HDFC Life Insurance
HDFC Life Insurance Assured Pension Policy

HDFC Life Assured Pension Plan

HDFC Life Assured Pension Plan is a unit-linked retirement plan that has been designed keeping in mind the needs of senior citizens so that they can spend their retirement days worry-free. Once you retire, the regular flow of income is stopped, but your responsibilities towards others and life do not get stopped. So, it is very vital that you start to do your retirement planning as early as possible to build a financial corpus to secure your post-retirement life. This plan will allow you to secure your retirement with assured vesting benefits and you can gain from the upside in the market. Since it is a unit-linked plan, the market risks related to the customer portfolio have to be borne by the life assured only. To know more about this plan in detail, have a look at the following mentions.

Eligibility Criteria

Entry age

Minimum – 18 years Maximum – 65 years

Vesting age

Minimum- 45 years Maximum – 75 years

Premium payment frequencySingle pay, annual, half-yearly, quarterly, and monthly.
Policy terms10 years and 15 to 35 years
Minimum premiumRs. 24,000 annually for regular and limited pay options
Maximum premiumNo upper limit
Free look period15 days and 30 days
Grace period15 days for monthly premium payment frequency, and 30 days for annual, half-yearly, and quarterly premium payment frequency.

Basic Details of HDFC Life Assured Pension Plan

Let us find out the general benefits and facilities that this plan offers in the following table

Vesting BenefitYour policy vests at the end of the policy term, and you are eligible to avail of Maturity (Vesting) Benefit which is equal to fund value or assured vesting benefit, whichever is higher.
Death benefitIn the case of the unfortunate and untimely demise of the life assured during the policy term of an active policy, the nominee or the legal heir will get the death benefit which is equal to the Fund Value or 105 % of the total premiums received up to the date of death. Upon the payment of this benefit, the Policy will get terminated automatically, and no further benefits are payable.
Utilization of policy proceeds

Under this section, you are eligible to avail of the following benefits:

  • On vesting – On the date of vesting, the insured person is allowed commute up to 60% and utilize the balance amount to purchase an immediate annuity or deferred annuity from HDFC Life at the then prevailing annuity rates. Or else, you can also buy the same from another insurer that is subject to the terms and conditions of the company.
  • On Death: If the life assured faces an untimely demised during the deferment period, the nominee or beneficiary can withdraw the entire proceeds of the policy, or can utilize the entire proceeds or part thereof for purchasing an immediate annuity or deferred annuity at the then prevailing annuity rate from HDFC Life or from another insurer.
Different charges

Once you buy HDFC Life Assured Pension Plan, you need to pay the following charges:

  • Premium allocation charge – This is a premium-based charge. After deducting this charge from your premium, the remainder is invested to buy units.
  • Fund management charge – The Fund Management Charge is 1.35 % per annum of fund value
  • Investment guarantee charge – This charge is charged daily, and is a percentage of the unit funds. It is charged only in the case of an active policy.
  • Statutory charge – The Statutory taxes and levies as applicable would be charged.
  • Discontinuance charge – This charge depends on the year of discontinuance and your annualized premium. There is no charge after the 5th policy year.
  • Miscellaneous charges – For example, policy alteration charges.
  • Policy administration charge – It depends on the policy year and premium payment frequency.
Tax benefitsTax benefits are available as per the prevailing tax laws.
Rider benefitAvailable, HDFC Life Protect Plus Rider

Key features of HDFC Life Assured Pension Plan

Apart from the above general benefits of the policy, it has come up with certain unique advantages that have made the policy popular among consumers. The followings are the mentions.

Pension Multiplier – Loyalty additions in the form of Pension Multipliers will be added to the fund value only if you have paid all the due premiums every alternate year starting from the end of the 11th policy year. These additions will be equivalent to 1% of the average fund value for the immediately preceding two years.

Deferment of Vesting Age – With this plan, you have the flexibility to postpone the vesting date any number of times, which is subject to the maximum vesting age of 75 years, provided you are below the age of 60 years. In that case, the funds will move to Pension Conservative Fund.

Benefits on Discontinuance and Surrender – If you discontinue or surrender the policy, you are entitled to receive the following benefits:

  • During the lock-in period – If you do not pay the premium even within the grace period, the fund value after deducting the applicable discontinuance charges shall be credited to the discontinued policy fund, and the risk cover and rider cover, if any, will cease.
  • After the lock-in period – In that case, the policy shall be converted into a reduced paid-up policy with the paid-up sum assured. The Paid-up sum assured refers to the original sum assured multiplied by the total number of premiums paid to the original number of premiums payable as per the terms and conditions of the policy.

Revival – This policy gives you the option to revive a discontinued policy in the following ways:

  • During the lock-in period – In that case, all due and unpaid premiums which have not been paid have to be paid without charging any interest or fee.
  • After the lock-in period – You can revive the policy by restoring the original risk cover in accordance with the terms and conditions of the policy.

If the product is bought as QROPS (Qualifying Recognized Overseas Pension Schemes)

If QROPS policyholders purchase the policy through the transfer of UK tax-relieved assets, they will be eligible to avail of the following benefits:

  • Vesting Benefit – In that case, access to benefits from policy proceeds both in the form of commutation and Annuitisation would be restricted till the policyholder attains 55 years of age or vesting age, whichever is later.
  • Surrender or Discontinuance Benefit – The same benefit will be provided to the policyholder till he/she attains 55 years of age or the end of the lock-in period whichever is later.
  • Cancellation in the Free Look Period – For the QROPS policyholders, the proceeds from cancellation in the free look period will only be transferred back to the Fund House from where the money was received.
  • Overseas Transfer Charge – The company will deduct an amount only to the extent of the applicable tax charge from the Policy Fund Value and remit the same to HMRC (Her Majesty Revenue and Customs).

General exclusions of HDFC Life Assured Pension Plan

To have an overall, comprehensive idea of a policy, you need to know its exclusions of it as well to avoid future complexities. Therefore, to make it easier for you, here are the general exclusions of this policy.

  • Anything that is not approved by the terms and conditions of the company will fall under the category of exclusions.
  • In case of a breach of law, you cannot avail yourself of the benefits of the policy.
  • In the case of demise of the life assured arising out of suicide within 12 months from the date of commencement of the policy or from the date of revival of the policy, as applicable, the beneficiary or the nominee will be eligible to receive the fund value, as available on the date of intimation of death.

Frequently Asked Questions

You cannot make any changes (decrease/increase) in policy terms, premium amount, partial withdrawals, and premium payment term once the policy is bought. However, you will have an option to change the premium payment frequency.

The company calculates the assured vesting benefit in the following way:

[101% + 1% * (Policy Term minus Premium Paying Term)] of the total premiums paid. However, it is subject to the terms and conditions of the company.

There is no Mortality Charge under this policy.

The unit price of Unit Linked Funds will be computed as the following:

Market Value of Investments held by the fund plus the value of any current assets less the value of current liabilities and provisions, if any.

The following potential factors can influence your investment in a pension plan:

  • Your current age
  • Desired vesting or retirement age
  • Your current financial background
  • Desired financial corpus
  • Your requirements