Life Insurance HDFC Life Insurance Guaranteed Pension Plan

HDFC Life Insurance Guaranteed Pension Policy

HDFC Life Guaranteed Pension Plan

HDFC Life Guaranteed Pension Plan is a participating and limited period deferred annuity plan that offers the policyholder secured benefits upon vesting or upon death. The insurance policy offers yearly assured additions as well as a lump sum vesting addition at maturity. This plan might be quite advantageous for anyone looking for assured returns on their retirement savings.

Eligibility Criteria

Minimum Entry Age	35 Years
Maximum Entry Age	70 Years
Minimum Vesting Age	55 Years
Maximum Vesting Age	80 Years
Policy Term	8 To 30 Years
Premium Payment Term	5 To 12 Years

Key Attributes Of HDFC Life Guaranteed Pension Plan

HDFC Life Guaranteed Pension Plan covers the following aspects:

Guaranteed Additions	3% of SA (Sum Assured) on vesting for each completed policy year
Grace Period	For yearly, half-yearly, and quarterly frequencies of this plan, the grace period from the due date of the premium is 30 days. For monthly frequency, the grace period is 15 days after the premium payment deadline.
Lapsation	The insurance will become lapsed if the policy has not yet developed a surrender value and the policyholder does not pay the premiums payable under the terms of the policy during the permitted grace period. The risk cover won’t exist in this case, and benefits won’t be paid.
Paid-Up	If the policyholder quits paying premiums after the policy has accrued a surrender value, the policy will enter the paid-up status at the end of the grace period.
Revival	A paid-up or expired insurance may be reinstated during the revival period under the terms and conditions set forth by the insurer. All unpaid premiums and related taxes must be paid in order to reinstate a policy. The processing of the revival would cost Rs. 250.
Surrender Value	A Guaranteed Surrender Value would be reached for the policy when: The first two years’ premiums have been paid (for premium paying terms of 5 or 7 years) The first three years’ worth of premiums have been paid (for a premium paying term of 10 years) Guaranteed Surrender Value (GSV): Percentage of total paid premiums + Surrender value of accumulated guaranteed additions
Alterations	Allowed

Benefits Offered By HDFC Life Guaranteed Pension Plan

You should consider buying HDFC Life Guaranteed Pension Plan because of the following reasons:

Vesting Benefit

The following sums are payable to the policyholder if they live until the date of vesting and have paid all premiums due during the premium-paying term:

Assured Amount Upon Vesting
Certain Additions
Adding Vesting

Death Benefit

The insurance provider would pay the nominee the Assured Death Benefit if the policyholder passes away during the policy period. This value is equal to the total premiums paid up to that point, compounded annually at a rate of 6%. The policyholder’s paid premiums are equal to 105% of the minimum death benefit amount at all times.

Policy Proceeds Benefit

The policyholder may take the vesting benefit and surrender benefit in any of the following methods in accordance with current regulations:

Vesting Benefit

The policyholder is entitled to the following rights as of the date of vesting:

To commute up to 60% and use the remaining funds to buy an immediate or deferred annuity from the company at the then-applicable annuity rates.
To buy an immediate annuity or a deferred annuity from another insurer at the then-current annuity rates by paying a proportion of the total proceeds of the policy, currently set at 50%.

Surrender Benefit

The following are the policyholder’s rights on the date of surrender:

To commute up to 60% and use the remaining funds to buy an instant or delayed annuity from the company at the then-applicable annuity rates.
To spend an amount specified by the authority, currently 50% of the total proceeds of the policy after commutation, to purchase an immediate annuity or deferred annuity from another insurer at the then-current annuity rates.

Tax Benefits

According to Section 80C of the Income Tax Act of 1961, the premiums you pay for the HDFC Life Guaranteed Pension Policy are eligible for tax breaks.

Moreover, according to Section 10(10A) of the Income Tax Act of 1961, you are permitted to receive up to one-third of the tax advantage as a commuted value that is tax-free. Additionally, you have the option to use the remaining funds to buy a life annuity from HDFC Life.

The tax benefits indicated here may change in accordance with current tax laws. Therefore, it is advised to double-check this with your tax advisor before investing in the HDFC Life Guaranteed Pension product.

Vesting Addition

According to the policy term, the value of vesting addition changes, as shown in the table below.

Policy Year	Vesting Addition (% of Sum Assured)
8 Years	24%
9 Years	27%
10 Years	30%
11 Years	33%
12 Years	36%
13 Years	39%
14 Years	42%
15 Years	45%
16 Years	48%
17 Years	51%
18 Years	54%
19 Years	57%

Premium Calculation Of HDFC Life Guaranteed Pension Plan

Let’s check out the premium illustration for the plan!

Name	Age	Gender	Policy Term	Sum Assured	Premium Amount
Devika Kumari	37 Years	Female	18 Years	Rs. 4 Lakhs	Rs. 65,527
Saksham Gupta	42 Years	Male	15 Years	Rs. 5 Lakhs	Rs. 86,528
Meenakshi Mishra	47 Years	Female	20 Years	Rs. 6 Lakhs	Rs. 95,973
Vishal Yadav	56 Years	Male	17 Years	Rs. 7 Lakhs	Rs. 1,17,479

Exclusions Under HDFC Life Pension Guaranteed Plan

There are no exclusions under the plan.

Frequently Asked Questions

1. Does the vesting benefit automatically become an annuity under the HDFC Life Guaranteed Pension Plan?

No. By acquiring an annuity plan from HDFC Life, the vesting benefit may be converted into an annuity. The policyholder must fill out a form for an annuity proposal and provide the insurance firm with the necessary paperwork. The annuity payout will occur in accordance with the insurance company’s timetable.

2. If I have multiple sources of income, do I still need to purchase this pension plan?

Having numerous sources of income is always advantageous during your earning years. Your profession, however, could not offer you the same advantages as it does now as you get older. By investing in a pension plan that offers you good vesting benefits, you may assure that you will have a sizable income once you retire.

3. Do you have to pay service tax on the policy?

The HDFC Life Guaranteed Pension premium is subject to service tax. The policyholder will be responsible for paying any additional statutory levies or indirect taxes as they become applicable in the future.

4. I already have an HDFC Life savings and investment plan. Should I still get this pension plan?

Compared to a retirement plan, a savings and investment plan has a different function. Pension plans are made to give policyholders a reliable source of income at a time when they would otherwise have none. Additionally, retirement plans provide relatively little cash. This guarantees that the customer’s savings will be safe to use in their retirement.