HDFC Life Pension Super Plus – Review

HDFC Life, one of India’s leading life insurance companies, has announced the launch of two pension plans. HDFC Life Pension Super Plus is a regular premium unit linked plan whereas HDFC Life Single Premium Pension Super is a single premium unit linked plan.

Both the plans offer assured benefit on death and vesting. HDFC Life Pension Super Plus offers assured death benefit of total premiums paid to date accumulated at a guaranteed rate of 6% per annum and an assured vesting benefit of 101% of total premiums paid. HDFC Life Single Premium Pension Super offers assured benefit of 101% of total premiums paid on death and vesting.

HDFC Life has also launched a traditional annuity plan, HDFC Life New Immediate Annuity Plan. As per IRDA’s new guideline, customers need to purchase immediate annuity from the proceeds of the Pension Plan from the same company. Let’s review this plan from investment point of view.

HDFC Life Pension Super Plus details:

Policy terms: 10/15/20 years

Entry age:

• Minimum is 35 years
• Maximum is 65 years

Age at vesting:

•  Minimum is 55 years
•  Maximum is 75 years

Premium details:

Frequency: Minimum

Regular Premium: Annual: Rs. 24,000, Half-Yearly: Rs 12,000, Quarterly: Rs 6,000 per quarter Monthly: Rs 2,000.

Top up Premium: Rs 10,000

Total top-up premiums paid into the policy can be up to a maximum of the total regular premiums paid till date.

• Benefit of Assured Maturity (Vesting) Value – At the end of the policy term, you will receive higher of the following
  • Fund Value or
  • Assured benefit of 101% of all premiums including top-up premiums paid till date
  • Your maturity (vesting) benefit will be used to provide you with guaranteed regular income i.e. an annuity, which you have to purchase from us.
  • Opportunity to build corpus for post retirement income – Your premium will be invested in exclusive fund which will allocate assets dynamically between equities and fixed income assets.

• Benefits on maturity (vesting) – At vesting, you have to purchase an annuity from us. You can choose from a range of annuity options. You will get guaranteed income for life for yourself and your spouse. You also have the option to commute up to 1/3rd of the benefit at vesting tax free. 

• Benefit on death – In the event of demise during the policy term, your nominee will receive the death benefit which will provide the much needed financial assistance.

Our Opinion:-

• In this plan Investment risk in your chosen investment portfolio is borne by you.
• HDFC Life’s pension products will have equity exposure of 0% to 60%, which can only be controlled by the insurance company.
• Unit price of the fund may go up or down.
• The fund does not participate in profit of HDFC standard life insurance company limited.
• On vesting Customers need to purchase immediate annuity from the proceeds of the Pension Plan from the same company.
• In this case you are still stuck with the same insurance company after vesting.
• In short, if you put money in this product you and your money is locked for lifetime, you will only get fixed rate of return every year.

Any market link plan has its own risk ultimately it is ULIP. So your money at risk, in this plan after maturity also your money is lock. In terms of cash liquidity it is very poor.

We don’t find this plan that attractive it’s better to stay away from this plan.