Many working professionals at times lack the discipline to save regularly and invest properly for their retirement days. HDFC Personal Pension Plus Plan is the right step for such people. Pension plans help you to invest a large corpus of money in order to fetch a decent pension income.
HDFC Personal Pension Plus Plan by the HDFC Life automates your monthly savings so that you get a pension income on retirement. Once you enroll in this life insurance pension plan, your liability is only to pay a regular premium, all other processes related to the pension plan are taken care of by the insurer.
Why HDFC Personal Pension Plus Plan?
It is not possible for individuals to keep working the entire life to fulfill various needs and requirements. You will reach an age when you will not be able to work to generate income, but still would need money to continue leading the same standard of living as before. Savings accrued may get exhausted within a few years, if not planned properly. Hence, a regular pension income throughout your life gives you the support to meet your routine expenses without denting your emergency corpus.
The HDFC Personal Pension Plan is a participating non-linked policy. It means, apart from regular pension amount, the profit from the participating fund is proportionally added to your vesting benefit. This feature enables you to earn a higher amount of pension than a regular pension plan. Moreover, this plan provides you the opportunity to enter into the pension plan at the young age of 18 years or more. Hence, you can start the plan with relatively smaller amount.
Eligibility for HDFC Personal Plus Plan
| Parameter | Details |
| Entry Age | 18 years to 65 years |
| Vesting Age | 55 years to 75 years |
| Policy Term | 10 years to 40 years |
| Plan Basis | Single Life |
How to Decide Premium for HDFC Life Personal Pension Plus Plan?
The amount of premium to be paid depends on multiple factors like:
- Your present age
- Term and frequency of premium payment selected by you
- Your desired monthly pension income
- Prevailing assured annuity rate
- The benefit and plan you wish to choose
The easiest way to estimate your premium is to use online pension premium calculator on HDFC Life website. With minimum inputs like your date of birth, term and desired monthly pension income, you get estimated sum assured and premium payment for your HDFC Life Personal Pension Plus Plan. The company gives you the flexibility to decide premium payment frequency as per your convenience: monthly, quarterly, half-yearly or yearly premium payment.
Premium Limits and Fees
There are minimum premium amounts payable as per below table.
| Frequency of Payment | Minimum Installment Payable(Rs.) | Policy Fee Per Instalment (Rs.)
|
| Yearly | 24000 | 200 |
| Half-Yearly | 12000 | 110 |
| Quarterly | 6000 | 60 |
| Monthly | 2000 | 25 |
Please note that there is no upper limit on installments. You can choose the higher amount as per your current financial planning and desired pension amount in the future.
What are the Benefits and Bonuses under HDFC Personal Pension Plus Plan?
Reversionary Bonus
This bonus is declared by the insurance company every year as a percentage of your sum assured. The amount of bonus depends on the investment returns, expenses, tax, mortality etc. Hence, with this plan, you will get the sharing in the profit, which is in addition to the pension income. The applicable bonus will be added to your vesting benefits, that in turn will increase the pension income payable to you.
Interim Bonus
The reversionary bonus is only declared at the end of the financial year. It is quite possible that at the end of your policy term, vesting benefit may start before the declaration of next reversionary bonus. Hence, to give you the appropriate benefit, the company declares an interim bonus for you instead of the reversionary bonus. No reversionary bonus will be added in the year when you will receive the interim bonus.
Terminal Bonus
At the end of the policy term, if overall surplus in the fund is enough, the company may declare and add a terminal bonus to the vesting benefit. Since terminal bonus depends on the overall performance of the fund over several years, it is not guaranteed.
Vesting Benefit
When the policyholder survives the whole term of policy, they will be entitled to receive the sum assured plus accrued bonus declared every year. This amount is called as the vesting benefit. In case this sum assured is less than your premium payment, you will be paid 101% of the sum of all regular premiums paid Hence, in any case, you will receive more amount than what you have paid as a premium.
Death Benefit
On the untimely demise of the policyholder during the term, the nominee gets 101% of the total regular premiums paid plus the declared bonus, if any. In no case the nominee will get less than 105% of the total regular paid premium.
What is Vesting Age and How Should I Decide It?
The vesting age is nothing but the date from which you will start receiving pension income. You can choose any convenient vesting age within age limits mentioned in the eligibility criteria of the policy. In most cases, your vesting age should be after your regular income ceases. It will give you a seamless income flow after your salary income stops. As far as possible, your vesting age should be as late as possible to avail a higher amount of pension income at the lowest possible premium payment.
Tax Benefit Under HDFC Life Pension Plus Plan
The premium paid for this policy is eligible for tax deduction under Section 80CCC of the Income Tax Act, 1961. Hence it reduces your tax liability when you pay the premium for this policy.
As per the prevailing income tax norms, you can avail 1/3 of the vested benefit as tax-free amount if you purchase the annuity from rest of the amount. You will get regular pension income from your annuity.
FAQs
Q1. Can I surrender my policy and avail the premium amount back?
You can surrender your policy after successful payment of three installments. After 3 years, your policy is eligible for Guaranteed Surrender Value (GSV).
Q2. Can I change the nominee of my policy?
Yes, you are allowed to change the nominee any time as per your wish. You can change the same through a written application to the insurance company.
Q3. Can I cancel my insurance policy after availing the same?
After you avail your insurance policy, you are given a “Free Look Period” of 15 days, in which you can give written request to cancel the policy. The amount paid to you shall be refunded after deducting the stamp duty.
Q4. What is the right age to enroll in the pension plan?
The earlier you start, the more you get. At a young age, you can avail pension plan with minimum premium payment to get maximum pension income at the maturity. Moreover, it makes you save the money in the working age to get regular income at your retirement.
Q5. Can I buy the plan online or offline?
HDFC Life has made this plan available online. However, you have the liberty to buy the plan traditionally as well. But if you buy online, you will get a longer “Free Look Period” i.e. of 30 days, instead of regular 15 days. Moreover, online mode is convenient and saves both time and effort.
Q6. Can I avail EMI to purchase this plan?
Yes, if you are the holder of HDFC Bank credit cards, you are eligible for EMI option.
Q7. I want to avail lump-sum amount instead of pension income when I retire. Can I do so?
Yes. If you want to avail pension income, you can buy an annuity plan (you only have to inform HDFC Life, there is no complicated process to do so) and avail the pension. You can also mandate the company to credit your entire amount to your bank account. The tax efficient way is to withdraw 1/3 amount of the vesting benefit and purchase the annuity with the balance amount. In short, you will be the deciding person of what is to be done with your vesting benefits.