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Canara HSBC OBC Life Insurance Smart Future Income Plan

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Canara HSBC OBC Life Insurance Smart Future Income Plan review

Canara HSBC OBC Life Insurance Smart Future Income Plan is a traditional, participating Endowment Insurance Plan which pays monthly incomes after the completion of the Premium Paying Term till the end of the plan term.


Highlights of the Canara HSBC OBC Life Insurance Smart Future Income Plan

  • This is a traditional Endowment Plan wherein premiums are only payable for a fixed limited period of 10 years.
  • The plan participates in bonus declarations and annual and final bonuses are declared under the plan.
  • Monthly incomes accrue after the premium paying term for 15 years until the end of the plan term.
  • High Sum Assured rebates help to lower the premium payable. 
  • Bonus declarations enhance the benefit payable.


Working of the Canara HSBC OBC Life Insurance Smart Future Income Plan

  • The policyholder chooses the amount of monthly income he wishes to avail. Based on the income and age of the insured, the premium is calculated.
  • The Sum Assured under the plan is expressed as 100 times the monthly income selected. 
  • Bonuses accrue annually.
  • On death during the period, the death benefit is paid according to the benefit option selected.
  • On maturity, the maturity benefit is paid.
  • Monthly incomes accrue from the 11th policy year and continue till the end of the plan tenure.

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Benefits and Features of Canara HSBC OBC Life Insurance Smart Future Income Plan

  • Maturity Benefit – When the plan matures and the premiums have been duly paid, the vested annual bonuses and any Final Bonus is paid to the policyholder. 
  • Death Benefit – If the insured dies during plan term and the policy is in force, the death benefit payable would be the Death Benefit Sum Assured + accrued annual bonuses + Final Bonus (If any) subject to a minimum of 105% of all premiums paid till the date of death.
    The Death Benefit Sum Assured under the plan would be higher of the following:
    • Base Sum Assured
    • 10 times the annual premium paid.
  • Guaranteed Income Benefit – A monthly income is payable for 15 years starting from the end of the 121th policy month till the end of the plan tenure. 
  • Bonus – Annual bonuses are added every year of the policy being in force and depend on the performance of the company. Annual bonus is expressed as a percentage of the Sum Assured. An Interim Bonus may be added in the year of death and a Final Bonus may also be declared on maturity or death based on the company’s performance. 
  • Loan –Loans are available under the plan before the monthly incomes accrue from the 11th policy year. The minimum amount of loan is Rs.20, 000 and the maximum amount of loan available is restricted to 80% of the available Surrender Value under the plan. 
  • Tax benefit – Premiums paid under the plan would be exempt from tax under Section 80C up to a limit of Rs.1.5 lakhs. The death benefit or the maturity benefit received and the Survival benefit received would also be tax exempt under Section 10(10D) of the Income Tax Act.


Eligibility Criteria of Canara HSBC OBC Life Insurance Smart Future Income Plan

The plan can be bought only by Resident Indians. The other eligibility criteria of the plan includes:
  Minimum Maximum
Entry age (Last Birthday) 18 years 55 years
Maturity Age (Last Birthday) 43 years 80 years
Plan tenure 25 years
Premium payable Depends on age, monthly income and the mode of premium payment No limit
Monthly Income Rs.5000 No limit
Premium Paying Term (PPT) 10 years
Sum Assured 100 times the monthly income
Premium payment mode Monthly and annually



Additional Benefits of Canara HSBC OBC Life Insurance Smart Future Income Plan

  • Riders – The plan does not have any riders available.
  • High Sum Assured rebates – If the policyholder chooses a Sum Assured of Rs.3 lakhs and above, he is eligible to receive premium discounts for such high levels of Sum Assured chosen. The rate of rebate at corresponding levels of Sum Assured are as follows:
Sum Assured level Premium rebate per Rs.1000 of Sum Assured
Up to Rs.7 lakhs Nil
Above Rs.7 lakhs but less than Rs.9 lakhs Rs.1
Above Rs.9 lakhs but less than Rs.15 lakhs Rs.2
Rs.15 lakhs and above Rs.3
 
  • Grace Period – A grace period of 30 days is allowed for payment of premium after the due date. The life cover under the policy would continue during the grace period.
  • Free Look Period – A cooling off period or a free look period of 15 days (30 days for distance marketing channels) is granted to the policyholder after the policy issuance to review the policy terms and conditions. If found unsatisfactory, the plan can be cancelled within this period and the premium paid would be refunded after deducting the relevant mortality charge, service tax, cess and stamp duty paid


Premium Illustration

The following chart shows the annual premiums payable at different combinations of age and monthly income selected by a policyholder.


The premium rates are also tabulated hereunder for a quick reference:
Age Monthly Income - 5000 Monthly Income – 10,000 Monthly Income – 15,000
30 years 67,465 132,930 197,895
40 years 69,045 136,090 202,635
50 years 73,385 144,770 215,655



Exclusions in Canara HSBC OBC Life Insurance Smart Future Income Plan

  • If the insured commits suicide within a year of policy issuance, 80% of the premiums paid would be refunded and the policy would become void.
  • If suicide is committed within a year of policy revival, higher of 80% of the premiums paid till death or the Surrender Value acquired would be paid provided the policy is in force


Non-Payment of premium in Canara HSBC OBC Life Insurance Smart Future Income Plan

Premiums have to be paid for at least 3 years otherwise the policy lapses and only the early exit value would be paid. After this compulsory period, the policyholder can surrender the policy or make it paid-up.

Making the policy Paid-up

If at least3 full years’ premium has been paid, the policy would become a paid-up policy if future premiums are not paid. Bonuses would not be declared under a paid-up policy but the accrued bonuses would be payable. The facility of loan cannot be availed in a paid-up policy. The benefits payable under the plan would be reduced and called Paid-up Benefits which are calculated as follows:
  • Death Benefit – The death benefit would be reduced and calculated as follows:
    {Reduced Death Benefit Sum Assured *(number of premiums paid/total number of premiums payable)} + accrued reversionary bonuses.
  • Monthly incomes – Reduced monthly incomes would be payable which would be calculated as follows:
    Monthly income chosen * (number of premiums paid/total number of premiums payable)
  • Maturity Benefit – The annual bonuses which accrued before the policy became paid-up would be paid as maturity benefit.


Surrendering the policy

Surrender is allowed only after the policy becomes paid-up, i.e. after3 full years’ premiums have been paid. On surrendering the policy, higher of the Guaranteed Surrender Value (GSV) or the Special Surrender Value (SSV) would be paid.
  • GSV would depend on the policy year in which the plan is surrendered and is expressed as follows:
    (Total premiums paid* GSV Factor of premiums) + (Accrued Bonuses * GSV Factor of bonus)
  • The SSV factors would be declared by the company based on its performance and would be calculated as follows:
    Maturity Sum Assured * (number of premiums paid / total number of premiums payable) + Accrued bonuses

Early Exit Value 

If at least one full years’ premium has been paid and subsequent premiums are unpaid, the policyholder would be eligible to receive an early exit value. This value depends on the number of years for which the premium has been paid. The respective values are as follows:

If premiums are paid for one full year – the early exit value would be 10% of the total premiums paid

If premiums are paid for two full years - the early exit value would be 20% of the total premiums paid

This early exit value would be paid in case of death of the policyholder or on request of the policyholder or after the revival period expires. 


Revival 

Revival is allowed within 2 years from the date of the first unpaid premium. The policyholder would be required to pay the outstanding premium and any interest charged by the insurer to revive his policy.


 
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