HDFC Life Guaranteed Pension

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

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 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
  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

 

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

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