Pros and Cons of HDFC ULIP

by Anumeha Singh Insurance Specialist

What is a ULIP?

A ULIP refers to a unit linked insurance plan. This type of plan is a mixture of 2 types of plans. It is a combination of an insurance plan and an investment plan. In case a person takes up a ULIP plan, they will be subject to receiving the amount of sum assured by the comprehensive insurance policy as well as return on investments by the investment plan. It is, basically, a two - in - one plan which offers the plan holders double the benefits for the price of one. The premiums paid for the insurance policy are considered as the funds for the investment as well. The plan holder has the liberty to choose how much percentage of the premiums they want invested in the investment funds and how much they want to be kept as premiums.

HDFC - Housing Development Finance Corporation

HDFC Life is HDFC Standard Life Insurance Company Limited and it is a joint venture between one of India’s largest investment companies - Standard Life Aberdeen plc and one of India’s leading housing finance institutions - Housing Development Finance Corporation Limit. The company offers a lot of banking and financ ices to the public to invest into. It offers about 31 policies to be taken up by individuals as ial serve well as 10 group insurance plans among which it offers many ULIP - unit linked insurance plans as well.

HDFC is one of the best and the largest companies that provide insurance policies and plans in India. It ranks 4th in the category of market share which is a good 4.7 % (2015 - 16 financial year). The company was founded and established in the year 2000. HDFC Life is an insurance plan and policy provider which gives a wide range of insurance policies that the potential plan holders can choose from. The sectors in which HDFC operates and provides insurance policies are retirement, travel, health, life, child plans and a lot of other sectors to choose from and get good insurance policy covers and return on investments on.

HDFC ULIP Plans

Pros & Cons

HDFC Life Pension Super Plus

The HDFC Life Pension Super Plus ULIP plan is one of the HDFC ULIP plans and is a type of pension or retirement plan. To be able to enter, the potential plan holder has to be a minimum of 35 years of age and cannot be more than 65 years. The minimum age for vesting the policy is 55 years and the maximum age of vesting the ULIP plan cannot be after 75 years of age.

Pros:

On the death of the insured, a death benefit is paid to their nominee which is the higher value of the following two: 105 % of all the premiums paid or the sum total of 6 % of the premiums paid per annum.
After 10 years of the plan have been completed in the tenure of the policy, an amount percentage of 102.5 % is allocated to the fund value.

HDFC Life Click 2 Invest

The HDFC Life Click 2 Invest is one of the best HDFC ULIP plans and is a type of Savings and Investments plan which provides a lot of benefits. The minimum maturity age of this plan is 18 years and the maximum maturity age is 75 years. The sum assured that this plan will give out is the value of 1.25 times the Single Premium or 10 / 7 times the premium per annum.

Pros:

This plan provides the nominees or the family with a death benefit in case of the unfortunate death of the plan holder. The amount of this benefit will be the amount which has a higher value out of the following two amounts: 105% of the entire amount of premiums that were paid by the insured until the demise of the policy bearer or the value of the fund of the plan holder.
There are 8 types of this fund available to choose from.
This plan allows tax benefits under Section 80 C and Section 10 (10 D) of the Income Tax Act.

Cons:

The term of the plan can only range any number of years between 5 years to 20 years which is a really short duration and would not let the money grow to their full potential in the funds.

HDFC SL Crest

The HDFC SL Crest unit linked insurance plan is a type of limited premium paying plan. The minimum age that you have to be to enter this plan is 14 years and you cannot be over the age of 55 years if you want to take up this HDFC ULIP plan. There are 4 fund options under this plan.

Pros:

This HDFC ULIP plan offers two types of death benefits for different age brackets. In case of the death occurs before the age of 60 years, the higher amount of either the sum assured net of partial withdrawals made 2 years before the death or the fund value will be paid. In case the death occurs after the age of 60 years, the higher amount of either the sum assured net of partial withdrawals made after age 58 years or the fund value which is 105 % of the entire premium or is paid.
This plan also gives the plan holder tax exemptions which are allowed under Section 10 (10 D) or the Section 80 C of the Income Tax Act.

Cons:

The term of this plan is 10 years. There is only one option that eliminates a good feature of flexibility from this plan. The plan holder has to put up with the 10 year term as it is the only option available.

Now that you know what these HDFC ULIP plans have to offer, you can easily make the decision after considering each one and relating them with your requirements and preferences. Invest into HDFC ULIPs to get good covers and returns.