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Insurance CompaniesOctober 27, 2020

HDFC Life Insurance

Don’t be lazy, get yourself the insurance you need at just a click of a button!

India is a country with one of the youngest populations in Asia and the world (as per a Pew Research article), the median age is around 28 years that eclipses some of the established countries like Japan, South Korea and even China!

Now that we have a young, spritely population, it means that there is a large workforce of people in the country. It also means that a large chunk is millennial. Ah yes, the dreaded M-word that brings about a roll of eyes among the older generation (frankly, understandable). Now, if we were to step back and look at this generation, we must include the later Gen Z into this category too! Why? Because consumption patterns are pretty similar to those that are in the age bracket up to 38 years.

A report by Indiaspends tells us that nearly 75% of working Indians do not have Life insurance. Combine that with the fact that millennials and Gen Z make up the majority of the working population in India and it tells you that a huge portion (46% as per an Economic Times article) do not have the necessary life insurance.

Now, of course, income levels in the country are a major factor with many not earning enough to afford; hence, the focus remains on urban millennial in the workforce. Being economically optimistic, millennials tend to avoid buying insurance plans for a multitude of reasons – misconceptions, risk-averse, misplaced priorities and creating tangible investments.

There is a rolling misconception amongst the young generation that insurance is an expensive affair. This is connected to the fact that there is a lack of know-how regarding insured sums and the benefits. Many are unaware that policies can be for entire families and have tax benefits as well.

As millennials tend to be in the now, investments also move in a similar direction since, there is limited long term planning. What a surprise! If I invest now and know how much I will get in the short run is the attitude that runs deep. Understanding the effects of critical illnesses and the uncertainty of tomorrow is something that completely bypasses the distracted millennial.

With a devil-may-care attitude, the younger generation put health at the lowest in the priority pyramid. Many do not consider the fact that buying a policy as per age and marital status can help them achieve peace of mind during financial instabilities and benefit loved ones.

There is a singular focus in the types of investments – it is always in a material certainty like a house, car or retirement fund. However, unforeseen expenses such as medical care at various points in life can be needed.

Majority of financial experts believe that term insurance should be purchased the day one enters the workforce. However, it is never too late to start – HDFC offering Life & Click 2 Protect which are offering comprehensive plans to deal with Death, Disability and Disease. The best part about millennial is their ability for technological adoption and with purchasing insurance online getting easier, it becomes a matter of a few clicks of the button to get one for yourself. BimaKaro does just that! A perfect portal to see plans, compare and get the one that suits best.

HDFC Life Limited is a long-term insurance provider. Headquartered in Mumbai, it is a joint venture between Standard Life Aberdeen and HDFC. As of 31st Mar 2020 HDFC, Life holds 51.4% stake, 12.3% by Standard Life (Mauritius Holdings) and the remaining by public shareholders. With a presence throughout India, it is one of the leading financial institutions in the country.

Let’s take a look at what the offerings are for HDFC Life & Click 2 Protect Plans.

Salient features:

  1. The HDFC Life Click 2 Protect Plus is a unique insurance plan which has a plethora of features and benefits to ensure complete financial coverage for the policyholders and their nominee in a cost-effective manner.
  2. This plan can very simply be purchased online at the click of a button.
  3. You are eligible to invest in this policy from the age of 18 onwards. The maximum eligible age is 65 years. Insurance coverage is provided up to the age of 75 years.
  4. The tenure of this policy ranges from a minimum of 10 years to 40 years.
  5. Based upon the plan opted for and in consideration of age and gender, the minimum sum assured under this plan is Rs 25, 00,000 with no limitation upon the maximum Sum Assured. This is, however, dependent upon the Underwriting policy of the Company.
  6. There are various options available for the payment of premium ranging from a Single payment, Limited Payment according to which option Premium is paid for a limited number of years i.e. you pay a premium for the policy term chosen less 5 years and Regular Payment where you pay the premium through the entire policy term. You can opt to pay the premium annually, biannually, or quarterly.
  7. There are 4 different Plan options available for HDFC Click2 Protect Plus Plan:
  8. a) Life Cover option – under this option, there is a lump sum paid to the nominee upon the death of the policyholder.
  9. b) Extra Life Option – Under this option, in addition to the lump sum paid to the nominee as a Death Benefit, there is additionally an Accidental Death Benefit equal to the Sum Assured amount, paid in case the Assured dies due to a mishap.
  10. c) Income option – As per this option, the nominee will receive 10 % of the Death Benefit as a lump sum initially with the remaining 90 % payable over the next 15 years.
  11. d) Income Plus option – As per this option, the Sum Assured will be paid to the nominee as the Death benefit. Additionally, over the next 10 years, the nominee will receive a monthly income which may remain as a fixed sum or as increasing income at a rate of 10 % p.a.
  12. Cancellation of Policy – In case you change your mind regarding the terms and condition, the Policy may be returned within 15 days. In the case of online purchase of the Policy, the free look period will be for 30 days.
  13. Grace Period – Grace period of 30 days will be provided in case of delay in payment of premium for Single, Annual, Half-yearly and quarterly option. For the monthly option, however, the grace period will be for 15 days only.
  14. HDFC Protect Plus Rider – This plan comes with a Rider which can be opted for with the policy for protection against Disability / Death due to Accidents and Cancer. This can be opted for at the inception of the policy or on any subsequent policy anniversary. There are 3 options for this Rider (a) Personal Accident Cover where benefits are paid on Accidental death, Permanent or Partial Disability (b) Accidental death Cover where the benefit will be paid for death due to accident & (c) Cancer Cover wherein a lump sum is paid upon diagnosis. On a valid claim of early diagnosis, as per this particular Rider option, payable premiums will be waived for 3 years. After 3 years, the insured will need to resume payments once again. In case the outstanding term is less than three years then premiums for the outstanding term would be waived. However, for options (a) & (b), once benefits have been claimed and paid, the coverage under these options shall be terminated.

