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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HDFC Life Guaranteed Pension Plan
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Greetings of the hour!!
Thanks for guiding many people like me!
My age is 45 & I will be retired by 58. I would like to know your opinion about SBI’s – Shubh Nivesh policy – Regular Income plan.
Kindly opine & suggest if any better option is available.
Hi Anand, This is a traditonal endowment plan. It is an investment cum protection plan. I felt returns would be lower than bank FD. If you have already taken, let me have more details on how much you paid and how much is investment value now. If not, stay away from this.
What is your opinion of Bharati Axa Dream Life Pension?
I have read good rewiews abt it.Is it worth investing?
Smitha, I have not reviewed this plan yet. If you want a detailed review, request you to post this on “Suggest a topic” so that it would be in my radar.
On going thru some insurance plans i came across birla classic life plan which they say is a whole life cover,what do they mean by that term? Even after we have got the sum assured if the person dies 10-20 years later we will get the same amt again?!!!!
Hi Sreesanth, Whole life cover refers that you would get maturity amount during retirement (60 years) and you would have insurance coverage through out the life. In case of death, nominee would get the sum assured. However not that such policies would have little higher premiums.