Investment Plans 23823 views April 8, 2020

HDFC Life Sanchay Par Advantage

HDFC Life Sanchay Par Advantage Plan is a non-linked life insurance policy with participation benefits. It ensures lifelong regular income to the policyholder along with the flexibility of payout option and cover for a whole life. It also offers the flexibility to accrue the payouts of survival benefits. The option of deferred income is also offered along with guaranteed benefits. Tax benefits are also available under this plan under the prescribed sections of the Income Tax Act, 1961. Sanchay Par Advantage plan provides an option to receive cover for the entire life of the insured (till 100 years of age). It helps build a huge corpus for achieving the goals that you have planned and secure your family’s future without any compromises.

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Features of HDFC Life Sanchay Par Advantage

The key features offered by HDFC Sanchay Par Advantage plan are as follows:

  1. Sanchay Par Advantage offers life cover to the insured to as long as the insured lives or till 100 years of age
  2. It allows the insured to choose from immediate or deferred income options according to his/her needs.
  3. It offers the flexibility to choose accrued payouts of survival benefits under the plan. This life insurance plan can be brought only on a single life basis.
  4. The risk under the policy starts from the first policy anniversary when the age is less than a year and for other ages, the risk under the policy starts from the date of the contract’s inception.
  5. If the life insured is a minor individual, the policy will vest on him/her when he/she attains 18 years of age and the income payouts of the plan should be used for the minor’s benefits.
  6. The policyholder can choose to pay the premium either annually, semi-annually, monthly or quarterly as per his/her needs. The holder of the policy can also change the premium paying frequency at any time during the policy term.
  7. The policyholder can also choose to receive the payouts in the future annually, semi-annually, monthly or quarterly.
  8. The policy offers participation benefits to the policyholder. Cash bonus and terminal bonus will be paid to the policyholder the following financial year in which the profits were declared.
  9. The option of acquiring a surrender value is available under this plan upon the payment of the initial two years’ premium for the plan.
  10. The plan comes with two rider options that you can add to enhance its coverage. The two rider options include HDFC Life Income Benefit on Accidental Disability rider and HDFC Life Critical Illness Plus Rider.
  11. This policy offers a loan facility to the policyholder which can be a maximum of 80% of the surrender value of the insurance policy. This provides liquidity to the policyholder when he /she is in need of funds.
  12. Premiums paid and benefits received under the plan are eligible for tax exemptions under the prescribed section of the Income Tax Act, 1961.
  13. In case the insured commits suicide within 12 months of the date of commencement of the risk under the plan, 80% of the premium paid till the date of death will be refunded to the nominee of the insurance plan.

Eligibility Criteria of HDFC Life Sanchay Par Advantage

The eligibility conditions required to purchase the HDFC Life Sanchay Par Advantage are stated as follows:

ParametersMinimumMaximum
Entry ageImmediate Income option- 0 years ( 30days)
Deferred Income Option- 0 years ( 30 days)
Immediate Income Option- 65 years
Deferred Income Option- 55 years ( for PPT 8 years)
60 years ( for PPT 10, 12 years)
Age at Maturity 100 years
Term of Premium PaymentImmediate Income Option- 6 years, 8 years, 10 years and 12 years
Deferred Income Option- 8 years, 10 years and 12 years
Sum assured on MaturityRs 3,00,000No Limit
Policy Term100 years minus the age at entry
A fixed term of 30 years – 40 years can be selected
Premium AmountAnnually- Rs 25,000
Half Yearly- Rs 12,750
Quarterly- Rs 6,500
Monthly- Rs 2,188
No Limit

Benefits of HDFC Life Sanchay Par Advantage

The benefits offered by Sanchay Par Advantage plan of HDFC Life Insurance are as follows:

Income Options

It offers two options of income – Immediate Income and Deferred Income.

  1. Immediate Income provides regular and steady income by cash bonus from the first policy year and pays lump-sum amount at maturity.
  2. Deferred Income pays guaranteed income for a guaranteed time period along with regular and steady income in the form of cash bonus throughout the policy term. It also pays a lump sum maturity benefit.

Survival Benefit-

  1. Immediate Income Option: Cash bonus is paid as a survival benefit at the end of every policy year. It is paid from the very first year of the policy until the death of the insured or the end of the policy term, whichever is earlier.
  2. Deferred Income Option: Under this option, the guaranteed income and the discretionary cash bonus are paid in arrears 1 year after the end of the premium payment term.

Maturity Benefit

  1. Immediate Income Option: Maturity benefit is paid at the end of the policy term if the insured survives until that time. The sum assured on maturity under the plan along with accrued cash bonus, terminal bonus and interim survival benefit are paid as maturity benefits. The sum assured on maturity is the total annualized premium amount payable under the insurance policy.
  2. Deferred Income Option: Under this option, the maturity benefit is the same as under the immediate income option. However, the maturity benefit under this option also includes accrued guaranteed income, if not paid to the policyholder.

