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Canara HSBC OBC Life Insurance Smart Monthly Income Plan
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This plan has been withdrawn by the insurance company and is no longer available for sale.
Canara HSBC OBC Life Insurance Smart Monthly Income Plan Review
Canara HSBC OBC Life Insurance Smart Monthly Income Plan is a traditional, participating Endowment Insurance Plan which also provides a series of monthly incomes during the plan tenure for easy liquidity. Life insurance cover is also provided under the plan for protection purposes.
Highlights of the Canara HSBC OBC Life Insurance Smart Monthly Income Plan
This is a traditional Endowment Plan wherein premiums are only payable for a limited period of 15 years.
The plan participates in bonus declarations and annual and final bonuses are declared under the plan.
Monthly incomes are payable for 15 years which can be used to set-off premiums payable under the plan.
High Sum Assured rebates help to lower the premium payable.
Bonus declarations enhance the benefit payable.
COMPARE THIS PLAN WITH OTHER ENDOWMENT PLANS
Working of the Canara HSBC OBC Life Insurance Smart Monthly 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.
Benefits and Features of Canara HSBC OBC Life Insurance Smart Monthly 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. This amount of monthly income can be used to set-off the premiums payable in the 11th till the 15th policy year.
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.
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Eligibility Criteria of Canara HSBC OBC Life Insurance Smart Monthly 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.2000
No limit
Premium Paying Term (PPT)
15 years
Sum Assured
100 times the monthly income
Premium payment mode
Monthly and annually
Additional Benefits of Canara HSBC OBC Life Insurance Smart Monthly 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.3 lakhs
Nil
Above Rs.3 lakhs but less than Rs.4 lakhs
Rs.3
Above Rs.4 lakhs but less than Rs.5 lakhs
Rs.4
Above Rs.5 lakhs but less than Rs.6 lakhs
Rs.5
Above Rs.6 lakhs but less than Rs.9 lakhs
Rs.6
Rs.9 lakhs and above
Rs.7
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 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 - 2000
Monthly Income - 5000
Monthly Income - 10000
30 years
20,670
49,175
96,350
40 years
21,400
51,000
100,000
50 years
23,200
55,500
109,000
Exclusions in Canara HSBC OBC Life Insurance Smart Monthly 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 Monthly 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.
