Systematically allocating a portion of your income can serve as a lifeline during various challenges, providing crucial support in times of need. Though there are several ways to cultivate a savings habit, investing in a suitable savings plan can create a buffer against life’s uncertainties and open the door to a more fulfilling life.
HDFC Life Sanchay Plus and LIC New Jeevan Anand are two popular life and savings insurance plans that guarantee to offer a financial safety net in the event of an unfortunate occurrence. However, choosing any one of these two plans can be confusing.
Thus, this post will highlight some of the most important differences between them for making a wiser decision!
Key Differences Between HDFC Life Sanchay Plus & LIC New Jeevan Anand
| Parameters | HDFC Life Sanchay Plus | LIC New Jeevan Anand |
| Entry Age | 30 Days To 65 Years | 18 To 50 Years |
| Policy Term | 5 To 20 Years | 15 To 35 Years |
| Maximum Maturity Age | 85 Years | 75 Years |
| Plan Options |
| Not Available |
| Rider Options |
|
|
| Lifelong Coverage | Available | |
| Loan Facility | 80% Of Surrender Value |
|
| Premium Payment | Single Pay, Annual, Half-Yearly, Quarterly, Monthly | Yearly, Half-Yearly, Quarterly, Monthly |
| Maturity Benefit | Available | |
| Death Benefit | Available | |
| Tax Benefits | You may be eligible for tax benefits in accordance with the current tax regulations. | The calculation of benefits payable under the plan will not take into account the amount of tax paid. |
| Grace Period | For Single Premium: Not Applicable For Monthly Frequency: 15 Days For Other Frequencies: 30 Days | |
Defining HDFC Life Sanchay Plus
Sanchay Plus plan from HDFC Life is a non-linked, non-participating insurance plan that offers a perfect combination of protection and savings. The policy usually offers flexibility in terms of premium payment options, policy terms, and premium payment terms.
Upon the completion of the policy term, the plan typically provides a maturity benefit, which includes the accumulated savings along with any applicable bonuses or returns. In case of the insured’s unfortunate demise, the plan offers a death benefit to the nominee. HDFC Life Sanchay Plus is ideal for individuals seeking a combination of consistent returns and insurance coverage.
Defining LIC New Jeevan Anand (Formerly Known As Plan 149)
New Jeevan Anand policy from LIC is a participating, non-linked life insurance policy that provides a dual advantage of both protection and savings. This plan ensures financial security in the event of the insured’s demise and also grants a lump sum amount upon survival at the end of the policy term.
Earlier the plan was released in its 149 version. But now LIC has released a new version of the plan, which is plan number 915. The key feature of this plan lies in its provision of dual advantages, offering a complete payout upon maturity and lifelong continuous coverage. LIC New Jeevan Anand also boasts various comprehensive sets of features, contributing to its widespread popularity within its segment.
Key Features & Benefits Of HDFC Life Sanchay Plus Plan
The plan has various attractive features and benefits. Some of them are discussed below:
4 Plan Options:
The plan comes with 4 options to select from. They are as mentioned below:
- Guaranteed Maturity: The maturity amount is paid as a lump sum after the policy term.
- Guaranteed Income: The maturity benefit is provided as a guaranteed income over a specified period following the conclusion of the policy term.
- Life Long Income: The maturity benefit is offered as a guaranteed income until the age of 99 after the policy term concludes.
- Long-Term Income: The maturity benefit is issued as a guaranteed income for a set duration post the policy term’s conclusion. This fixed income payout extends over a longer period compared to the “Guaranteed Income” option.
Single-Pay Option:
The majority of life insurance policies offer 4 modes of premium payment, including yearly, half-yearly, quarterly, and monthly. However, the Sanchay Plus plan from HDFC Life offers a single-pay option in addition to these modes.
This means that the customer can pay the entire premium amount in a lump sum upfront, as opposed to making regular premium payments over the course of the policy’s term. There’s no need to worry about missing payments or managing ongoing premium transactions.
Up To 10 Years Of Deferment Period:
The deferment period is a defined timeframe in which the insured individual, known as the life assured, experiences an inability to work until the initiation of benefit payments from their insurance policy.
