Canara HSBC Dream Smart Plan

Canara HSBC Oriental Bank of Commerce Life Insurance Dream Smart Plan

Canara HSBC Oriental Bank of Commerce Life Insurance Dream Smart Plan is a Unit Linked Insurance Plan (ULIP) with Limited Pay Option. Thus, it is a Non-Traditional Insurance Plan without Bonus Facility.

How it works – In this plan, premium needs to be paid for a minimum period of 10 years. The policy however continues for the entire period of 20 years.

At the end of the Policy Tenure, the Fund Value along with Loyalty Additions is paid to the policyholder as Maturity Benefit. There is Loyalty Additions 1% of the Fund Value added by way of additional allocation of units at the end of 15 policy years.

However, if the Life Insured dies within the Policy Tenure, the higher of the Sum Assured or the Fund Value would be paid to the nominee as the Death Benefit and the policy would be terminated.

There are 5 funds for investment in this plan.

Death Benefit

Maturity Benefit

Unit Linked Insurance

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Key Features

This is a basic Unit Linked Insurance Plan

The Fund Value is paid as Maturity Benefit

There are 5 funds for investment in this plan

In case of death of the Life Insured during the policy tenure, higher of the Sum Assured and the Fund Value is paid as the Death Benefit

There is Loyalty addition of 1% of the Fund Value at the end of 15 policy years

This policy has a large Maximum Maturity Age of 80 years

There is an option to increase or decrease the sum assured from the 6th policy year onwards subject to a maximum of 3 times during the entire policy tenure

Sample illustration of the Fund Value at the end of the Policy Term in Canara HSBC Oriental Bank of Commerce Life Insurance Dream 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 10,00,000 with 100% in Equity II Fund and a Premium Paying Term of 20 years. Thus, the Total Investment = Rs 1,00,000 X 20 years = Rs 20,00,000

Canara HSBC Dream Smart Plan Sample Returns

Benefits

Death Benefit

In the unfortunate event of the death of the Life Insured,

Before the age of 60 years, the nominee would receive the higher of
- Sum Assured less withdrawals in the preceding two years, or
- Fund value, or
- 105% of all premiums paid less withdrawals in the preceding two years
At 60 years of age or above, the nominee would receive the higher of
- Sum Assured less withdrawals after attaining 58 years of age, or
- Fund Value, or
- 105% of all premiums paid less withdrawals post attaining 58 years of age

Maturity Benefit

On surviving till the end of the Policy Tenure, the Fund Value is paid to the policyholder as Maturity Benefit and the policy is terminated.

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.

Investment Fund Options

There are 5 Investment Funds available

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	8.4% of Annual Premium Paid
2^nd and 3^rd	6.4% of Annual Premium Paid
4^th to 10^th	5.4% of Annual Premium Paid
11^th onwards	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 416.67 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
Discontinued Fund Management Charge	0.5% p.a. of the Discontinued 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, SA=10 x AP For ages 45 & above, SA=7 x AP	No Limit
Policy Term (in years)	20
Premium Payment Term (in years)	10	20
Entry Age of Life Insured (in years)	7	60
Age at Maturity (in years)	-	80
Annual Premium (in Rs.)	25,000	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 equal to the savings account rate of State Bank of India 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.

The policy can be revived as well but within a period of 2 years from the Date of Discontinuance of the Policy or before completion of the Lock-in period of 5 policy years, whichever is earlier.

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 you 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 equal to the savings account rate of State Bank of India 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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