There is also the option to link these Riders with various unit-linked and non-unit linked products of HDFC.

  1. In case your policy lapses, you can revive the same within 5 years subject to terms and conditions as laid down from time to time. All pending premiums along with interest will need to be cleared before restoration of policy benefits.

Benefits of this plan:

  1. Death Benefit – In the unfortunate death of the policyholder, the benefits will be given based upon the policy chosen at inception. In case of single premium policy, the nominee will receive 125% of the single premium and the sum assured. In case of premium payments are other than Single, the nominee will receive 10 times the annualised premium and 105% of all premiums paid as on the date of death of the policyholder. The Benefit under Life option is payable in the form of a lump sum upon death, while in Extra Life Option, the Benefit shall be payable in the form of a lump sum and an additional benefit which is equal to the Sum Assured payable in case of Accidental death. Under Income option, 10% lump sum of Sum Assured and the remaining 90% is paid as monthly income over the next 15 years. Lastly under Income Plus, a lump sum to be paid initially and monthly income increasing at a simple rate of 10% p.a. or as a normal amount to be paid over the next 15 years as chosen. In case of suicide by the policyholder within 12 months of commencement of the plan, the nominee of the policyholder will be entitled to at least 80 % of the premiums paid till the date of death or the surrender value available as on the date of death whichever is higher.
  1. Life Stage Protection – HDFC Click2 Protect Plus Plan offers Life Stage Protection at an additional rate of premium. At various stages of life such as marriage, the birth of children, you can opt to increase your cover without medicals. Your premium will therefore be recalculated to accommodate this increase in cover. Similarly, once, life events have been bypassed and the added cover is not required anymore, you may opt to reduce the premium again and restore to the original Sum Assured and reduce the premium amount proportionately.
  1. Surrender Value – the policy may be surrendered and there will be a Surrender value. In the case of Single premium payment, the Surrender Value is acquired immediately after payment of premium. In the case of Limited Pay, surrender value is acquired after 2 years of payment of premium. The surrender value will be calculated as per the policy terms. To be noted however that there will be no Surrender Value for Policies under Regular premium payment.
  1. Discount for online purchase – For all policies bought online, the policyholder will get a 5.5% discount on premium, but the minimum sum assured remains the same.
  2. Tax Benefits- Avail of tax benefits under section 80C and 10 (10D) of the Income Tax Act 1961. These may change from time to time depending upon the tax laws prevalent.

Drawbacks to this plan

  1. Maturity Benefit – This plan does not carry any maturity benefit.
  2. Loans – No loans are available on this policy.
  3. Exclusions for Accident Benefit – In case the insured dies after 180 days from the date of the accident, then accident benefits will not be payable. Benefits are also not payable if the insured dies by suicide, alcohol abuse or activities of an illegal or dangerous nature.

Being in the moment is a great practice but understanding that there are uncertainties with the future is a greater practice. Prepare to enjoy the current moment to the fullest once the future is secured.

So, make the smart move to secure the future of you, your loved ones and allow them to enjoy life till the fullest. Head over to BimaKaro to get this plan and start enjoying the benefits of it.

 

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