Canara HSBC OBC Future Smart Plan

Canara HSBC Oriental Bank of Commerce Life Insurance Future Smart Plan

Canara HSBC Oriental Bank of Commerce Life Insurance Future Smart Plan is a Unit Linked Insurance Plan (ULIP) for the benefit of a child, where the parent is the Life Insured. Thus, it is a Non-Traditional Insurance Plan without Bonus Facility.

How it works – In this plan, premium needs to be paid at least for 10 years or till the end of the Policy Tenure, as selected. There are 2 variants of this plan:

Option 1- Death Only
Option 2- Death or Total & Permanent Disability (TPD)

Thus, in this plan, under Option 2, if the Life Insured meets with a Disability, then all future premiums are paid by the company and the plan continues as scheduled. The Fund Value is paid on survival till the end of the Policy Tenure as Maturity Benefit.

However, under both Options, if the Life Insured dies within the Policy Tenure, the Sum Assured is paid as Immediate Death Benefit. Also, all future premiums are paid by the company and the plan continues as scheduled and the Fund Value is paid to the nominee on Maturity of the policy.There are some unique features like Auto-Rebalancing, Safe Switch Option and Milestone Withdrawal Option in this plan which can be utilized for the benefit of the child.

Safety Switch Option

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Auto-Rebalancing Option

Death Benefit

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Key Features

There are 2 basic Benefit options in this plan

There are 2 basic Benefit options in this plan which needs to be chosen at inception
- Death Benefit only
- Death or Total & Permanent Disability Benefit

Auto-Rebalancing Option

To maintain the chosen allocation of funds in its specific proportion, there is a unique feature called Auto-Rebalancing Option. It meansautomatically rebalances the allocation of the investments in various funds to the allocation proportions chosen once in every 3 months

Safety Switch Option

To avoid market fluctuation at the time of policy maturity, there is an option called Safety Switch Option. It means that in that last 4 years, the fund automatically switches from the chosen allocation to a low risk fund so that the market volatility does not affect the fund status.

Milestone Withdrawal Option

There is an option called Milestone Withdrawal Option, where 15% of the Fund Value is paid each year in the last 5 years of the policy

There is an option to increase or decrease the sum assured from the 6 policy year onwards.

The child is the nominee in this plan

Sample illustration of Premium in Canara HSBC Oriental Bank of Commerce Life Insurance Future Smart Plan

This is an Illustration of Healthy Male of Ages 30, 35 and 40 years with Premium = Rs. 1,00,000 opting for Sum Assured = Rs 20,00,000 with 100% in Equity II Fund and Policy and Premium Paying Term of 25 years and ECS/SI Facility selected under Option1

Thus, the Total Investment = Rs 1,00,000 X 20 years = Rs 20,00,000

Rs 2,00,000 X 20 years = Rs 40,00,000

Canara HSBC OBC Future Smart Plan Sample Returns

Benefits

Death Benefit

In case of death of the parent (Life Insured), the child (Nominee/Beneficiary) would get the Sum Assured as Immediate Death Benefit. The future premiums would be paid by the company in a lump sum and the child would also receive the Fund Value on policy maturity.

Disability Benefit

Under Option 2 selected- In case of disability of the parent (Life Insured), all future premiums would be waived off and paid by the company as and when due and the Fund Value would be paid to the policyholder on maturity of the policy tenure.

Maturity Benefit

On maturity, the Fund Value is paid to the policyholder as Maturity Benefit and the policy terminates.

Income Tax Benefit

Life Insurance premiums paid up to Rs. 1,00,000 are allowed as a deduction from the taxable income each year under section 80C. The Maturity Proceeds are also tax free under section 10(10)D under the mentioned clauses.

Riders

There are no Additional Riders available in this plan

Investment Fund Options - There are 6 Investment Funds available

India Multi-Cap Equity Fund
Equity II Fund
Growth Plus Fund
Balanced Plus Fund
Debt Plus Fund
Liquid Fund

Switching

The minimum amount that you can switch is Rs 10,000. The first 6 switches in a policy year are free post which there is a charge of Rs 250 per switch.

Partial Withdrawal

Partial withdrawals are allowed only after completion of 5 policy years or after completion of 18 years of the Life Insured. The minimum partial withdrawal is Rs 10,000 subject to at least 120% of the Annual Premium should remain in the Fund Value.

The first four partial withdrawals in any given policy year will be free of charges. Subsequent withdrawal will attract charges of Rs 250 per withdrawal.

