HDFC Life Group Variable Employee Benefit Plan

• The plan is a non participating variable .
• The policy is of a group basis.
• The policy offers the option of maintaining individual member accounts in case of superannuation schemes.
• There will be a guaranteed addition of 1% p.a for the entire term of the policy. This is also known as the minimum floor rate.
• In addition to the minimum floor rate, the plan also offers a bonus or additional interest rate that is declared at the beginning of every financial quarter and is credited to the policy account
• The additional interest rate is credited after the minimum floor rate is credited and is a non zero positive interest rate.
• The policy offers income tax benefits to both employer and employee under the applicable income tax laws
• The policy also provides for residual additions. These additions are positive non zero additions and if any are credited, they would be done towards the end of every financial year.
• The policy covers various employee benefit schemes such as Gratuity, superannuation, leave encashment among others.
• The policy attracts a mortality charge.
• The policy has a free look period of 15 days.
• The policy allows for alterations.
• The scheme administrator maintains the nomination records and in accordance with these records, the benefits will be processed through the master policyholder.

Benefits of HDFC Life Group Variable Employee Benefit Plan

The benefits for Gratuity, encashment of leaves and other schemes that benefit employees are as follows

The benefits for superannuation is as follows

The benefits of the plan also include

• A minimum floor rate is 1% p.a. This is guaranteed for the entire term of the policy and is credited at the end of every financial quarter.
• An additional interest rate which is calculated as 95% of the gross yields expected to be earned on the backing assets minus the minimum floor rate is credited after the floor rate has been credited. This additional interest rate is a non zero positive rate and is declared at the beginning of every financial quarter.
• At the end of every policy year, residual additions that are non zero positive additions, if any are credited to the policy account. These residual additions are determined such that the reduction in yield requirements are not breached. These reductions are set to 80 bps.
• The policy allows for opting for additional funding only in the first year of the contributions made to the policy. There are 3 options for additional funding which are 3%, 2% or 1% of the contributions as additional funding. The additional funding will be recovered by deducting a percentage of contributions on which additional funding was opted from the account value.
• The recovery period is mentioned below

Charges

The policy attracts a mortality charge which is calculated as RS 1 for every RS 1000 of sum assured. This charge is not inclusive of statutory fees such as service tax.

Premium Discontinuance

In the case where the policyholder would like to surrender the policy the surrender benefit where the individual member level accounts are maintained with is equal to the value of the policy account. The surrender benefit for policy where the individual member accounts are not maintained by HDFC is equal to the aggregate account value of all members.

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