Compare HDFC Life Personal Pension Plus Plan

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HDFC Life Personal Pension Plus Plan

HDFC Life Personal Pension Plus Plan is a traditional deferred annuity plan which aims to create a guaranteed retirement corpus for the policyholder. The plan also participates in bonus declarations which enhance the benefit amount. Moreover, the vesting benefit is also guaranteed to be a minimum of 101% of the premiums paid.

Key features of the plan

  • Premiums are payable throughout the plan tenure.
  • A high policy term of up to 40 years.
  • The minimum Vesting benefit is guaranteed to be 101% of premiums paid during the plan tenure.
  • Bonus additions increase the benefit payable under the plan.

How does the plan work?

Step 1 – the policyholder chooses the premium amount or the Sum Assured, the plan term and the premium paying frequency. If premium is chosen, the Sum Assured would be calculated based on it. If the Sum Assured is chosen, the premium would be calculated.

Step 2- in case of death during the plan term, the death benefit is paid. The death benefit is the Assured Death Benefit of 101% of premiums is paid till death and accrued bonuses. However, the death benefit should be a minimum benefit of 105% of all premiums paid till death.

Step 5 – if the insured survives the plan tenure, the maturity benefit is paid which is higher of the Sum Assured on Vesting along with accrued bonuses or Assured Benefit of 101% of all premiums paid during the plan tenure. The policyholder has to avail the vesting benefit in any of the options provided under the plan.

Example

Viral, aged 30 years, buys the plan and pays a regular premium of Rs.50, 000. The tenure selected is 20 years.

Option 1 – Viral dies in the 10th year of the policy. The benefit paid is 101% of total premiums paid plus accrued bonuses. Total premium paid is Rs.5 lakhs. Thus, the death benefit would be Rs.5 lakhs + accrued bonuses provided that the total amount is above 105% of Rs.5 lakhs i.e. Rs.5.25 lakhs.

Option 2 – If Viral survives the plan tenure, higher of the Sum Assured on Vesting along with accrued bonuses or Assured Benefit of 101% of all premiums paid during the plan tenure is paid as vesting benefit. 

Viral 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 benefit to buy a Single Premium Deferred Annuity Plan from the insurance company.

Plan benefits

  • Death benefit – if the insured dies during the term of the plan and all premiums have been duly paid, an Assured Death Benefit of 101% of premiums paid till death and accrued bonuses is paid. However, the death benefit should not be below 105% of all premiums paid till death. The nominee can avail the death benefit in lump sum or choose to take the benefit in annuity payouts by purchasing an immediate annuity plan from the company.
  • Maturity/Vesting Benefit – when the plan matures it is said to vest. On vesting, the Vesting Benefit is paid which is higher of the Sum Assured on Vesting along with accrued bonuses or Assured Benefit of 101% of all premiums paid during the plan tenure.
  • 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 immediate annuity payouts
    • The entire benefit can be used to buy a Single Premium Deferred Pension Plan from the company
  • Bonus – if due premiums are paid under the plan, bonuses are declared. The rate of bonus depends on the profit earned by the insurance company in a policy year. Simple reversionary bonuses are declared every year. On maturity or death, an interim bonus and a terminal bonus might also be paid.

Eligibility Criteria

  Minimum Maximum
Age at entry (in completed years) 18 years 65 years
Age at maturity (in completed years) 55 years 75 years
Term of the plan 10 years 40 years
Premium paying options Regular Pay
Premium Paying term 10 years 40 years
Annual premium amount Annually – Rs.24,000
Half-yearly – Rs.12,000
Quarterly – Rs.6000
Monthly – Rs.2000
No limit
Sum Assured on Vesting Rs.204,841 No limit

What is not covered in the policy?

There are no exclusions under the plan.

Premium Illustration

Given below is the sample premium rates payable by a non-smoking male aged 35 years for different combinations of Sum Assured on Vesting and policy term. The premiums are exclusive of taxes and are assumed to be paid annually.

HDFC-Life-Personal-Pension-Plus-Plan

FAQs

Can the vesting age be deferred?

No, there is no provision of deferring the vesting age under the plan. When the plan vests the policyholder has to receive the vesting benefits in any of the two options available under the plan.

What is the policy fee payable under the plan?

A policy fee is applicable to be paid with each premium instalment. The fee depends on the premium paying frequency and is Rs.200 per instalment for annual premiums, Rs.110 per instalment for half-yearly premiums, Rs.60 per instalment for quarterly premiums and Rs.25 per instalment for monthly premiums.

How is bonus calculated?

Simple reversionary bonuses are calculated as a percentage of the Sum Assured on Vesting. Moreover, the interim bonus and the terminal bonus are also calculated as a percentage of the Sum Assured on Vesting. 

Can the premium paying frequency be changed during the plan tenure?

Premiums under the plan can be paid in annual mode, half-yearly mode, quarterly mode or monthly mode. Once chosen on plan inception, the premium paying frequency cannot be changed.

Does the policy become paid-up?

If at least the first 3 years’ premiums have been paid under the plan and future premiums are not paid, the plan acquires a paid-up value. Once a plan becomes paid-up, the benefits payable under the plan reduces. Moreover, a paid-up policy also does not participate in future premium declarations.

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