HDFC Life New Group Linked

Overview

The is a plan that enables employers to carry out fiduciary responsibilities in a transparent and efficient manner. The HDFC Life plan allows employers to give the employees the recognition they deserve through employee benefit schemes thereby retaining and motivating the workforce and increasing overall productivity.

Eligibility of HDFC Life New Group Linked Plan

Criteria

Minimum

Maximum

Premium

Each policy has a minimum premium of RS 5,00,000

Nil

Group size

Minimum 10 members

Nil

Age of entry

As per rules of the scheme and the trust deeds

 

The policy has an indefinite term and can be renewed each year.

Features of HDFC Life New Group Linked Plan

  1. The plan is a unit linked insurance plan.
  2. The plan is of a group basis.
  3. The benefits such as leave encashment and gratuity are to be paid by the master policyholder or employer and is not borne by the insurer.
  4. The plan offers a range of investment funds with varying degrees of risk exposure and return ratings.
  5. The policyholder has the option of switching and offers 12 free switches every year to change the proportion and mix of funds invested.
  6. The policy provides for liquidity by allowing smaller investments to be made.
  7. The plan provides flexibility in payment of premiums.
  8. The policy provides for claw back additions. These additions begin from the 5th policy year onwards and are added at the end of every year. Along with net yield and gross yield, the reduction in yields on actual returns is calculated and if these reductions are greater than stipulated by the regulations, claw back additions are made to the fund to comply to the stipulated yield requirements.
  9. The plan offers income tax benefits to both the employer and the employee under the applicable tax laws.
  10. The policy covers the event of death and members exiting the scheme.
  11. The policy offers large fund discounts for any premium grater or equal to RS 1 crore.
  12. The free look period of the policy is 15 days.

Benefits of HDFC Life New Group Linked Plan

  1. Maturity benefit: this policy does not have a maturity date and the policy will go on for as long as it is not terminated by either parties.
  2. Benefits paid when a member exits the scheme: In the event a member exits a scheme, the policyholder will request for the amount to be paid to the beneficiary. This amount will be drawn from the policy fund to make the payment available and the maximum amount payable is equal to the value of the policy fund.
  3. Large fund discount: for those greater or equal to RS 1 crore an amount equal to 0.25% p.a on the policy's fund will be added to the policy. This discount is 0.45% if the premium is greater or equal to RS 2 Crores, 0.55% if the premium is greater or equal to RS 5 Crores , 0.65% if the premium is greater or equal to RS 10 Crores and 0.70% if the premium is greater or equal to RS 15 Crores.
  4. Death benefit: In the unfortunate event of a death of an eligible member, along with the amount paid from the unit linked fund, an additional RS 1000 will be paid to the policyholder.

Investments

Below table discusses the choice of investment funds offered by New Group Linked Plan

Fund name

Assets

Composition

Risk and Return

Liquid Fund II

Money market Instruments

100.00%

Very Low

 

Government securities and bonds

   

Defensive managed Fund II

Money market Instruments

0 to 20%

Moderate

 

Equity

50 to 85%

 
 

Government securities and bonds

15 to 30%

 

Balanced managed Fund II

Money market Instruments

0 to 20%

High

 

Equity

30 to 60%

 
 

Government securities and bonds

20 to 70%

 

Equity managed Fund II

Money market Instruments

0 to 15%

Very High

 

Equity

60 to 100%

 
 

Government securities and bonds

0 to 40%

 

Secure Managed Fund II

Money market Instruments

0 to 25%

Low

 

Government securities and bonds

75 to 100%

 

Growth Fund II

Money market Instruments

0 to 10%

Very High

 

Equity

90 to 100%

 

Charges

Below are the charges levied in this policy

Charge

Description

Fund Management Charge

This is a daily charge and is calculated as 1.25% of the funds value.

Mortality Charge

This charge is not inclusive of service tax and education cess and is calculated as Re 1 for every RS 1000

Premium Allocation Charge

This charge is deducted from the premium and the remainder is invested. The premium allocation charge is 2% if the policy is sourced through an intermediary.

Surrender Charge

Applicable if policy is withdrawn before the third anniversary of the policy. It is 0.05% of the policy fund and is subject to a maximum of RS 5,00,000

 

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

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