HDFC Click2Invest new ULIP-Should you invest?
Few days back, HDFC life has floated a new Unit Link Insurance Plan (ULIP) which indicates zero policy allocation charges and zero policy administration charges. Apart from this, HDFC Click2Invest plan can be discontinued without any charges. Investors lost interest in ULIP plans as they have been charging high allocation charges and premiums are invested after deducting them. Should you invest in HDFC Life Click2Invest ULIP plan? Is this different from other ULIP Plans? What are the positive and negative factors about HDFC Life Click2Invest Plan?
Features of HDFC Life Click2Invest ULIP Plan
- This is an online ULIP plan.
- Zero policy allocation charges
- Zero policy administration charges
- There are 8 fund options to choose in equity and debt segment.
- Premiums paid would be reinvested in the funds you would be choosing
- Single, limited and regular premium options available
- Maximum tenure is 20 years
- Premiums can be payable monthly or per annum
Also Read: Should you invest in ICICI Pru Wealth protector ULIP Plan?
Other features of HDFC Life Click2Invest Plan
What are the various fund options available to invest?
What are the benefits?
1) Death Benefit: In case of unfortunate death of insured, highest of the following would be paid
- Sum assured
- Fund value
- 105% of premiums paid
2) Maturity Benefit: An investor who is alive till the end of the policy period would get the fund value as maturity amount.
4) Income tax benefits: Life Insurance premiums paid up to Rs. 1,00,000 are allowed as a deduction from the taxable income each year under section 80C of income tax act and the maturity amounts are tax free under section 10 (10) D subject to fulfillment of terms and conditions.
Positive factors of HDFC Click2Invest ULIP plan
1) No allocation and administrative charges: Unlike other ULIP plans, this plan comes with zero premium allocation charges and zero policy administration charges. There are fund management fees charged by this insurance policy which is 1.35% of the fund value.
2) Free Switches between funds: When you invest in a fund, you may think of switching to other funds due to market conditions. This plan offers 4 free switches in a year. Beyond this, any further switch would have separate charges
3) Zero discontinuance charges: One more negative point for many ULIP schemes is they charge high penalty for discontinuance of ULIP Plan. However, this plan comes offer zero charges in case you want to discontinue this ULIP.
4) Partial withdrawals: There are partial withdrawals allowed under policy after 5 years of the policy.
Negative points of HDFC Click2-Invest Plan
1) Surrendering policy before 5 years: Like any other ULIP plan, even this policy can be surrendered only after 5 years of taking the policy. However, if you want to surrender this policy before 5 years, you can do that and fund value would be transferred to the discontinued fund portfolio and 4% annual returns would be paid till the completion of 5 years.
2) Fund Management charges: This ULIP plan charges 1.35% fund management charges. Comparing to mutual fund schemes which charge 1% to 2.5% as fund management charges is comparable. However, one should think that mutual fund schemes need more professionals to manage funds as they are intended to provide good returns. ULIP’s can provide returns of 4% to 6% returns, hence paying such fees could be still higher.
3) ULIP Still complex and not simple: Though the charges are reduced, still ULIP plan is still complicated and not simple to understand. Even an educated person need to spend a lot of time to understand how it works.
4) Don’t consider for risk cover: If you want to buy this plan for risk coverage, then you need to pay hefty premiums. E.g. for Rs 20L risk coverage, one can buy term insurance plan where premiums come at Rs 4,000 (approx) per annum. However, for this ULIP plan, you need to pay Rs 2 Lakhs (per annum) as this is risk cover + investment product.
5) No tax benefit for 55 years and above: This plan provides tax benefits for specific fund options. Any individual who wants to buy this ULIP plan after 55 years, would not get tax benefit as you can opt in specific fund options and not in all options.
Also Read: Should you surrender old ULIP Plans which has high allocation charges?
Should you invest in HDFC Life Click2Invest ULIP?
There are several positive factors like zero premium allocation charges, zero administration charges, investing online etc. However, I still feel that you should look Risk cover and wealth creation as separate aspect. Consider a term insurance plan for risk coverage. If you are a low risk investor, invest the balance amount in bank FD schemes or RD schemes. If you can take some risk, invest in equity mutual funds or hybrid/balanced mutual funds which can create good wealth in long run of 10 to 20 years. Personally, I would not like to invest in such ULIP schemes.
HDFC Click2Invest Plan brochure can be downloaded here
If you enjoyed this article, share the link in Facebook/Twitter. The links are provided below.
Suresh
HDFC Click2Invest ULIP
- Kosamattam Finance NCD – Nov-2024 Issue – Details and Review - November 24, 2024
- Best Large Cap Mutual Funds to Invest in 2025 - November 23, 2024
- How to Balance Risk and Reward in Your Investment Portfolio - November 19, 2024
Hi,
Today i brought one ULIP policy from 50K Per anum. Please let me know at the end of 5 year i will give me return at least 14-15%. I am very much worried aboout it.
If not suggest me what should i do ??
Hi..
I want to invest Rs. 24000 annually for 5 Years. How is the ICICI Pru Wealth Builder II Plan.
hi vivek,
did you taken that policy ??