The Sanchay Plus plan from HDFC Life offers a longer deferment period of 10 years, which offers individuals more time to engage in comprehensive financial planning. It allows them to accumulate savings and investments, making it possible to be more self-sufficient during the initial period of inability to work.
Guaranteed Benefits:
The plan offers both maturity and death benefits as per the plan option selected by the customers.
MATURITY BENEFITS:
- Guaranteed Income: Guaranteed Income for 10/12 years
- Guaranteed Maturity: Sum Assured on Maturity + Accrued Guaranteed Additions
- Lifelong Income Option: Guaranteed Income for 99 years + Return of Total Premiums at the end of payout period
- Long-Term Income Option: Guaranteed Income for 25/30 years
DEATH BENEFITS:
The ‘Sum Assured on Death’ under all the options of the plan will be the highest of any one of the following:
- 10 X Annualized Premium / 1.25 X Single Premium
- 105% of Total Premiums Paid
- Guaranteed Sum Assured on Maturity
- ‘Premiums Paid’ that are accumulated at an interest of 5% per annum compounded annually
- A guaranteed sum payable upon the insured individual’s death, equivalent to the assured sum.
Optional Riders:
The policyholders also have the option to enhance their HDFC Life Sanchay Plus plan by purchasing the following riders, which are available for an extra premium.
- Income Benefit On Accidental Disability Rider:
A benefit amounting to 1% of the ‘Rider Sum Assured’ per month will be provided for the subsequent 10 years in the event of ‘Accidental Total Permanent Disability’.
- Critical Illness Plus Rider:
Upon diagnosis and survival for 30 days following any of the 19 listed critical illnesses, a lump sum benefit equivalent to the ‘Rider Sum Assured’ will be paid.
It’s essential to note that these riders do not include a maturity benefit.
Enhanced Benefit For High Premium Policies:
For insurance with an annual or single premium of more than Rs. 1.5 lakhs, the plan offers various benefits, including additional maturity benefits and annual additional income.
For instance, if policyholders have paid between Rs. 3 lakhs and Rs. 5 lakhs, then they will get the following benefits:
- Guaranteed Maturity Option:
0.50% of Total Maturity Benefit Payable as Additional Maturity Benefit
- Lifelong Income/Long-Term Income Option:
0.60% of Annualized Premium as Annual Additional Income
- Guaranteed Income:
0.50% of Annualized Premium as Annual Additional Income
For more details, kindly refer to the policy brochure!
Key Features & Benefits Of LIC New Jeevan Anand Policy
Here are some of the key benefits and features offered by the plan:
Death & Maturity Benefits:
Upon completion of the selected plan term and the survival of the insured, a maturity benefit is paid. This benefit encompasses the sum assured, vested reversionary bonuses, and any final additional bonus.
Moreover, in the event of the insured’s death during the coverage period, the death benefit is paid, consisting of the sum assured on death, vested reversionary bonuses, and a final additional bonus. The sum assured on death is calculated as either 125% of the chosen sum assured or 7 times the annual premium, whichever is higher. Furthermore, the death benefit is guaranteed to be not less than 105% of the total premiums paid.
Rider Benefits:
The policyholders of the New Jeevan Anand plan from LIC are allowed to enhance their coverage by purchasing riders for an extra premium. These riders offer additional financial protection in the event of specific contingencies such as critical illnesses, accidental death, or disability. This can provide a financial cushion for the policyholder and their family members during challenging times.
High Sum Assured Rebate:
Policyholders opting for a higher sum assured or coverage amount may be eligible for a premium rebate. The rebate percentage typically falls within the range of 1.50% to 3% of the basic sum assured. This incentive encourages individuals to choose higher coverage levels while simultaneously reducing their premium amounts.
Discounts On Premium Payment Modes:
The plan also features rebates linked to the chosen premium payment frequency. Policyholders who select a yearly and half-yearly mode can qualify for a rebate. Conversely, opting for quarterly mode, monthly mode, and salary deduction method may result in a higher premium compared to other payment frequency options.
Benefits Calculation Of HDFC Life Sanchay Plus & LIC New Jeevan Anand Policy
This section will highlight the illustration of benefits offered by both plans as per various factors.
