Overview
A unit linked insurance plan offering life insurance coverage and options to invest in different funds based on the risk appetite of the policyholder. In addition to the life cover that the plan provides, it offers a choice of funds that can steadily add to the growth of investment. This is a regular premium paying plan meant for people wishing to build a corpus through investing their annual savings in mutual funds.
Eligibility Conditions for HDFC Life ProGrowth Plus Plan
The plan comes with two options and 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 |
30 |
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Entry Age Life Option |
14 years |
65 years |
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Entry Age Extra Life Option |
18 years |
55 years |
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Maturity Age Life Option |
N/A |
75 years |
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Maturity Age Extra Life Option |
N/A |
70 years |
Key Features of HDFC ProGrowth Plus Plan
This plan meant for wealth creation has the following salient features -
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Parameters |
Details |
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Plan Type |
Unit-linked insurance plan |
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Basis |
Individual policy |
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Policy Term |
10 years to 30 years |
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Policy Validity |
Will be for the chosen policy term in case all premiums have been paid |
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Basic Sum Assured |
Minimum |
Maximum |
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Age < 45 years |
Greater of 10x annualised premium or half the product of annualised premium times policy term |
40 times the annualised premium subject to a maximum of Rs. 40,00,000 |
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Age >= 45 years |
Greater of 7x annualised premium or a quarter of the product of annualised premium times policy term |
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Coverage |
Maturity Benefit = Fund value of all balance units at the end of the policy term. |
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Death Benefit |
Before insured life reaches 60 years |
On or after insured life reaching 60 years |
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Greater of Sum Assured (minus withdrawals made for 2 years preceding death, Total Fund Value, 105% of the premiums paid |
Greater of Sum Assured (minus withdrawals after the age of 58), Total Fund Value, 105% of the premiums paid |
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Accidental Death Benefit = Death Benefit + Additional Sum Assured |
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Surrender Benefit |
Before completion of 5 years |
After completion of 5 years |
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Fund value minus discontinuation charges moved to Discontinued Policy Fund and paid out with accrued interest after 5 years’ completion |
Fund value paid out immediately |
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Free look Period |
30 days in case of online purchase. 15 days otherwise |
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Grace Period |
15 days for monthly payment, 30 days for all other premium payment frequencies |
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Partial Withdrawals |
Allowed after a period of 5 policy years, provided the following terms are met -
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Fund Choice Selection |
Is allowed through -
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Settlement Option |
Allows the Maturity Benefit to be availed in installments over a period of five years |
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Nomination and Assignment |
Nomination and assignment facility available but only one can be chosen at a time |
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Reinstatement or revival |
Policy, if not surrendered, can be revived within two years from the date of last unpaid premium |
Benefits and Advantages of ProGrowth Plus Plan
This plan from utilizes different investment funds in order to aid in the growth of wealth and can be opted for by anyone aiming to garner greater returns on planned savings. 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 -
- Life cover is present throughout the policy term
- Flexible long term policy tenures for an investment portfolio with variable risk and returns
- Applicable tax benefits can be availed as per Section 80C and 10(10D) of the Income Tax Act
- Multiple fund options and unlimited switches to and from different fund options
The key benefits under this policy can be explained as below -
- Maturity Benefit - Paid once the policy reaches the maturity age, after the completion of the policy term, this amount can be paid to the policyholder or nominee. This amount includes the fund value of all the balance units in the account
- Death Benefit - In case of the death of the insured life, Death Benefit will be payable to the nominee. This will be less the withdrawals made by the policyholder made 2 years prior to the date of death or post 58 years of age as the case may be
- Accidental Death Benefit - In case of an accidental death, the nominee would receive an additional sum assured along with the death benefit that is applicable