Variants

Premium Allocation Charge – This charge is deducted from the Premium Paid by you

Policy Year	Premium Allocation Charge
1^st – ECS/SI	8.25% of Annual Premium Paid
1^st – Other Mode	8.4% of Annual Premium Paid
2^nd and 3^rd – ECS/SI	6.3% of Annual Premium Paid
2^nd and 3^rd– Other Mode	6.4% of Annual Premium Paid
4^th to 10^th– ECS/SI	5.3% of Annual Premium Paid
4^th to 10^th– Other Mode	5.4% of Annual Premium Paid
11^th onwards– ECS/SI	NIL
11^th onwards– Other Mode	NIL

Policy Administration Charge— This is the charge for the administrative working of the policy and is deducted on a monthly basis. There will be an absolute cap of Rs 500 per month on the policy administration charge.

Policy Year	Premium Allocation Charge
1^st to 5^th	0.05% of Annual Premium per month
6^th onwards	The PAC will increase by 20% every 5 years

Fund Management Charge– This charge is deducted by adjusting the NAV of the units on a daily basis.

Type	Charge
Equity II Fund Management Charge	1.35% p.a. of the Equity II Fund Value
Growth Plus Fund Management Charge	1.35% p.a. of the Growth Plus Fund Value
Balanced Plus Fund Management Charge	1.35% p.a. of the Balanced Plus Fund Value
Debt Plus Fund Management Charge	1.35% p.a. of the Debt Plus Fund Value
Liquid Fund Management Charge	0.8% p.a. of the Liquid Fund Value

Surrender Charge— This charge is for discontinuing the plan before the end of the Policy Tenure.

Year of Discontinuation	Annual Premium <= Rs 25,000 p.a.	Annual Premium > Rs 25,000 p.a.
1^st	Lower of 20% of (Annual Premium or Fund Value) subject to a maximum of Rs 3,000	Lower of 6% of (Annual Premium or Fund Value) subject to a maximum of Rs 6,000
2^nd	Lower of 15% of (Annual Premium or Fund Value) subject to a maximum of Rs 2,000	Lower of 4% of (Annual Premium or Fund Value) subject to a maximum of Rs 5,000
3^rd	Lower of 10% of (Annual Premium or Fund Value) subject to a maximum of Rs 1,500	Lower of 3% of (Annual Premium or Fund Value) subject to a maximum of Rs 4,000
4^th	Lower of 5% of (Annual Premium or Fund Value) subject to a maximum of Rs 1,000	Lower of 2% of (Annual Premium or Fund Value) subject to a maximum of Rs 2,000
5^th onwards	NIL

Mortality Charge — This charge is paid for the Life Coverage provided according to the Sum At Risk. This is based on the mortality rates which are specified for all ages and amount of cover being provided.

Service Tax would be applicable on the charges depending on the applicable rates.

Eligibility

	Minimum	Maximum
Sum Assured (in Rs.)	For ages < 45 and 10,15,20 years term SA=10 x AP and for 25 year term SA=12.5 x AP For ages 45 & above, SA=7 x AP	No Limit
Policy Term (in years)	10	25
Premium Payment Term (in years)	10	Equal to Policy Term
Entry Age of Policyholder (in years)	18	60
Entry Age of Child (in years)	0	18
Age at Maturity (in years)	-	70
Annual Premium (in Rs.)	Rs 50,000 for PT=10 Rs 25,000 for other tenures	No Limit
Payment modes	Only Yearly

FAQs

What happen if you stop paying the premium before 5 years ?

If the policy holder stops paying the premium, the insurance cover will cease and the fund value net of any discontinuance charge will be transferred to the Discontinued Policy Fund. The Discontinued Policy Fund will earn a minimum guaranteed interest rate of 3.5% p.a. and the proceeds from this will be payable after the fifth policy anniversary. In case of death of the Life Assured during this period, only the accumulated Fund Value will be payable to the nominee.

What happen if you stop paying the premium after 5 years ?

If the policy holder stops paying the premium after 5 years, then there is no Surrender/Discontinuance Charges and the Fund Value is paid to the policy holder and the policy will terminate immediately.

What happen if want to surrender the policy ?

If the policy holder wants to surrender the policy before completing 5 years, then the insurance cover will cease and the Fund Value net of any discontinuance charge, if at least 5 years’ premiums have not been paid, will be transferred to the Discontinued Policy Fund. The Discontinued Policy Fund will earn a minimum guaranteed interest rate of 3.5% p.a. and the proceeds from this will be payable after the fifth policy anniversary. In case of death of the Life Assured during this period, only the accumulated fund value will be payable to the nominee.

If the policyholder surrenders the policy after completion of 5 policy years, then there is no Surrender/Discontinuance Charges and the Fund Value is paid to the policy holder and the policy will terminate immediately.

What happen if you want a loan against your policy ?

There is no loan available under this plan.

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