Compare HDFC Life Click 2 Retire Plan

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HDFC Life Click 2 Retire Plan

HDFC Life Click 2 Retire is an online Unit Linked Insurance Plan which is designed for retirement planning. Thus, this is a pension plan. The plan has very low charges which ensure that maximum premiums paid are invested in the chosen Fund. Moreover, the plan promises a guaranteed Vesting Benefit even if market volatility threatens to mar returns. A death benefit is also paid if the insured dies during the plan tenure.

Key features of the plan

  • The policy has no allocation or administrative charges. Thus, there is a potential of higher returns as maximum of the premium paid is invested.
  • An Assured Vesting Benefit is paid on maturity even if the Fund Value is low.
  • Premiums can be paid either for a limited tenure or at once during plan inception.
  • There are three funds and the policyholder can choose any fund for investment.

How does the plan work?

Step 1 – the policyholder chooses the premium amount, the plan term, premium paying term and frequency.

Step 2 – the policyholder then chooses to invest the allocated premium in any of the available 3 funds. The funds are Pension Equity Plus Fund, Pension Income Fund and Pension Conservative Fund.

Step 3- in case of death during the plan term, the death benefit is paid which is higher of the Fund Value or 105% of premiums paid till death.

Step 5 – if the insured survives the plan tenure, the maturity benefit is paid which is the Fund Value or the Assured Vesting Benefit. The policyholder has to avail the vesting benefit in any of the options provided under the plan.

Example

Sahil, aged 30 years, buys the plan and pays a limited premium of Rs.50, 000. The tenure selected is 20 years and premiums are paid for 10 years.

Option 1 – If Sahil dies during the term, higher of the Fund Value or 105% of premiums paid till death is paid to the nominee.

Option 2 – If Sahil survives the plan tenure, higher of the Fund Value or the Assured Vesting Benefit is paid. The Assured Vesting Benefit would be as follows:
[101% + 1% * (Plan tenure – premium paying term)] * Total premiums paid
= 101% + 1% * [(20-10)] * (50, 000*10)
= 101% + 0.1 * 500, 000
= 101% * 50, 000 = Rs.50, 500
Sahil can choose to receive the Vesting benefit in any of the following manners:

  • He can commute 1/3rd of the benefit and withdraw it in cash. This commuted benefit would be tax-free. The remaining 2/3rd of the benefit can then be used to avail annuity payouts from the insurance company.
  • He can use the entire vesting benefit to avail annuity payouts from the insurance company.
  • He can use the entire benefit to buy a Single Premium Deferred Annuity Plan from the insurance company.
  • Since Sahil is below 55 years of age, he can defer the vesting age to a maximum of 75 years. The Fund Value would be allocated to the Pension Conservative Fund and grow there. Applicable charges would be deducted during the deferment period. After the maximum vesting age is reached, the plan would vest and Sahil can choose any of the above-mentioned options of availing the vesting benefit.

Plan benefits

  • Death benefit – if the insured dies during the term of the plan, higher of the Fund Value or 105% of premiums paid till death is paid as death benefit. The nominee can use the death benefit to avail annuity payouts from the company or can withdraw the benefit in lump sum. Alternatively, a new annuity plan can be purchased using the death benefit.
  • Maturity/Vesting Benefit – when the plan matures it is said to vest. On vesting, the Vesting Benefit is paid which is higher of the Fund Value or the Assured Vesting Benefit. The Assured Vesting Benefit can be calculated using the following formula:
  • [101% + 1% * (Plan tenure – premium paying term)] * Total premiums paid
    The Vesting Benefit could then be used by the policyholder in any of the following options:

    • 1/3rd of the benefit can be withdrawn in cash which would be tax-free. This is called commutation of pension. The remaining 2/3rd of the benefit should then be used to avail annuity payouts
    • The entire benefit can be used to avail annuity payouts.
    • The entire benefit can be used to buy a Single Premium Deferred Annuity Plan from the company
    • The Vesting age can be deferred if the insured is aged below 55 years. Deferment is allowed up to a maximum vesting age of 75 years. On deferment, the Fund would be allocated to the Pension Conservative Fund to protect the returns generated. However, the applicable charges would be deducted during the extended deferment period.

Eligibility Criteria

  Minimum Maximum
Age at entry (in completed years) 18 years 65 years
Age at maturity (in completed years) 45 years 75 years
Term of the plan 10 years or 15-30 years
Premium paying options Limited Pay, Single Pay
Premium Paying term Single pay – once
Limited pay:
Term 10 years or 15-35 years – 8 or 10 years
Term 15 to 35 years – 15 years
Annual premium amount Single pay – Rs.50,000
Annually – Rs.24,000
Half-yearly – Rs.12,000
Quarterly – Rs.6000
Monthly – Rs.2000
No limit

What is not covered in the policy?

There are no exclusions under the plan.

FAQs

Are any alterations allowed under the plan?

Only the premium payment frequency can be changed under the plan.

Are there any conditions on paying monthly premiums?

Monthly premiums should be paid through ECS facility. Moreover, when buying the plan, the first 3 months’ premiums should be paid in advance.

How many times can the vesting age be postponed?

The policy allows unlimited deferment of vesting age as long as the maximum vesting age is not above 75 years.

What is the revival period?

The policy can be revived within 2 years from the date of the first unpaid premium.

Are there any riders in the plan?

No, there are no additional riders under the plan.

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