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Canara HSBC OBC Life Smart Lifelong Plan

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Canara HSBC Oriental Bank of Commerce Life Smart Lifelong Plan Review

Canara HSBC OBC Life Insurance Smart Lifelong Plan is a unique Unit Linked Insurance Plan where coverage is provided for the entire lifetime whereas premiums can be paid for a limited tenure. Thus, the plan provides a whole life cover along with market related returns over a longer duration.


Highlights of the Canara HSBC Oriental Bank of Commerce Life Smart Lifelong Plan

  • This is a Unit Linked Plan which runs till the insured reaches 99 years of age.
  • Premiums under the plan can be paid either for a limited duration or for the entire tenure of the plan.
  • The Auto Funds Rebalancing Option under the plan ensures that the policyholder’s investment strategies remain constant. 
  • The plan has five funds to choose from according to the policyholder’s investment strategy.
  • Loyalty Additions payable under the plan help to boost the Fund Value.


Working of the Canara HSBC Oriental Bank of Commerce Life Smart Lifelong Plan

  • The policyholder decides on the amount of annual premium he wants to pay, the premium payment term, the life cover and the investment fund.
  • There are five available finds for investment which are as follows:
    • Equity II Fund
    • Growth Plus Fund
    • Balanced Plus Fund
    • Debt Plus Fund
    • Liquid Fund
  • The premium paid, net of the applicable allocation charge is invested in the above funds based on the policyholder’s investment strategy.
  • The policyholder can choose the Auto Funds Rebalancing option available under the plan. Under the option, the funds rebalance themselves in the chosen fund option after every 3 months in the proportion chosen by the policyholder.
  • If the policyholder dies during the tenure of the plan the death benefit is paid.
  • If the plan attains maturity, the maturity benefit is paid.


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Benefits and Features of Canara HSBC Oriental Bank of Commerce Life Smart Lifelong Plan

  • Maturity Benefit – On maturity, the Fund Value including the Loyalty Addition would be paid to the policyholder. 
  • Death Benefit – If the insured dies when the plan is in-force, higher of the following is paid as death benefit:
    • Sum Assured or 
    • Fund Value as on the date of death or
    • 105% of the total premiums paid till death.
      If the insured dies before attaining 60 years of age, the Sum Assured would be reduced by the amount of partial withdrawals made in the two years immediately preceding death
      If the insured dies after crossing 60 years of age, the Sum Assured would be reduced by the amount of partial withdrawals made from the Fund Value in the two years before attaining 60 years and all withdrawals made after attaining 60 years.
  • Loyalty Additions – The plan is eligible for Loyalty Additions which are added twice during the plan tenure if the due premiums have been paid. The first Loyalty Addition accrues at the end of the 10th policy year @1.25% of the average Fund Value over the last 36 months. The other addition accrues at the end of 15th policy year at the same rate, i.e. 1.25% of the average Fund Value over the last 36 months.
  • Bonus – Being a ULIP plan, bonus is not declared.
  • Loan –Loan is not available 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 would also be tax exempt under Section 10(10D) of the Income Tax Act.


Eligibility Criteria of Canara HSBC Oriental Bank of Commerce Life Smart Lifelong Plan

The plan can be bought only by Resident Indians. The other eligibility criteria of the plan includes:
  Minimum Maximum
Entry age (Last Birthday) 7 years 65 years
Maturity Age (Last Birthday) NA 99 years
Plan tenure (99 – entry age) years
Premium payable Yearly – Rs.25,000
Monthly – Rs.3000
No limit
Premium Paying Term 10 years (99 – entry age) years
Sum Assured Ages below 45 years – 0.5*(70-entry age)*annual premium
Ages 45 years and above – 7 to 10 times the annual premium
Premium Paying Mode Yearly and monthly



Applicable charges in Canara HSBC Oriental Bank of Commerce Life Smart Lifelong Plan

Being a ULIP plan, there are certain charges applicable. The charges include the following:
  • Premium Allocation Charge – This charge is deducted on receipt of the annual premium before the premium is credited into the fund. There is a discount in the charges levied if premiums are paid through ECS or SI mode. The charges are as follows:
Policy year Premium Allocation Charge Premium Allocation Charge in case of ECS or SI mode of payment
1 8.40% 7.25%
2 and 3 6.40% 5.00%
4 to 10 5.40% 5.00%
11th onwards Nil Nil
 
