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  • HDFC Life Guaranteed Pension

    HDFC Life Insurance

    Overview

    A traditional non participating insurance plan which helps provide pension income based on savings made in the form of premiums. In addition to the life cover that the plan provides, it doubles up as a pension scheme that offers assured benefit on death or at vesting. This is a limited premium paying plan meant for people who wish to have a secure financial retirement or are planning to attain a lump sum value through limited savings over a chosen period.

    Eligibility Conditions for HDFC Life Guaranteed Pension Plan

    The plan could be of a tenure as low as 10 years and as high as 20 years and is also dependent on the age of retirement (vesting age) as per those, the eligibility conditions for availing this policy can be depicted in the table mentioned below -

    Parameter

    Minimum

    Maximum

    Policy Term (Years)

    10

    20

    Entry Age

    35 years

    65 years

    Vesting Age

    55 years

    75 years

    All the ages mentioned are as per the last birthday.

    Key Features of HDFC Guaranteed Pension Plan

    This plan meant for being an option towards pension payment has the following salient features -

    Parameters

    Details

     

    Plan Type

    Traditional non participating

     

    Basis

    Individual policy

     

    Policy Term

    10 years to 20 years

     

    Policy Validity

    Will be for the chosen policy term in case all premiums have been paid

     

    Basic Sum Assured

    Sum Assured on Vesting, subject to the premium minimum. No maximum cap.

     

    Additions/Bonuses

    Guaranteed Additions (% of Sum Assured on Vesting per year)

    Vesting Addition (% of Sum Assured on Vesting)

     

    3%

    10 years - 30%

       

    11 years - 33%

       

    12 years - 36%

       

    13 years - 39%

       

    14 years - 42%

       

    15 years - 45%

       

    16 years - 48%

       

    17 years - 51%

       

    18 years - 54%

       

    19 years - 57%

       

    20 years - 60%

    Coverage

    Vesting Benefit = Sum Assured on Vesting + Guaranteed Additions + Vesting Addition (paid as per regulations)

     
     

    Death Benefit = 105% of all premiums paid

     
     

    Surrender Benefit = Guaranteed Surrender Value or Special Surrender Value (subject to payment of premiums of 2 years or 3 years as the case may be)

     

    Free look Period

    30 days in case of online purchase. 15 days otherwise

     

    Grace Period

    15 days for monthly payment, 30 days for all other premium payment frequencies

     

    Nomination and Assignment

    Nomination and assignment facility available but only one can be chosen at a time

     

    Reinstatement or revival

    Policy, if not surrendered, can be revived within two years from the date of last unpaid premium and Rs. 250 is the revival fee

     

    Benefits and Advantages of Guaranteed Pension Policy

    This plan from HDFC Life allows a limited premium payment term to build a secure financial scenario for retirement. Life insurance provided by this policy 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. Flexible term policy tenures for secure pension plan
    3. Flexible premium payment tenures
    4. Applicable tax benefits can be availed as per Section 80CCC and 10(10A) of the Income Tax Act

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

    1. Vesting Benefit - On survival of the life insured till the vesting age, after the completion of the policy term, this amount can be paid to the policyholder. This amount includes the Sum Assured on Vesting, Guaranteed Additions and Vesting Addition. One third of the proceeds can be availed as tax-free lump sum cash amount and the rest can be used to purchase an annuity plan, a single premium deferred pension plan
    2. Death Benefit - In case of the death of the insured life, the Assured Death Benefit will be payable to the nominee. It will include total premiums paid till death at a guaranteed rate of 6% per annum compounded annually. The sum assured on death
    3. Surrender Benefit - In case 2 years’ premiums have been paid for a paying tenure of 5 or 7 years or 3 years’ premiums have been paid in full for a payment tenure of 10 years, the policy would acquire a Guaranteed Surrender Value and the same will be paid to the policyholder. In certain cases, the insurer may also pay an amount higher than the GSV which will be a Special Surrender Value
    4. Tax Benefit - The contributions made towards the premiums of this policy can be tax deductible as per Section 80CCC and the received benefits can fall under Section 10(10A). Though these benefits are dependent on the prevailing tax laws

    Premium Payment for HDFC Life Guaranteed Pension Plan

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

    Premium Parameter

    Details

    Premiums

    Minimum of Rs. 24,000 per annum, divided as per lower payment frequencies being Rs. 2000 per month and no maximum limit

    Premium Paying Term (PPT)

    Limited premium payment term of 5 years, 7 years or 10 years

    Premium Paying Frequency

    Premiums can be paid in monthly, quarterly, half-yearly and annual frequencies

    Premium Paying Modes

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

     

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