Recently, HDFC Life has launched a new online retirement plan Click 2 Retire ULIP. HDFC Click 2 Retire is a online ULIP plan that offers market linked returns with minimal charges and helps you achieve your retirement goals with advanced planning. There are several unique features in this HDFC Click 2 Retire ULIP Plan. Should you consider this plan for your retirement? What are the hidden factors in this HDFC Click 2 Retire Unit Linked Insurance Plan? Is it worth investing in such retirement plans?
Features of HDFC Life Click 2 Retire ULIP
- HDFC Click 2 Retirement plan is an online ULIP Plan.
- Offers Assured Vesting Benefit and you can get market returns.
- You can have vesting benefit at the age of 45 years.
- Policy term is 10 to 35 years.
- Premium payment term could be single pay, 8 years, 10 years or 15 years payment.
Who is eligible to take this HDFC Life Click 2 Retire Online ULIP?
Till what period premiums need to be paid?
What are various benefits available in HDFC Life Click 2 Retire ULIP?
a) Death Benefit
- In case of unfortunate demise of policy holder, nominee would get higher of the following a) Fund value or 105% of premiums paid till date
- Policy terminates from thereon.
b) Maturity / Vesting Benefit
- At the end of the policy term, maturity / vesting benefit would be higher of a) Fund value or b) Assured Vesting Benefit (AVB)
- Assured vesting benefit is computed as follows: 101% + 1%*(policy term minus premium payment term) x Total Premiums paid.
Let me explain this with an example.
Pavan aged 40 years has considered this plan for 15 years and with single pay of Rs 15 Lakhs. If we consider return at 4%, fund value would be Rs 19.8 Lakhs and with 8% return, it would be Rs 34.8 Lakhs.
Assured Vesting Benefit would be = 101% + 1%(15 Years – 1 year) x Rs 10 Lakh
This would be Rs 11,50,000.
Now higher of Rs 11.5 Lakhs or Rs 19.8 (4% return) / Rs 34.8 Lakhs (8% return) would be vesting benefit to policy holder at maturity / vesting.
How vesting benefit issue proceeds can be taken by policy holder?
- Take up to 1/3 of the benefit as tax-free cash lump sum as per the current tax regulations. The rest of the amount must be converted to an annuity at prevailing annuity rates.
- You can utilise the entire proceeds to purchase annuity at prevailing annuity rates.
- Alternatively, you can utilise the entire proceeds to purchase a single premium deferred pension plan from them.
Is it possible to defer Maturity Date / Vesting Date?
This ULIP plan allows you to defer maturity / vesting date any number of times upto your age of 75 years. However it should be communicated before you reach 55 years of age. When you postpone the maturity date, Assured Vesting Benefit and Death Benefit would continue at same level. However funds would move to pension conservative fund and all applicable charges would be deducted from thereon.
What are the ULIP charges applicable in this HDFC Life Click 2 Retire ULIP?
Below are the details of ULIP charges which is important from investors point of view.
- Zero premium allocation charges.
- Zero Policy admininistration charges
- Fund Management Charges would be 1.35% p.a.
- Zero Mortality and discontinuance charges.
- Investment guarantee charges of 0.1% to 0.5% p.a. based on fund chosen by you (among the 3 funds available).
Should you invest in HDFC Life Click 2 Retire ULIP?
There are several positive factors in this retirement plan. Such plan is offered online with minimal charges. You need to pay just 1.5% as fund management fees every year and upto 0.5% p.a. for investment guarantee charges. Such market linked plans can give you 6% to 8% approximate returns and it could be higher based on market situation. On the otherside, this is not a protection plan. It just offers 105% of premiums paid or fund value (which would be obviously very less in initial years) as death benefit. Your first priority should be taking term insurance plan. If you are low risk investor, you can consider such plans. Alternatively, you can invest in equity mutual funds which can provide you 12% to 15% annualized returns in the long run of 10 to 15 years.
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HDFC Life Click 2 Retire Online ULIP
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