HDFC Life Group Unit Linked Pension

Overview

A group unit linked pension plan offering life cover and options to invest in different funds based on the risk appetite of the master policyholder. In addition to the life cover provided to every member under the group policy, the choice of funds in this plan can help manage superannuation schemes very effectively. This policy utilizes contributions from trustees and the master policyholder as investments to build on the superannuation fund value.

Eligibility Conditions for HDFC Life Group Unit Linked Pension Plan

This group insurance plan that allows employers to provide for superannuation benefits has got the following the eligibility conditions -

Parameter

Minimum

Maximum

Group size

10 members

N/A

Policy Term (Years)

1 year

Indefinite

Entry Age

18 years

74 years

Vesting Age

N/A

Earlier of 75 years or retirement age

Contribution at New Business

Rs. 5,00,000

N/A

Key Features of HDFC Group Unit Linked Pension Plan

This group pension plan has the following salient features -

Parameters

Details

   

Plan Type

Unit-linked non-participating pension plan

   

Basis

Group policy

   

Policy Term

Indefinite

   

Policy Validity

Annually renewed automatically until surrendered

   

Sum Assured

Being a group pension plan, the sum assured per member depends on the salary paid, annuity rates and the initial contribution made

   
       

Coverage

 

Member Level Accounts not with HDFC Life

Member Level Accounts with HDFC Life

 

Maturity/Vesting Benefit

Benefit is in line with the scheme rule of the employer till a maximum of the Fund Value or Assured Benefit

Higher of Fund Value or Assured Benefit

 

Death of a member

Benefit is in line with the scheme rule of the employer till a maximum of the Fund Value or Assured Benefit

Higher of Fund Value or Assured Benefit

 

Surrender Benefit

Existing fund value less the surrender charges

 

Free look Period

30 days in case of online purchase. 15 days otherwise

   

Fund Choice Selection

Investment Options

Defined Benefit (Member Level Accounts not present with HDFC Life)

Defined Contribution (Member Level Accounts present with HDFC Life)

   

Secure Option

Secure Option

   

Return Protector Option 1

Return Protector Option 1

   

Return Protector Option 2

Return Protector Option 2

     

Life Stage Allocation Option

Annuitisation Options

Allows the Vesting Benefit or Death Benefit to be paid out immediately in full, partially and a portion to be used to purchase an annuity plan, as the case may be

   

Nomination

Benefits of the individual member to be processed through the master policyholder in accordance with nomination records with the administrator

   

Benefits and Advantages of Group Unit Linked Pension Plan

utilizes different investment funds in order to aid in the growth of wealth and can be opted for by employers to aid in the management of superannuation benefits of employees. provided by this policy for the group members throughout the policy term is an added benefit. The key advantages in opting for this plan can be mentioned in the following points -

  1. Life cover is present throughout the policy term
  2. Indefinite policy term through an annual automatic renewing cycle
  3. Applicable tax benefits can be availed as per the prevailing tax laws
  4. Multiple fund options, 12 free switches and further chargeable unlimited switches to and from different fund options

The key benefits under this policy can be explained as below -

  1. Maturity/Vesting Benefit - This amount is made available to the group member upon retirement or resignation. The benefit can be withdrawn partially by the member and the rest of the amount can be used to purchase an annuity plan from . The entire proceeds of the benefit can also be utilised towards the annuity plan
  2. Death Benefit - In case of the death of the group member, Death Benefit will be payable to the nominee. It can withdrawn as a lump sum amount or can be used in part or whole to purchase an annuity plan from HDFC Life
  3. Surrender Benefit - As a group policy, this plan’s surrender benefits are only applicable for the master policyholder and will be equal to the fund value at the time of the surrender less the surrender charges
  4. Tax Benefit - As per the prevalent tax rules, tax benefits might be applicable for this plan with reference to the master policyholder

Investment of Funds under HDFC Life Group Unit Linked Pension

This unit-linked plan from HDFC Life comes with four fund options that offer a variable mix of risk and return. The premiums for the fund options are through employer and trustee contributions, and continue throughout the term of the policy. The details about such funds have been mentioned in the table below -

Fund Name

Details

Asset Categories

   

Risk and Return Rating

   

Money Market Instruments & Public Deposits

Govt. Securities & Bonds

Equity

 
   

Fund Ratios

     

Liquid Fund II

Lowest risk to capital and most stable returns

100%

N/A

N/A

Very Low

Secure Managed Fund II

A more potentially rewarding fund with increased stability

0-25%

75-100%

N/A

Low

Defensive Managed Fund II

Better returns and manageable stability

0-20%

50-85%

15-30%

Moderate

Opportunities Fund

Increase in better long term returns and some stability

0-20%

20-70%

30-60%

High

Charges in HDFC Group Unit Linked Pension Policy

Being an group insurance plan that relies on various funds to generate wealth on the investment made, the policy entails charges on quite a few aspects of itself. The applicable charges on this policy are as follows -

Charge

Particulars

 

Premium Allocation Charge

No premium allocation charge

 

Fund Management Charge

1.25% per annum of fund value, chargeable daily

 

Mortality Charge

Dependent on policyholder’s age and level of cover

 

Switching Charges

Rs. 40 per request post 12 free switches per policy year

 

Surrender Charge

Charged only if policy is surrendered before the third year and will be at 0.05% of the unit fund subject to a maximum of INR 5,00,000

 

Premium Payment for HDFC Life Group Unit Linked Pension Policy

The details of premium payment for this plan can be summarised in the table below -

Premium Parameter

Details

 

Premiums

Contributions made by employer or trustees to the unit fund to buy more units, subject to a minimum contribution of INR 5,00,000 for a new business

 

Premium Discount

Fund Value (in INR)

Percentage of policy fund to be added

 

>= 10,000,000

0.25%

 

>= 20,000,000

0.45%

 

>= 50,000,000

0.55%

 

>= 100,000,000

0.65%

 

>= 150,000,000

0.70%

Premium Paying Term (PPT)

Equivalent to the policy tenure

 

Premium Paying Frequency

Contributions can be made as and when the fund value decreases after a benefit payment

 

Premium Paying Modes

ECS, debit cards, credit cards, cheques and other acceptable modes

 

Premium Discontinuation Scenario for Group Unit Linked Pension

This group policy gets renewed automatically every year and the initial contribution counts as the single main premium paid. The fund value can depreciate on account of payments made towards annuitisation benefits but that will not account for the policy discontinuation. Only in the case of surrender, a policy shall be deemed discontinued and the fund value (less the surrender charges, if any) will be paid to the master policyholder.

GST of 18% is applicable on life insurance effective from the 1st of July, 2017

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