HDFC Life Sanchay Plus Plan:
Suppose Mr. X, a 30-year-old healthy male, has purchased the option ‘Guaranteed Income’ of the HDFC Life Sanchay Plus plan. Other details are as follows:
- Premium Paying Term: 12 Years
- Policy Term: 13 Years
- Sum Assured: Rs. 12,50,000
- Annual Premium Payment: Rs. 1 Lakh + Taxes
- Payout Period: 12 Years
| Policy Year (In Years) | Premiums Paid By Mr. X Annually | Maturity Benefit OR Guaranteed Income (Annual) |
| 1 To 5 | Rs. 1 Lakh + Taxes | 0 |
| 5 To 12 | Rs. 1 Lakh + Taxes | 0 |
| 13 | 0 | 0 |
| 14 | 0 | Rs. 2,15,250 |
| 15 | 0 | Rs. 2,15,250 |
| 16 To 20 | 0 | Rs. 2,15,250 |
| 20 To 24 | 0 | Rs. 2,15,250 |
| 25 | 0 | Rs. 2,15,250 |
| Total | Rs. 25,83,000 |
Note: The death benefit at inception will be Rs. 1,541,346.
LIC New Jeevan Anand Policy:
Suppose Mr. Y, a 30 years old male, has purchased the policy with the following details:
- Policy Term: 35 Years
- Premium Payment Mode: Yearly
- Premium Amount: Rs. 3,165
- Sum Assured: Rs. 1 Lakh
The benefits available are as follows:
| End Of Year | Total Premiums Paid Till The End Of The Year | Guaranteed Benefits | Total Maturity Benefits Including Final Additional Bonus (If Any) + Simple Reversionary Bonus | Total Death Benefits Including Final Additional Bonus (If Any) + Simple Reversionary Bonus | |||
| Sum Assured On Maturity | Sum Assured On Death | @4% | @8% | @4% | @8% | ||
| 5 | 15,825 | 0 | 1,25,000 | 0 | 0 | 1,27,000 | 1,41,000 |
| 20 | 63,300 | 0 | 1,25,000 | 0 | 0 | 1,33,000 | 1,91,500 |
| 25 | 79,125 | 0 | 1,25,000 | 0 | 0 | 1,35,000 | 2,15,000 |
| 30 | 94,950 | 0 | 1,25,000 | 0 | 0 | 1,37,000 | 2,45,000 |
| 35 | 1,10,775 | 1,00,000 | 1,25,000 | 114000 | 256000 | 1,39,000 | 2,81,000 |
| 36 Onwards | ‘Death Benefits’ will continue. | ||||||
HDFC Life Sanchay Plus OR LIC New Jeevan Anand: What To Choose?
To determine which plan is best, it is important to consider your individual financial goals, insurance needs, and risk tolerance. However, the upcoming lines will show some aspects of both policies, so that the readers can have a better perception of both of them.
Talking about the HDFC Life Sanchay Plus plan, it certainly has some of the better features being a next version plan. In addition to providing multiple variants, the plan can serve as a great tool for receiving steady retirement income in the life-long option of payout. Moreover, it also offers assured income for a specified duration, with the payout amount progressively increasing each year.
The USP of all the variants under the HDFC Life Sanchay Plus plan is that their payouts are not only guaranteed but also completely tax-free, which is mostly not the case with other similar annuity plans. Therefore, this plan is best for retirees, young people looking for a retirement plan, or individuals falling under the higher tax bracket.
On the other hand, LIC New Jeevan Anand policy offers an attractive combination of endowment cum whole life insurance plan. It provides life coverage for the entire lifetime of the insured, even after the policy term ends. This means that the policyholder’s family will receive a death benefit in case of the insured’s demise, irrespective of when it occurs.
The plan may also provide regular reversionary bonuses, which are declared annually and become payable either on death or maturity. Additionally, there may be a terminal bonus, which is a one-time bonus paid at the end of the policy term. Thus, the LIC New Jeevan Anand policy is best for individuals seeking lifelong coverage, risk-averse plans, and a combination of savings and life insurance.
However, it’s crucial to note that the perceived “better” plan ultimately depends on your personal circumstances and preferences. It’s recommended to thoroughly review the policy documents, compare them, and seek professional advice from a financial advisor or insurance expert before making a decision.
