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  • HDFC Life Group Pension Plan

    HDFC Life Insurance

    Overview

    The HDFC Life Group Pension plan is a non linked group participating insurance plan that allows employers to superannuation schemes for their employees efficiently. The group pension plan serves as an effective motivator for the employees as well as a way to show them recognition for all their services rendered towards the organisation. This policy not only offers benefits for the employees but also secures the investments of the employers.

    Eligibility of HDFC Life Group Pension Plan

    Criteria

    Minimum

    Maximum

    Age of entry

    16 years as at last birthday

    75 years as at last birthday

    Premium

    RS 1,00,000

    No limit

    Modes of premium

    Monthly, every 3 months, every 6 months and yearly

     

    Features of HDFC Life Group Pension Plan

    1. It is a non linked participating insurance plan.
    2. The basis of the policy is for a group.
    3. The term of the policy is an indefinite period. It can be renewed yearly by the master policyholder.
    4. New members can join in on the policy at any defined date.
    5. The policy is an effective employee motivation tool and also serves as recognition for their valuable services rendered to the company.
    6. The policy offers 2 options. The policy can be made out with a single policy account or can be catered to individual member accounts.
    7. The policy offers a guaranteed floor rate of 0.5% every year.
    8. The bonuses are non negative and are declared and credited to the policy at the end of every financial year.
    9. The benefits of the policy include death and maturity.
    10. The master policyholder processes all benefits of the policy.
    11. The free look period of the policy is 15 days. A policy returned within this stipulated time frame cannot be revived. Only a new policy with new benefits can be purchased.
    12. The policy is subject to premium allocation charges.
    13. The policy provides tax benefits under the applicable tax laws.

    How the Plan Works

    This policy allows employers to effectively carry out operations of pension or superannuation. The employer at the time of policy purchase and commencement has to choose whether they would like to set up a master policy account or individual member accounts. The premiums attract a premium allocation charge. After this amount has been deducted from the premiums, the remainder is credited into the policyholder's account. The premiums can be paid in 4 modes which are monthly, every 3 months or quarterly, every 6 months or half yearly and yearly. The account of the policyholder is credited with bonuses on a yearly basis. The assured benefit for the policy is 0.5% p.a on the premiums that have been paid and is also known as the minimum floor rate. At the end of every financial year, a non negative bonus is declared and is credited to the account of the policyholder after the minimum floor rate has been credited.

    Advantages and Benefits of HDFC Life Group Pension Plan

    The Policy covers Death of a policy member, Maturity or vesting of the policy for a member and member exiting employment through early retirement, resignation or termination. These benefits are broken down by the type of account whether it is individual member level accounts or a master policy account. The following table breaks down the benefit through account type

    Benefit

    Individual member account

    Master Policy account

    Maturity or Vesting

    The maturity benefit is higher of either the account value of the member or the assured benefit

    The benefit paid to the member upon maturity falls in line with rules set by the employer and is subject to a maximum of the value of the policy account or the assured benefit

    Death of member

    In case of death of the member the nominee will receive higher of either the assured benefit or value of the member's account

    The benefit paid to the nominee in case of employer's death will be subject to the rules of the employer and is subject to the assured benefit or the value of the policy account

    Early retirement, termination or resignation

    The benefit paid is equal to the value of the member's account

    This benefit is also in line with the rules set by the employer and is subject to a maximum of the account value of the policy

    In all the above HDFC Life benefits the assured benefit is the guaranteed return which is calculated as 0.5% p.a on the premiums paid. Upon the payment of these benefits, all benefits for the member will cease.

    The policy is also eligible for tax benefits under the applicable tax laws.

    Charges

    The policy attracts a premium allocation charge. This charge is levied on the premiums at the time of payment and is 0.05% p.a. On the premiums paid. The premium allocation charge is subject to a maximum of RS 10,000. The charge is exclusive of any service tax or education cess.

    Premium Discontinuance

    If the policyholder decides to surrender the policy then in those instances where the policy has individual member accounts maintained with HDFC, the surrender value is equal to the aggregate value of the account of all the members. If the individual member level accounts are not maintained with HDFC, the surrender value is equal to the value of the account. In both cases there will be no surrender charge levied.

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