Investment Plans 263 views April 19, 2021

HDFC Life Assured Pension Plan is a unit-linked pension plan that offers regular payouts during the retirement period along with a life cover. Under this pension plan, the investment risk in the investment portfolio is borne by the policyholder. This plan ensures adequate investment for your retirement years. Highlights of the HDFC Life Assured Pension Plan are –

  1. Pension Multiplier
  2. Vesting Benefit
  3. Death benefit
  4. Limited Pay & Single Pay – Options

Keep reading this page further and know more about the features and benefits of the HDFC Life Assured Pension Plan.

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Pension Multiplier Benefit Under HDFC Life Assured Pension Plan

Loyalty additions will be added to the fund value in the form of Pension Multipliers, provided premiums have been paid and the policy is in force. These additions, which will start from the end of the 11th policy year, are equivalent to 1% of the average fund value for the preceding two years.

 HDFC Life Assured Pension Plan Vesting Benefit

Your policy provides vesting benefit from the end of the policy term. It will be higher of –

  1. Fund Value
  2. Assured Vesting Benefit

Here, the Assured Vesting Benefit will be calculated as:

[101% + 1% x (Policy Term – Premium Paying Term)] of the total paid premiums.

As per the current regulations, you can take the Vesting Benefit in the following ways:

  1. Receive 1/3 of the benefit as tax-free cash in a lump sum, and the remaining amount as an annuity at the prevailing annuity rate. If you choose this settlement option, you have to buy the annuity from HDFC ERGO as per the prevailing regulation.
  2. You can utilize the entire vesting benefit by purchasing an annuity at the prevailing annuity rate from the insurer
  3. Alternatively, you can utilize the entire vesting benefit to purchase a single premium deferred pension plan.

You can extend the accumulation period/deferment period within the same policy with the same terms and conditions, provided your age is below 55 years at the time of vesting. Deferment of vesting date can be intimated to the insurer any time before annuitization. This way, you can postpone the vesting date as per your choice. The maximum vesting age is 75 years.

When you postpone the vesting date, Assured Vesting Benefit and Death Benefit will continue to apply. The Assured Vesting Benefit will be the same as calculated, and the funds will move to Pension Conservative Fund. All applicable charges shall also continue plus Pension Multipliers will continue to be added to the fund value.

If you choose to convert the vesting benefit to an annuity, it will be through the purchase of a new policy from HDFC ERGO.

Death Benefit Payout from HDFC Life Assured Pension Plan

In case of your unfortunate death before the end of the policy term, your nominee/legal heir will receive a higher of –

  1. Fund Value
  2. 105% of the total paid premiums

The nominee/legal heir has an option to take the death payout amount as an annuity from the insurer or to withdraw the proceeds.

Note – Upon the payment of the death benefit, the policy terminates and no further benefits are payable.

HDFC Life Assured Pension Plan Policy Term & Premium Payment Term Options

There is no maximum limit on HDFC Life Assured Pension Plan premium payment. And the minimum premium amount will depend on your choice of premium payment frequency. Let’s check out the table below to know the same.

Premium Payment FrequencyMinimum Premium Amount (In INR)
Annual24,000
Half Yearly12,000
Quarterly6,000
Monthly2,000
Single Pay50,000

Note – Once the premium is finalized, it cannot be altered. However, you will have an option to change the premium payment frequency.

You can choose your premium payment term for the HDFC Life Assured Pension Plan, as the insurance company offers you the flexibility to choose from a wide range of Policy Term and Premium Paying Term, such as –

Premium Payment TermPolicy Term (In Years)
Single Pay10, 15 to 35
8 Pay10, 15 to 35
10 Pay10, 15 to 35
15 Pay15 to 35

Note – 8 Pay – Premium Payment for 8 years, 10 Pay – Premium Payment for 10 years, 15 Pay – Premium Payment for 15 years.

Free Look period

If you don’t agree to any of the terms or conditions of the policy, you can return the policy to the insurer stating the reasons for it, and this needs to be done within 15 days from the date of receipt of the policy. The free look period will be 30 days if the policy is purchased through distance marketing. Distance Marketing refers to insurance policies that are sold through any mode apart from face-to-face interaction like telephone, internet, online service, email, etc.

When the insurer receives your policy cancellation letter along with the original policy documents, it will arrange a refund of the value of units allocated to you on the date of receipt of request plus the unallocated premium, charges levied by cancellation of units, if any. This refund is subject to deduction of the proportionate risk premium for the period on cover, expenses incurred for medical examination from the insurance company’s end, and the stamp duty charges if any.

Note – Once a policy is returned it shall not be revived, reinstated or restored at any point in time.

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