Death Benefit

  1. Immediate Income Option: The death benefit is paid to the nominee of the policy on the death of the insured individual during the term of the plan. It is paid as a lump sum amount, which is the sum assured on death, in addition to interim survival benefit (if any), accrued cash bonus (if not earlier paid) and terminal bonus (if declared by the insurance company). The sum assured on death will be the highest of 10 times the annualized premium amount,105% of the total premium paid by the policyholder, sum assured on the maturity of the policy or death multiple × the annualized premium.
  2. Deferred Income Option: The death benefit under this option is the same as immediate income option but in addition to an accrued guaranteed income.

The option of Deferral of survival benefits

Policyholders at any time during the term of the plan can defer the survival benefit that arises to him/her out of the declared cash bonuses or guaranteed income. They can accrue the benefit and receive it in a lump sum at a later stage. The policyholder also has the option to opt-in or opt-out of this facility during the policy term.

Additional Benefit

Additional benefit up to 1.2 % of the annualized premium is offered for those policies that have annualized premium of more than INR 1 Lakh.

Grace period

A 30-day grace period is allowed to the policyholders to pay all the due amount of premiums to ensure that the policy does not lapse. For a monthly premium payment option, a 15-day grace period is allowed.

Free Look Period

A period of 15 days is allowed from the date of inception of the policy within which the policyholder, if not satisfied with the plan, can return it to the insurance company. The premiums paid are refunded subject to certain deductions as may be provided.

Premium Payment

HDFC Life Sanchay Par Advantage premiums are based on the payment frequency – monthly, quarterly, half-yearly and yearly- chosen by us. Check the minimum premium payable across each of the frequencies and choose the one you feel comfortable with.

Premium FrequencyMinimum Premium Amount (In INR)
Monthly2,188
Quarterly6,500
Half-yearly12,750
Yearly25,000

What Will Happen If You Do Not Pay the Premium Even During the Grace Period?

The non-payment of the premium even during the grace period could lead to a policy lapse or make it attain the paid-up status. In case the policy has not acquired a surrender value, the non-payment would result in a lapsed policy, bringing an end to all the benefits. In case of surrender value, the policy will attain the paid-up status, resulting in reduced death and maturity benefits.

In such a case, guaranteed benefits, as specified in the policy, will multiply with the ratio of the number of premiums paid to the number of premiums payable to calculate the guaranteed benefits, including the guaranteed income under the Deferred Income Option.

Under Immediate Income Option, cash bonus payment will stop immediately till the end of the premium payment term once the policy attains a reduced paid-up status. The payment will begin after the end of the premium payment term only. However, the payment will come down by the ratio of the number of premiums paid to the number of premiums payable under the policy. You can calculate the same using the below formula

Cash bonus rate x annualized premium x (Number of premiums paid/number of premiums payable)

Note – The policy acquires a surrender value if you pay the premium of the first two years as told above.

What Will the Guaranteed Surrender Value for You?

Surrendering the HDFC Life Sanchay Par Advantage Plan will have a guaranteed surrender value in case the first two years’ premium is paid, irrespective of the premium paying term. But the question remains – how much will that be?  Well, the higher of Guaranteed Surrender Value (GSV) and Special Surrender Value (SSV) is payable to you. In addition, survival benefits, if not paid earlier, and interim survival benefit.

GSV = Max (Applicable GSV Factor x Total Premiums Paid – Survival Benefits Applicable Till Date, O)

SSV = Max (Applicable SSV Factor x Total Premiums Paid – Survival Benefits Applicable Till Date, O) + Terminal Bonus, if Declared by the insurance company

Can You Revive a Lapsed or Paid-up HDFC Life Sanchay Par Advantage Plan?

Yes, you can revive a lapsed or paid-up plan subject to fulfilling the terms and conditions specified by HDFC Life Insurance from time to time. The revival will require the payment of all the outstanding premiums along with the interest on the same, taxes and levies as may be the case. The interest rate, which currently stands at 9.5% per annum, can change from time to time. Please note that the revival can be allowed within five years of the due date of the first unpaid premium and before the completion of the policy term. All the contractual benefits of the policy will come back once you revive your policy.

Conclusion

HDFC Life Sanchay Par Advantage is an ideal insurance plan for those who are looking for wider coverage and benefits along with participation in the bonuses declared by the insurance company. This plan helps the policyholder accumulate a corpus for their family’s future. The rider options enhance its benefits and provide wider assurance and coverage. You can choose to add them as per your needs. With whole life cover, survival benefits and guaranteed income, Sanchay Par Advantage plan of HDFC Life Insurance is worth buying!

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