Sunny
Hi I have been told by the policy bazaar people that if I invest 5000 per month for 20 years I would be getting 75L as a maturity amt. How far its true..?
Disha, If you invest Rs 5,000 per month for 20 years at 15%, you would definitely get Rs 75 Lakhs. But who is promising 15% returns? If you invest in large cap mutual funds that too good funds, you can expect between 12% to 15% annualised returns. Investing in ULIP’s would not give such huge returns. You can expect 10% to 12%. Means between Rs 38 L to Rs 50 L. Anything comes over and above it is bonus for you. Keep your expectations in this range if you would like to invest in such products. Don’t regret later.
Hello, I would like to invest monthly 2500/- on SIP. which fund do you suggest ? I am a 38 year old family man with one son
You can check this article and invets in large cap and balanced funds to start with. https://myinvestmentideas.com/2015/10/top-10-best-performing-sip-mutual-funds-to-invest-in-2016/
Just like these guys badmouth all ulips and hold brief for mfs, I think we should discard this useless bunch of people who are financila illiterates who masquerade as advisors telling all falsehood against ulips. Will they keep shut.
Ha Ha. What do you do? Why you are encouraging insurance agents who has been looting investors money by give false statements and asking them to subscribe ULIP’s. I agree that new ULIP’s are coming with lesser costs. It is investor call. They have become clever now with bloggers awareness articles. Shameful for people who are still encouring ULIP’s to become millionarie and crorepathis with investors money.
You are mis-guiding people by mentioning ulip gives returns of 4% and 6%. I had a ULIP which i bought in 2005. Young star of HDFC Life where the costing was obnoxious but today I got maturity cheque where if I calculate the IRR it is coming 16% after all the charges.
I feel if the performance of the fund is maintained than the people will get huge benefit out of these Ulip as the costing is less.
Also since there is no brokerage in this product so you people are not interested to promote the same.
But public is not fool.
Hi Pari, If you really concerned, send me scan copy of your ULIP plan + scan copy of cheque at suresh@myinvestmentideas.com. These type of comments are passed by insurance companies or agent or brokers who want to sell their products and earn 35% of commission in 1st year and 8% in subsequent years. Public knows who is fooling here and who is being fooled. Would wait for your email.
Dear Sir,
I want invest monthly Rs.1000/- for 5 year. What is best mutual fund for me. I am 27 year unmaried men. My anually income Rs.1,30,000/-
Please best invest for me?
Hi Anil,
You should invest this amount in HDFC Top 200 Growth Mutual Fund as an SIP.
After LIC I think HDFC life is doing a good work in this insurance segment. Their term plans are better plans. But as the characteristics of a ULIP plan is dull, so how HDFC life will make this Click 2 Invest a hit? Still they are trying to reduce so many charges to attract customers. May be compare to other ULIPs this is best but from Investment point of view there are other alternatives.
Dear Sir,
I am 27 year unmaried men. Looking for my first investment. My yearly saving is Rs.12000/-. What is good policy for me? I want good maturity fund after 15 year.. which is best for me “Hdfc click 2 invest or SBI PPF?????? Or other one?
Please guide me Sir…..
Anil, if you can take some risk, you can invest in mutual funds. Check this article and invest in top mutual funds. https://myinvestmentideas.com/2014/12/top-10-best-sip-mutual-funds-to-invest-in-2015/
Sir,
Your article was so good.
Iam 50 years old and i would like invest in Ulips as it comes with insurance and mf returns.
Iam thinking to invest 1lakh per annum.for 15 years.expecting minimum 50 lakhs returns after 15 years.
For me click2invest looks good as it provides sum assurance of
10 times anual premium in unfortunate death case.but,i have doubt
If i survive till the end of policy
How much can i expect minimum on my 15 lakhs investment after deducting charges?
What is mortality charges?
Or can you please suggest me good ulip plan other than fd’s and rd’s…
Hi Suresh,
Thank you for your posts on MFs, stocks and other investment ideas.
I have learnt a lot after following your blogs.
I am investing in best performing MFs suggested by you and also secured with FD/RD.
Recently, I came to know about ULIP plans invested by my father. I need your expert opinion on same.
PFB details.
1. Bajaj Capital Unit Gain Size One
Premium paid:84k (12k p.a)
fund value: 1.35k
maturity: in 2027
2.Max Life Max Amsure Secure Returns Builder ULIP – Increasing- Simplified
Premium paid: 1.20k (15k p.a)
fund value:1.39k
maturity: in 2029
Return is below average.
Plz suggest what should I do? should I surrender and invest corups in MF or FD?
or should I continue?
surrender charges is 46.99% of premium so I may suffer loss.
awaiting yr reply.
Thanks,
Kunal
You can cancel in initial years so that your future investments are safe. 1) Check with them in case you can surrender so that you can invest in future monye in MFs’ 2) Also check whether you can stop paying, but would continue to get protection, if yes, you can stop future premiums 3) If there is no option, pls continue, instead of incurring such huge losses
Hi Suresh,
Can you please suggest that is it better to take HDFC Life Super Income Plan policy .Is there any good traditional policies compare to this.Can you tel some good traditional policies …Thanks.
