In the quest to make our present better, most of the times we working people forget about the important of financial security at the time of retirement. Since the amount of pension which private sector employees get is meagre, one has to think about other options to ensure financial security during the important phase of our life. One such pension plan is HDFC Life Pension Super plus Plan which will help you cover day to day expenses as well as incur emergency expenses. .
Why HDFC Pension Super Plus Plan
Many mid aged professionals of age around 35 to 40 wish to enroll into pension plans, but they have limited investible surplus to enroll. For a small amount of premium, they do not find the pension income meaningful. Considering such constraint, HDFC steps in with HDFC Pension Super Plus Plan that helps the insured to have a pension plan by paying an affordable premium amount to start with. After a few years, you are allowed to make top-up premium as per your wish so that you can plan for higher corpus at the time of your retirement. Such strategic flexibility is the key take away of HDFC Pension Super Plus Plan.
Eligibility
| Parameters | Min | Max |
| Policy Term | 10/15/20 Years | |
| Age At Entry | 35 | 65 |
| Age At Entry (Vesting) | 55 | 75 |
| Premium | Annual : 24,000
Half-Yearly : 12,000 Quarterly : 6,000 Monthly : 2,000 |
No Limit |
What Is the prescribed minimum and maximum premium amount?
Since HDFC Pension Super Plus Plan is meant to give flexibility to the individual, the requirement for minimum premium is as low as Rs. 2000 per month. However, most professionals can afford a much higher amount than the minimum threshold, to enhance their prospects of availing higher pension amount in the golden years. Hence, there is no maximum limit set for the higher amount of premium payment in HDFC Pension Super Plus Plan plan. Below table will help you to estimate the minimum payable premium.
| Premium Type and Frequency | Minimum Premium | Maximum Premium |
| Regular Premium – Monthly | Rs. 2000 |
No Limit of Maximum Premium Payment |
| Regular Premium – Quarterly | Rs. 6000 | |
| Regular Premium – Half Yearly | Rs. 12000 | |
| Regular Premium – Yearly | Rs.24000 | |
| Top Up Premium | Rs. 10000 |
- Before you can make top-up premium, your previous regular premiums must be paid in full.
- Top up premium can be paid any time throughout the policy period.
- Each top-up premium will have a lock-in period of five years.
Benefits of HDFC Pension Super Plus Plan
- HDFC Pension Super Plus Plan gives you the flexibility to choose your retirement date and plan premium payment as per your financial suitability.
- The plan gives you the assured return of the amount equivalent to 101% of the premium paid. If the fund performs better and fund value exceeds above assured benefit, you shall be paid the fund value. Hence, in any case, you are going to get a higher amount than the premium
- The unique takeaway of HDFC Pension Super Plus Plan is its higher allocation from 11th-year Such allocation helps to give you a higher return on your investment. You can have a look at the allocation table below to understand the allocation rate as a percentage of premium paid.
| Year of Premium | Allocation Rate |
| 1 to 10 | 97.5% for the Annual mode of premium
98.75% for the Non-Annual mode of premium |
| 11th Onwards | 102.5% for all mode of premium |
| Top up Premium | 99% |
What is Investment Method of HDFC Pension Super Plus Plan?
HDFC Pension Super Plus Plan allocates your money into government bonds, corporate debt instruments, money market instrument and equity with a maximum limit of 60 percent each. Based on market situation and return expectations, the fund managers change percentage allocation to arrive reasonable return with protection of the premium paid.
Because of the disciplined approach and dynamic allocation, such a pension fund is expected to generate more return than regular pension plan than the funds that only depends on the debt fund category. Therefore, you can expect better vesting benefit and hence higher pension income than a traditional pension plan. The moderate risk level of the fund can be taken care considering the long duration of the policy term, that is a minimum of ten years.
Also Check: HDFC Super Income Plan
How Can I Use My Proceeds of HDFC Pension Super Plus Plan?
Upon your survival, at the end of the policy period, you are entitled to receive vesting benefit which is equivalent to fund value and benefits of the plan, or 101% of the total premium paid, whichever is higher. Although you can utilize the policy proceeds as per your discretion, below are the most popular ways to utilize the vesting benefit for your smooth post-retirement income:
- You can utilize entire vesting benefit to purchasing an annuity from the insurance company so that your regular pension income can begin from very next month.
- You can withdraw 1/3 of the vesting benefit amount as computed value, that is tax-free withdrawal as per Section 10(10A) of Income Tax Act, 1961. You can make Fixed Deposit out of this amount, which you can utilize in case of emergency need. For the balance 2/3 of the vesting benefit amount, you can buy an annuity to generate regular pension income. This arrangement is the perfect way to strike a balance between regular income need and an emergency fund need, along with tax efficient financial
- It is quite possible that during 10-15 years of policy terms, you might have generated another stream of income and may not need monthly pension income out of policy proceeds. You might have another investment plans to utilize the vesting benefit. You can apply to withdraw policy proceeds and utilize as per your discretion.
Tax Benefits of HDFC Pension Super Plus Plan
Your HDFC Pension Super Plus Plan gives you the income tax benefit at two stages: At the time of premium payment and on vesting.
| Tax Benefit on Premium Payment | As per Income Tax Act 1961, the premium paid in the pension plan is eligible for deduction under Section 80CCC. Hence your overall tax liability decreases in the given Financial Year. |
| Tax Benefit on Policy Proceeds (Vesting) | As per Section 10(10A) of the Income Tax Act 1961, the amount equivalent to 1/3 of vesting benefit from the pension plan’s proceeded is considered as commuted value, and it is tax-free. To avail this benefit, you have to buy the annuity from balance 2/3 amount of vesting benefit. |
It may be noted that income tax benefits may alter as per prevailing government policy. Moreover, the tax benefit may vary according to the individual’s financial profile. Hence it is recommended to consult your Chartered Accountant or Financial Planner before considering the above tax benefit.
Also Check: HDFC Pension Plan
FAQs
Q1. Should I buy the policy online or offline?
There is no difference in the benefit of the policy, whether you buy the policy online or offline. However, it is extremely easy to buy the policy online; it saves your time and efforts. Moreover, the terms, conditions, and benefits are mentioned clearly on the website of the company. You can also utilize online pension calculator to know exact numbers regarding your premium payment and pension income.
In case you are not comfortable with online payment or process, you can purchase the policy by offline mode as well. All you need to do is to call helpline number of the insurance company; the tele-executive will arrange the advisor for you to complete the rest of the formalities.
Q2. Can I cancel the policy after I avail the same?
HDFC gives you “Free Look Period” of 15 days after you avail the policy. Within this period, you can review every aspect of the policy like premium payable, vesting benefit and other terms and conditions of the policy. If you have any query regarding your policy document, you can raise it to the insurance company. Even after consultation, if you are not satisfied with the resolution, you can request to cancel your policy within “Free Look Period.” The full money shall be refunded to you after deducting nominal stamp duty amount.
Q3. What is the death benefit of HDFC Pension Super Plus Plan?
Upon the unfortunate demise of the life assured, the nominee is entitled to get the total amount of all the premium paid with 6% per annum interest rate, subject to minimum payment as 105% of the premium amount paid. If the fund value is higher than above payment, the amount will be paid according to fund value. Out of every option, the highest payable amount shall be credited to the account of the nominee. The nominee has an option to buy the annuity to avail regular pension income.