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Canara HSBC OBC Life Insurance Smart One Pay Plan

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Canara HSBC Oriental Bank of Commerce Life Insurance Smart One Pay Plan Review

Canara HSBC OBC Life Insurance Smart One Pay Plan is a Unit Linked Plan where premiums are payable only once while the plan provides attractive market-linked returns.


Highlights of the Canara HSBC Oriental Bank of Commerce Life Insurance Smart One Pay Plan

  • This is a Single Premium Unit Linked insurance Plan which also provides life insurance protection. 
  • The plan has five funds to choose from according to the policyholder’s investment strategy.
  • Auto Fund Rebalancing and Safety Switch Options allow policyholder to safeguard his investments in times of market volatility.
  • Loyalty Additions from the 6th policy year increase the Fund Value.
 

Working of the Canara HSBC Oriental Bank of Commerce Life Insurance Smart One Pay Plan

  • The policyholder decides on the amount of single premium he wants to pay, the plan 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.
  • The Safety Switch Option is also available in the plan. The option allows the policyholder to systematically transfer his investments in the Liquid Fund in the last four years of plan maturity. This transfer protects the investment from any market volatility in the last years of the plan.
  • 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 Insurance Smart One Pay Plan

  • Maturity Benefit – On maturity, the Fund Value available on the maturity date would be paid to the policyholder. The policyholder can avail the maturity benefit in equal installments over a period of 5 years starting from the year of maturity. This feature is available under the Settlement Option feature of the plan. 
  • Death Benefit – If the insured dies when the plan is in-force, higher of the chosen Sum Assured or Fund Value as on the date of death is paid subject to a minimum death benefit of 105% of the single premium 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 from the starting of the 6th policy year and continue till the end of the plan tenure if the policy is not surrendered. The rate of such additions is 0.025% of the Fund Value per month till the end of the 10th policy year. From the starting of the 11th policy year, the rate increases to 0.06% of the Fund Value per month.
  • 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 Insurance Smart One Pay 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 70 years
Maturity Age (Last Birthday) 18 years 80 years
Plan tenure 5 years 25 years
Premium payable Rs.1 lakh No limit
Premium Paying Term Single Pay
Sum Assured 125% of the single premium paid 10 times the single premium paid
Premium payment mode Single pay



Applicable charges in Canara HSBC Oriental Bank of Commerce Life Insurance Smart One Pay 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 single premium before the premium is credited into the fund. 3% of the single premium paid is deducted as the allocation charge if the premium lies between Rs.1 lakh and Rs.5 lakhs. If the premium is Rs.5 lakhs and above, 2% of the premium would be deducted as the allocation charge. 
  • Policy Administration Charge – A monthly charge is deducted from the fund value at the start of each month from the 2nd policy year till the completion of the 5th policy year as policy administration charges. The charge is equivalent to 0.36% per annum of the Single Premium paid subject to a maximum of 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 Charge
1 Lower of 1% of single premium or Fund Value up to a maximum of Rs.6000
2 Lower of 0.50% of single premium or Fund Value up to a maximum of Rs.5000
3 Lower of 0.25% of single premium or Fund Value up to a maximum of Rs.4000
4 Lower of 0.10% of single premium or Fund Value up to a maximum of Rs.2000
5 year onwards Nil
 
  • 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 Insurance Smart One Pay 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 25% of the Fund Value is maintained after the withdrawal. 
  • Switching –Unlimited switching between the different funds is allowed provided that the minimum amount of a switch is Rs.10,000.
  • 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 – Being a single premium plan, Grace Period is not applicable. 
  • 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 Insurance Smart One Pay Plan

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


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.

 
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