Investment Plans 363 views April 15, 2020

HDFC Life Capital Shield Plan

As it is known, more than earning money-saving and investing it is harder. We work hard and earn but saving and investing this hard-earned money in the best possible avenue can prove to be quite the challenge given the multiple investment instruments; needless to mention our changing needs, circumstances and responsibilities.

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Investments can be a choice between substantially risky or safe and assured. HDFC Life Capital Shield is the solution with a blend of both the worlds. With this plan, investment-cum-insurance, an opportunity to concurrently invest and avail life cover security can be done. The allocation of your money is wisely invested, increasing systematically to debt fund over time so as to protect your capital.

Key Features of HDFC Life Capital Shield-

Some of HDFC Life Capital Shield plan’s salient features are as follows:

  1. This plan is a participating plan that protects the risks of your investment with an Assured Maturity Benefit. It also protects the policyholder for the duration of the entire policy with a life insurance cover.
  2. Premium Paying frequencies are flexible and can be chosen as per your preference before the commencement of the policy term. Moreover, Life Assured can also opt for paying premiums only once for a limited period of 5 years.
  3. After a period of 5 years added loyalty bonus is provided from the 6th year onwards. This is beneficial to boost your fund value.
  4. Capital Shield Management Strategy: wherein your premium and the net of premium allocation charges are invested and managed strategically is a unique fund management strategy curated for HDFC Life Capital Shield plan.
  5. This strategy benefits the Life Assured as it ensured the invested capital enjoys the benefits of the potential growth of equity with maximized protection against most risks.
  6. At the end of term, at maturity, you will receive the accumulated value of your fund or funds but they will be subject to a minimum Assured Benefit of 101% of the total premiums paid.
  7. The two available funds to invest under the strategy are Capital Growth Fund and Capital Secure Fund. The fund’s unit prices are subject to fluctuation as a reflection of the change in the capital market.
  8. Capital Growth Fund is an equity-oriented fund providing medium to long term capital appreciation; there is a high risk factor, however.
  9. Capital Secure Fund, on the other hand, is a debt-oriented fund that provides capital preservation as well as safety. Their risk factor is moderate to low.
  10. In a scenario of policy surrender before the 5-year term from the initiation of the policy, your fund value less discontinued charges will be transferred to ‘Discontinued Policy Fund’. The corresponding fund value referred to as the ‘Discontinued Policy Fund’ is paid out after the completion of the lock-in period.
  11. From the initiation of the policy a period of 15 days is provided from the date of receipt to return the policy in case it is not agreeable with you. If the policy has been purchased online, then 30 days are provided to return the policy while stating the reasons thereof.
  12. Tax Benefits under Section 80C and Section 10(10D) of the Income Tax Act, 1961, such as life insurance policy being exempt from tax etc. are provided and are subject to conditions specified therein.
  13. With HDFC Life Capital Shield Plan no policy loans can be availed.
  14. In case of policy revival, it should be done within two consecutive years starting from the date of discontinuance of the plan. Moreover, to do so all due and unpaid premiums must be cleared.
  15. Similarly, if the policy is discontinued before completion of 5 years, to revive the policy it is necessary to clear all due payments or it shall be chargeable with interest and to clear the discontinuance charges at the time.

Criteria for Eligibility-

The table provided below can be used to check for your eligibility to purchase the HDFC Life Capital Shield Plan. The flexibility to choose your premium amount, premium payment term, as well as the level of protection as specified in the plan, are also clarified below.

Eligibility ParametersMinimumMaximum
Entry Age 8 years 60 years
Maturity Age 18 years70 years
Policy Term (in years)10 years
Premium Payment TermSingle Limited: 5 years
Sum Assured for Limited PremiumEntry Age < 45 years10 times Annualised Premium
Entry Age between 45-54 years7 times Annualised Premium10 times Annualised Premium
Entry Age = 55 years and above7 times Annualised Premium
Sum Assured for Single PremiumEntry Age < 45 years110% of Single Premium
Entry Age = 45 or more125% of Single Premium
Premium Paying FrequencySingle PaySingle Pay- Rs. 48,000No limit specified and is subject to terms and conditions.
Limited Pay
(for 5 years)
Monthly- Rs. 4,000

Quarterly- Rs. 12,000
Half-yearly- Rs. 24,000
Annual- Rs. 48,000

HDFC Life Capital Shield Benefits-

Maturity Benefit:

This benefit is provided at the end of your policy when all risk cover ceases, at its maturity.

Maturity Benefit is only provided when all due premiums have been paid.

The Life Assured will receive the highest of the

  1. The Fund Value
  2. Assured Maturity Benefit: Maturity Benefit= 101% (subject to change) of the total premiums paid till date, less than the total partial withdrawals till date, in case any.
  3. “Total Premium”- For Single Policy is the Single Premium and for Limited Pay Policies it is 5 times the annualized premium.

Maturity benefits, however, is not applicable in case of the unfortunate demise of the life assured or if the policy is surrendered.

Death Benefit:

In times of the unfortunate demise of the Life Assured, the death benefit is provided to the benefactor.

It is done so to the benefactor as the “Sum Assured on Death” if all premiums have been duly cleared.

Death Benefit paid will be the highest of:

  1. Sum Assured, minus the amount of the Partial Withdrawals made.
  2. Fund Value
  3. 105% of the total premiums paid to date.
  4.  The deducted Partial withdrawals from the Sum Assured will be: For death, before 60 years all partial withdrawals made 2 years immediately prior to the date of death of the policyholder. And for those of 60 years and above, all partial withdrawals after the age of 58 years till the date of death will be subtracted.

After the death benefit is cleared, the policy will cease to exist.

HDFC Life Capital Shield is a Participating Unit Linked Plan that blends in the benefits of different worlds of investment—of high-level risk investments with better returns and regular, assured incomes. The invested capital in the form of premiums that you pay shall be subject to investment risks associated with capital market instruments. In addition to assured benefits of life insurance cover, it also provides fund returns, at the end of the term, whose unit prices shall be subject to fluctuations.

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