HDFC Pension Plan – Guaranteed Pension Plan

HDFC Life Guaranteed Pension Plan

HDFC Pension Plan – Guaranteed Pension Plan

This article is based on request from Murali on "suggest a topic" option to write about retirement pension plans. HDFC life offers several pension plans. One among the HDFC Pension pan is guaranteed pension plan. This plan offers guaranteed additions, vesting additions and various other benefits. This could be considered as one of the retirement plan options. In this article, I would discuss about this HDFC life guaranteed pension plan, its features, benefits and to whom this is suitable.

Features of HDFC Life Guaranteed Pension Plan

  • Guaranteed addition of 3% of the sum assured on vesting (maturity) that gets accrued for a completed year of policy term
  • Lump sum vesting additions payable at maturity
  • Guaranteed death benefit with 6% additions of premiums paid.
  • Policy term is between 10 to 20 years

Also read: SBI Pension Plan Scheme-Annuity Plus

Who can take this policy?

  • Minimum age of entry is 35 and maximum age is 65.
  • Minimum maturity age would be 55 and maximum maturity age would be 75

What about premiums to be paid?

  • Minimum premium is Rs 24,000 per annum. You can consider quarterly, half-yearly and annual payment of premiums.
  • Premium payment terms – 5, 7 and 10 years

Benefits of HDFC Life Guaranteed Pension Plan

Guaranteed Additions: Guaranteed additions of 3% of sum assured on vesting for each completed policy year.

Vesting addition: After 10 years – 30% of sum assured and thereafter 3% of every completed policy year. By the end of 20 years, the vesting additions would be 60% (20 years x 3%)

a) Vesting Benefit: On survival at maturity, you would receive the following: 1) Sum Assured  2) Guaranteed additions 3) Vesting additions

b) Death Benefit: On the death of insured, the nominee would be paid assured death benefit of total premium paid to date accumulated at a guaranteed rate of 6% per annum compounded annually. The nominee has an option to utilize this amount to withdraw or to fully or partially purchase the annuity plan from HDFC Life.

HDFC Life Guaranteed Pension Plan Vs Aviva Next Innings Pension Plan

Last week Aviva has launched Next innings pension plan. Here are some pointers on how HDFC Guaranteed pension plan and Aviva pension plan looks

1) Death Benefit: Death benefit under both the plans offers 6% interest rates on total premiums paid.

2) Maturity benefit: On survival, HDFC Pension plan provides 3% guaranteed additions every year. After 10 years, it provides 30% returns + 3% for every additional year of completion. Means from 11th year, you can count 6% returns per annum. Before this period, you should count only 3% per annum. However under Aviva Pension plans the maturity benefit returns would be 5.45% per annum if you consider upto maturity. If you withdraw before the maturity period, you should wait upto 9 years to get your investment back without any returns. If we assume that we are waiting for 9 years to take pre-mature withdrawal, HDFC Pension plan pays 27% (9 years x 3%), Aviva next innings pension plans would provide zero percent returns. Hence HDFC Pension plan scores high in this regard.

Also read: Should you buy mutual fund pension plans

3) Entry: HDFC Pension plan helps you to take pension plans at early age of 35. However Aviva pension plan can be taken only at the age of 42.

Download the brochure of HDFC Life Guaranteed Pension plan here

Conclusion: Majority of the pension plans offers returns between 4% to 6% per annum without risk coverage and this plan scores high in terms of returns or guarantee surrender value before the maturity date. I feel HDFC Pension plan could be considered as part of your retirement options. 

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Suresh
HDFC Life Guaranteed Pension Plan

20 comments

  • vinod

    Hi

    I understand that both HDFC guranteed pension plan and HDFC personal plan are traditional plans. 

    Which do u think is the better of the 2?

    Does Personal plan give the same benefits as the other/

    Thankyou

  • pranav

    Hi

     

    I have been going thru HDFC 's Life Guarenteed pension Plan .

    Suppose I put 1 lakh everyyear much will i get at the endof 10 years as sum assured + all additions?

    Will i have a choice as to which HDFC annuity scheme I can put the final amt.

    Since its not unit linked I can be assured of the final amt cant I? It will be heart breaking if i plan and calculate that i will get so much on retirement but lose if the markets are down.

    Thankyou

    Pranav

     

     

  • Mubarak Shaik

    Hi Suresh,

    Iam Having LIC jeevan anand policy for SA-10 Lacs, tenure 16 yrs, Policy commencement date is 01-01-2008. Iam regularly paying 34420 halfyearly till now also ,now policy is in force only. I recently heard about Policy Paid up, is it really profitable if  i make my policy paid up from now, because iam paying 68840 per annum to this policy such a amount can be effectively invested in Mutual funds instead of Insurence. Suggest me whether i have to make it paid up or surrender or continue. And also to take care of my insurence i have recently taken term Insurence plan for 50Lacs for tenure of 30 yrs (HDFC click 2 protect).

    Thanks & Regards 

    Mubarak Shaik

    • Hi Shaik, Don’t terminate any LIC policy. Pls continue, but do not go for extra premiums as these policies does not offer good returns. Consider them only for insurance purpose. HDFC click2 protect plan is good one, but customer service is not that good. I experienced it personally though people have been saying it, hence I have taken ICICI I care term insurance plan 2 months back.

  • Bhanu Prasad

    Nice post , I like these money, economics stock , mutual funds!!

  • Vikas

    Hi Suresh Sir,
    Sir please write detail article on term insurance plan.

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