HDFC Life Click 2 Invest Plan Review
HDFC Life Click 2 Invest Plan Summary
This is a unit linked plan which offers good potential to grow your money and offers life cover also. The highlight of this plan is the extremely low level of charges, comparable with the mutual fund industry. Being a unit linked plan, it offers good growth potential if invested over a long period of time. All these factors make it a good investment cum insurance product which offers tax savings also.
| Launch Date | Policy Type | UIN |
| 5-Sep-2017 | ULIP | 101L100V02 |
How this plan works – You decide on the amount of money you want to invest on a monthly basis (you can invest in annual, quarterly, half-yearly or single mode also). You then select the term of the policy between 5 to 20 years. You can choose a premium payment term of 5, 7, 10 or pay every year of the policy term. Based on the premium amount and your age, your life cover gets decided automatically. The money which you pay is invested in the funds of your choice – you have 8 funds to choose from. Based on the amount you invest and the choice of funds, you will be allocated Units of these funds. The value of these funds depends on the NAV which are declared on a daily basis. So you can keep track of your investment and performance from Day 1.
Key Features
Benefits
At the end of the policy term you will get the Fund Value in the policy. Just as an example, if you hold 1,000 units with an NAV of Rs. 53.26, the Fund Value will be 10,000 x 53.26 = Rs. 53,260. You have the option of withdrawing your money over a period of 5 years - details of this are mentioned under the Settlement Option which is explained below.
You can choose to take the maturity amount over a 5 year period. The units you hold at maturity will be divided by 5 and each year you will get ⅕ of the Units. The existing units will continue to be invested in your funds and the Fund Management Charge would apply. There will be no risk cover during this period. Also no switching or partial withdrawal will be allowed during this period.
In case of the death of the policyholder, the nominee will get the highest of the following:
- Fund Value
- Sum Assured
- 105% of the premiums paid
You can make a partial withdrawal or a complete withdrawal of your funds at any time after the completion of 5 policy years. You should have attained the age of 18 years though to make partial withdrawals.
At any point of time, you can pay your future premiums to buy units from other funds of your choice. You are allowed upto 4 free premium redirections in 1 policy year.
You can move your accumulated funds to another fund at any point of time. You are allowed upto 4 free switches in 1 policy year.
There are the following 2 scenarios:
- You stop paying the premiums before completion of 5 policy years - After the grace period of paying premiums gets over, the Fund Value at that time will move to the Discontinued Policy Fund. Your risk cover also ceases. Here you would earn an interest rate of a minimum 4% (this is as per the current regulations). A Fund Management Charge of 0.5% would apply and there would be no other charges. After 5 policy years, the funds will be paid to the policyholder.
- You stop paying the premiums after completion of 5 policy years - After the grace period of paying premiums gets over, you have the following options:
- Withdraw your money and close the policy
- Convert the policy to paid-up and continue with a reduced sum assured. Your investments can be withdrawn anytime later
- Revive the policy by paying the due premiums and continue with the plan. This has to be done within 2 years of date of discontinuance.
You can revive your discontinued policy by paying all the missed premiums and on meeting any applicable underwriting criteria of the company. No interest will be charged on the missed premiums.
Loan - No loans are available in this plan.
Surrender - You can surrender your plan anytime after 5 policy years and receive the Fund Value. In case surrender before 5 years, the funds will move to the Discontinued Fund and you can withdraw after 5 years.
You have a grace period of 15 days for the monthly payment mode and 30 days for other modes of premium payment.
The premiums paid are exempted from tax under Sec 80C. Please bear in mind that the annual premium should not be greater than 10% of the cover amount for this exemption to be applicable. The Maturity and Death Benefits are tax exempt under Sec 80D.
Variants
Fund Management Charge - 1.35% per annum of the Fund Value, charged daily.
Mortality Charge - This will depend on your age and the amount of cover. This charge is deducted every month.
Partial Withdrawal Charge - You can make upto 4 free partial withdrawals in every policy year. Please note partial withdrawals can only be made after 5 policy years. For every partial withdrawal after the 4 free ones, a charge of Rs. 250 will be applied. In case you make the request online by yourself, a charge of only Rs. 25 will apply.
Switching Charge - You can make upto 4 free switches in every policy year. For every switch after the 4 free ones, a charge of Rs. 250 will be applied. In case you make the request online by yourself, a charge of only Rs. 25 will apply.
Premium Re-direction Charge - You can make upto 4 free premium redirections in every policy year. For every premium redirection after the 4 free ones, a charge of Rs. 250 will be applied. In case you make the request online by yourself, a charge of only Rs. 25 will apply.
How it works
Important - The returns in your plan will depend on your choice of funds. So it is very important to choose them wisely. If you choose a Low Risk fund, the chances of returns will not be very high. If you are staying invested in 5 years or more it may make sense to go a bit aggressive on the type of fund as the chances of better returns will be higher. These funds are managed by experienced fund managers of HDFC Life.
| Fund Name | Fund Composition | Risk & Return Rating | ||
| Money Market Instruments, Cash, Deposits, Liquid Mutual Funds | Government Securities, Fixed Income Securities | Equity | ||
| Equity Plus | 0% to 20% | 0% to 20% | 80% to 100% | Very High |
| Diversified Equity | 0% to 40% | 0% to 40% | 60% to 100% | Very High |
| Blue Chip | 0% to 20% | - | 80% to 100% | Very High |
| Opportunities | 0% to 20% | - | 80% to 100% | Very High |
| Balanced | 0% to 20% | 0% to 60% | 40% to 80% | Moderate to High |
| Income | 0% to 20% | 80% to 1000% | - | Moderate |
| Bond | 0% to 60% | 40% to 100% | - | Moderate |
| Conservative | 0% to 60% | 40% to 100% | - | Low |
Eligibility
| Minimum | Maximum | |
| Age at Entry | 30 days | 65 days |
| Age at Maturity | 18 years | 75 years |
| Policy Term | 5 years | 20 years |
| Premium Payment Term | Single Limited - 5, 7 & 10 years Regular - same as policy term |
|
| Premiums | Single - Rs. 24,000 Annual - Rs. 12,000 Half yearly - Rs. 6,000 Quarterly - Rs. 3,000 Monthly - Rs. 1,000 |
No limit |
| Sum Assured - Single Premium | 125% of Premium | |
| Sum Assured - Limited & Regular Age at entry <= 55 years |
10 x Annualised premium | |
| Sum Assured - Limited & Regular Age at entry > 55 years |
7 x Annualised premium | |
FAQs
What happens when you stop paying the premiums before 5 years?If the premiums are not paid by the end of the grace period, the plan will be withdrawn and discontinued. This is what will happen:
- There will be no more risk coverage offered.
- The Fund Value on the date of discontinuance will be moved to the “Discontinued Policy Fund”.
- This fund will now earn a minimum guaranteed interest rate of 4% (as per current regulations).
- A Fund Management Charge of 0.5% per annum would be applicable.
- No other charges would be deducted.
- The Fund Value will be paid out at the end of 5 years and the policy terminates
- At any point, you can revive the policy by paying the pending premiums. You do not have to pay any interest charges on the delayed payments.
That pretty much explains how HDFC Life Click2Invest Plan works and the benefits you get out of it. If you are looking for tax savings, life cover and flexibility to manage your funds, this plan is indeed a good option to consider. If you have any questions on this plan, drop in a line in the comments and we will be happy to help out.