Hi Venkatsh, Unfortunately all wealth cum protection plans / ULIP’s come with high allocation charges and offers low returns. After long time, I could that this ULIP plan comes with less charges. Ideally I would suggest that you should take term insurance and invest money in bank fd or mutual funds
I am thinking to invest in this plan instead of RD. Thinking as below
My Plan is I want to invest 25k per month for only one year and I want to withdraw the money completely by using partial option,
let the policy continue ,and I will choose three funds Blue Chip ,Bond fund, Equity plus fund in the form 20% ,60% and 20% respectively ,I am expecting around 15 % returns on the amount invested, please suggest me whether I am correct.
Hi Mallikarjun, We generally invest to grow our money. Here in ULIP we invest for protection + money to grow. Partial withdrawl should be considered only in case of emergency. I may not be in favor of partial withdrawl option specified by you. However, like I indicated in this plan, this ULIP has less costs, hence can be considered as one of the option to grow your money.
Hello Suresh Sir,
Can you please review & write article on HDFC LIFE CLICK2PROTECT PLUS plan?
Sure Vikas
Dear Mr. Suresh,
I am Krishna Prasad from Hyd, aged about 40 Years.
I am investing in Mutual Funds as well as in Ulips.
After comparing all the parametrs, HDFC Click2Invest is the best U-Lip to start investing.
These are the calculations about Risk Coverage:
HDFC Clickek2Invest
Average Yearly Mortality Charges for 10Lakhs Sum Assuranced ( Incl. of Service Tax)
6478.81805
HDFC Click2Protect Term Policy
Sum Assured
1000000
Premium
3880
Service Tax
479.568
Total Premium/Annum
4359.568
Term
20 Years
I am strongly suggesting to invest in this policy
Something wrong. How the premium would be just Rs 4,300 for 10 Lakh ULIP policy for 20 years ? I am paying 3K for LIC term insurance plan for 10 L coverage. ULIP is where you would get your money back and 4.3K premium is wrong. Pls re-check
Hi, I am also a new guy in finanacial world, looking for ULIP plan to invest atleast 15yrs – 20yrs term, Will it be worth to invest ? Like if i invest Rs 20 – Rs 30k annually, will i get a huge return after 15yrs or 20yrs ? Still i will not be at loss right ?
Please guide me, which plan i should go for….
Regards,
Santosh
Santosh, Like I said, you can expect 4% to 6% returns in such ULIP plans. Why don’t you consider term insurance plan and invest balance in Bank FD happily ?
I heard that AVIVA I GROWTH ULIP plan is giving around 15% returns and also its better than HDFC CLICK 2 INVEST .
You have suggest us to bank fd ,which gives 8-9% returns .Can you please give review on those above 2 plans .Can you suggest whether to take those policies or not.
Venkatesh, I agree that Aviva Growth ULIP too have less charges comparing to old ULIP plans. However even mutual funds are not giving 15% returns, hence someone might be mis guiding you and promising that you would get such returns in this ULIP plan. You can expect 5% to 8% returns per annum in new ULIP plans like HDFC click2 invest of Aviva Growth ULIP etc., as ULIP charges are low for such plans.
Hi. Firstly, i am a noob in financial matters. And, i could really use your advice right now. I am 19 years old & in 2nd year of my graduation course. I wish to take an education loan to pursue master degree in abroad. Upon searching on internet, i found that i would have to show bank that i can pay the margin amount and give some collateral. Now, my dad has just applied for an LIC return policy of 2lakhs, for me, with monthly premium of around 1k. My family neither does own any property, nor has much amount in savings account. Every month my parents struggle to keep up with our expenditures, my tution fees.etc. So i decided to set up some equity funds / mutual funds with high returns, whose premium will be easier for me to pay (possibly cheap / least amount compared to others), which i can use as collateral while applying for the loan. Please, advice me where i should invest, if at all this whole scenario sounds favourable for loan sanctions. Correct me, if i am wrong at any point.
Hi Aranya, While your thoughts are good, I doublt whether this is workable strategy. Your assumptions are that you would save money and invest in high return investments and can use as collaterial security for loan or use for higher education. Investtin in financial markets is long term game. You may get money today, but you may loose tomorrow. If you invest for long term, there are lesser changes that you would loose money. Alternatively, you can try to increase your income during your few hours in a day or week which you can help your father. Refer this article and I am sure atleast 1 of them would be useful for you and you should start earning by spending few hours in a week. https://myinvestmentideas.com/2013/01/10-ways-to-earn-money-in-india-during-your-leisure-time/
Dear sir,
Hdfc click to invest and Pro growth plus… Is giving more than 39 percent is what bank says… can you please guide me whether I will get only 4to 5 per in this???? They also Said these ulips will not give return less than 15percent pls guide me Sir
Shairaj, then every one would invest in such ULIP’s by not taking risk. This is incorrect. You can expect 5% to 10% depending on expenses ratio, market growth etc. If you get higher than this, you can do party.