HDFC Life Insurance
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 Age35 Years
Maximum Entry Age70 Years
Minimum Vesting Age55 Years
Maximum Vesting Age80 Years
Policy Term8 To 30 Years
Premium Payment Term5 To 12 Years

Key Attributes Of HDFC Life Guaranteed Pension Plan

HDFC Life Guaranteed Pension Plan covers the following aspects:

Guaranteed Additions3% of SA (Sum Assured) on vesting for each completed policy year
Grace PeriodFor 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.
LapsationThe 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-UpIf 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.
RevivalA 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


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 YearVesting Addition (% of Sum Assured)
8 Years24%
9 Years27%
10 Years30%
11 Years33%
12 Years36%
13 Years39%
14 Years42%
15 Years45%
16 Years48%
17 Years51%
18 Years54%
19 Years57%

Premium Calculation Of HDFC Life Guaranteed Pension Plan

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

NameAgeGenderPolicy TermSum AssuredPremium Amount
Devika Kumari37 YearsFemale18 YearsRs. 4 LakhsRs. 65,527
Saksham Gupta42 YearsMale15 YearsRs. 5 LakhsRs. 86,528
Meenakshi Mishra47 YearsFemale20 YearsRs. 6 LakhsRs. 95,973
Vishal Yadav56 YearsMale17 YearsRs. 7 LakhsRs. 1,17,479

Exclusions Under HDFC Life Pension Guaranteed Plan

There are no exclusions under the plan.

Frequently Asked Questions

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.

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.

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.

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.