- Surrender Benefit - Policy has a lock-in period of 5 years. If surrendered within the lock-in period, funds move to Discontinuance Policy Fund and get paid after 5 years are complete. In case surrender is done after 5 years, fund value is paid out immediately
- Tax Benefit - The contributions made towards the premiums of this policy can be tax deductible as per Section 80C and the received benefits can fall under Section 10(10D). Though these benefits are dependent on the prevailing tax laws
Investment of Funds under HDFC Life ProGrowth Plus
This unit-linked plan from HDFC Life come with four fund options that offer a variable mix of risk and return. The premiums paid could be used over all of the fund options, a specific few as chosen by the policyholder or even in a single one. The details about such funds have been mentioned in the table below -
|
Fund Name |
Details |
Asset Categories |
Risk and Return Rating |
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Money Market Instruments, Cash & Deposits |
Liquid Mutual Funds |
Govt. Securities, Fixed Income instruments & Bonds |
Equity |
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Fund Ratios |
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Income Fund |
Potentially higher returns |
0-20% |
80-100% |
N/A |
Moderate |
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Balanced Fund |
Dynamically higher returns |
0-20% |
0-60% |
40-80% |
Moderate to High |
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Blue Chip Fund |
Large-cap equities |
0-20% |
N/A |
80-100% |
Very High |
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Opportunities Fund |
Mid-cap equities |
0-20% |
N/A |
80-100% |
Very High |
Charges in HDFC ProGrowth Plus Policy
Being an 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 |
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Premium Allocation Charge |
On Premium paid - 2.5% for Year 1, 2% for Year 2, 0% for Year 3 onwards |
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Fund Management Charge |
1.35% per annum of fund value, chargeable daily |
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Policy Administration Charge |
On annualised premium per month - 0.42% for Years 1-5, 0.83% for Years 6-10, 0% for Years 11-15 and 0.83% for Year 16 onwards |
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Mortality Charge |
Dependent on policyholder’s age and level of cover |
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Miscellaneous Charges |
Rs. 250 for policy alteration |
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Partial Withdrawal Charges |
Rs. 250 per request, Rs. 25 per request if made online |
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Switching Charges |
Rs. 250 per request, Rs. 25 per request if made online |
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Premium Redirection |
Rs. 250 per request, Rs. 25 per request if made online |
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Policy Discontinuance Charge (calculated on Annual Premium or Fund Value (APFV) and for the first four years only, zero from fifth year onwards) |
Annual Premium <= Rs. 25,000 |
Annual Premium > Rs. 25,000 |
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Lower of 20% of APFV <= Rs. 3000 |
Lower of 6% of APFV <= Rs. 6000 |
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Lower of 15% of APFV <= Rs. 2000 |
Lower of 4% of APFV <= Rs. 5000 |
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Lower of 10% of APFV <= Rs. 1500 |
Lower of 3% of APFV <= Rs. 4000 |
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Lower of 5% of APFV <= Rs. 1000 |
Lower of 2% of APFV <= Rs. 2000 |
Premium Payment for HDFC Life ProGrowth Plus Policy
The details of premium payment for can be summarised in the table below -
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Premium Parameter |
Details |
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Premiums |
Rs. 24,000, Rs. 10,000 and Rs. 2500 are the minimum limits and Rs. 1,00,000, Rs. 50,000 and Rs. 8333 are the maximum limits on the yearly, half-yearly and monthly modes of payment respectively |
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Premium Paying Term (PPT) |
Regular premium payment term and is equal to the policy term |
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Premium Paying Frequency |
Premiums can be paid in monthly, half-yearly and annual frequencies |
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Premium Paying Modes |
ECS, debit cards, credit cards, cheques and other acceptable modes |
Premium Discontinuation Scenario for ProGrowth Plus
Post the mentioned grace period, if in case premiums for the policy are not paid and the policy lapses, will cease to exist after the policy discontinuation and the fund value (as on the date of policy discontinuance) minus the discontinuance charge will be shifted into a Discontinued Policy Fund and the interest rate applicable on this fund is 4% per annum as of September 2015. This fund shall attract an FMC of 0.50% per annum. If this scenario happens within the first five policy years, the funds shall be paid out at the end of the lock-in period of five years. If the discontinuance happens after 5 policy years, one can convert the policy into a paid-up policy or ask for a time extension of up to 2 years to revive the policy, else one can withdraw from the policy without any risk cover and the fund value will be paid out immediately.
GST of 18% is applicable on life insurance effective from the 1st of July, 2017