  • Policy Administration Charge – A monthly charge is deducted from the fund value at the start of each month every year and is expressed as a percentage of the annual premium. The charge is 0.50% per month for the first five years. This charge increases from the 6th policy year @ 20% for every five years. However, the maximum charge is limited to Rs.500 per month.
  • Fund management Charge – These charges depend on the type of fund selected and are charged on a daily basis. The applicable charges are:
Fund Type Charge
Equity II Fund 1.35% per annum
Growth Plus Fund 1.35% per annum
Balanced plus Fund 1.35% per annum
Debt Plus Fund 1.35% per annum
Liquid Fund 0.80% per annum 
Discontinued Policy Fund 0.50% per annum
 
  • Discontinuance Charge – Applicable if the plan is surrendered before the lock-in period of 5 years. The charges are:
Year of Discontinuance Premiums less than or equal to Rs.25,000 Premium above Rs.25,000
1 Lower of 20% of annual premium or Fund Value up to a maximum of Rs.3000 Lower of 6% of annual premium or Fund Value up to a maximum of Rs.6000
2 Lower of 15% of annual premium or Fund Value up to a maximum of Rs.2000 Lower of 4% of annual premium or Fund Value up to a maximum of Rs.5000
3 Lower of 10% of annual premium or Fund Value up to a maximum of Rs.1500 Lower of 3% of annual premium or Fund Value up to a maximum of Rs.4000
4 Lower of 5% of annual premium or Fund Value up to a maximum of Rs.1000 Lower of 2% of annual premium or Fund Value up to a maximum of Rs.2000
5 year onwards Nil  
 
  • Miscellaneous Charge – Any medical examination required for increasing the Sum Assured would entail a miscellaneous charge. This charge would be a maximum of Rs.3000 and the maximum limit can be increased to Rs.5000 as per IRDA’s approval.
  • Mortality charge – This charge is deducted on the first day of each month based on the Sum at Risk, the policyholder’s age and gender.


Additional Benefits of Canara HSBC Oriental Bank of Commerce Life Smart Lifelong Plan

  • Riders – There are no riders under this plan.
  • Partial Withdrawals – First four partial withdrawals are allowed free of cost in the plan after a completion of 5 policy years if the insured is above 18 years of age. Any exceeding withdrawal would attract a charge of Rs.250 per withdrawal. This charge can be increased up to a maximum of Rs.500 per withdrawals. The minimum amount of partial withdrawal is Rs.10, 000 and the maximum allowed withdrawal amount is such that the Fund Value after withdrawal should not be less than 120% of one annual premium.
  • Switching –Switching between the different funds is allowed provided that the minimum amount of a switch is Rs.10, 000. The first 6 switches in a policy year are free of cost after which a charge of Rs.250 per switch would be applicable. This charge can be increased subject to a maximum of Rs.500.
  • Premium Redirection – Future premiums can be redirected to be invested in another fund once in one policy year. Subsequent premiums would then be invested as per the revised redirected allocation. Premium Redirections can be done only from the 2nd policy year.
  • Sum Assured Alterations – The policyholder can increase or decrease the chosen Sum Assured after the completion of the first 5 years of the plan. Only one increment or decrement per policy year is allowed and a maximum of 3 alterations can be done in a chosen policy term.
  • Grace Period – A grace period of 30 days is allowed for annual, half-yearly and quarterly payment of premium and 15 days for monthly mode of premium payment.
  • Free Look Period – A cooling off period or a free look period of 15 days 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


Exclusions in Canara HSBC Oriental Bank of Commerce Life Smart Lifelong Plan

  • If the policyholder commits suicide anytime during the plan tenure, the available Fund Value would be paid to the nominee.


Non-payment of premiums in Canara HSBC Oriental Bank of Commerce Life Smart Lifelong Plan

Premiums are required to be paid for the stipulated tenure of 5 years. If the premiums are not paid the policy would lapse. The policyholder can revive the lapsed policy by paying the due premiums or surrender the policy and avail the Surrender Value


Surrendering the policy

  • Within the first 5 policy years
The policy has a 5 year lock-in period. If the policy is surrendered within the first 5 years, the funds in the Fund Value would be transferred to the Discontinued Policy Fund net of the applicable charges where it would earn a minimum interest of 4% per annum. The money would remain in the Discontinuance Policy Fund till the completion of 5 years and the Fund Management charges would be deducted as and when applicable. If the policyholder dies during this period, the Fund Value as on the date of death would be paid. Otherwise, after the completion of the lock-in period of 5 years, the available Fund Value would be paid
 
  • After 5 years
If the plan is surrendered any time after the completion of 5 years, the available Fund Value would be paid.


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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