bonus may be added to the policy at the time it matures. This enables the company to pay a share of the surplus amount at the end, depending on how the experience is over the term of the policy. This is not a guaranteed benefit, as it is dependent on the future.
A. When HDFC Life receives all relevant information from the claimant, they will process the claim within 30 days. However, if the insurance company requires an investigation before the claim is processed, they will initiate this at the earliest possible time. The results of the investigation will decide when the payout will be made.
A. Once your claim is rejected the insurer will send you a letter stating the same. You will receive this rejection letter within 10 days of the decision.
A. Yes, you can purchase more than one policy from HDFC Life. However, this is subject to underwriting approval.