HDFC Life Click 2 Protect Life Plan
HDFC Life Click 2 Protect Life Plan is an interesting term insurance plan which offers a lot of flexibility in the kind of cover which one can have. The plan has 3 options which provide different kinds of benefits and features. Additionally, there are riders too which can be taken along with the base plan, to make the cover more comprehensive. The plan can be purchased online.
We will understand these benefits in detail with examples.
| Plan Name | HDFC Life Click 2 Protect Life |
| Policy Type | Term Insurance |
| UIN | 101N139V04 |
Note: As indicated by the “V03” at the end of the UIN of this plan, there have been earlier versions of this plan which will have some changes compared to this version.
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Key Features
Offers high cover amounts at affordable premiums
Option to auto balance death cover and critical illness cover
Option to get a regular income after the policy term
Option of Return of Premiums after the policy term
Option of Whole Life cover
Waiver of Premium on diagnosis of critical illness
Additional cover amount on Accidental Death Benefit through riders
Tax Benefits on Premiums paid and Death Benefit
Benefits
In case you are detected with a critical illness covered in this plan, all future premiums will be waived. You can take this only with Life Protect Option when the premium payment term is greater than 5 years. You need to pay extra premiums for this rider.
In case of death due to an accident, double the cover amount will be paid to the nominee. You can take this only with Life Protect Option. You need to pay extra premiums for this rider.
In case of Accidental Total Permanent Disability, 1% of the cover amount will be paid monthly for the next 10 years.
A benefit shall be paid in case of accidental death or partial/total disability due to an accident or in case you are detected with cancer.
You can alter the premium payment frequency at any time without paying any additional charge.
You can reduce you regular premium payment term to a limited payment term
Variants
This plan offers 3 basic options. Let us understand them in detail.
Option 1 - Life & Rebalance - In this option, your cover amount is split into 2 parts. Part 1 provides your Life Cover Benefit and Part 2 provides you a Critical Illness Benefit. At any point if you are detected with a critical illness covered in this plan, you will be paid the critical illness benefit (Part 2) component and all your future premiums will be waived - your life cover (Part 1) will continue.
This rebalancing is keeping in mind that your life cover requirements will decrease with age and the chances of critical illness increases with age.
At the beginning of the policy term, your Life Cover Benefit (Part 1) will be set at 80% of your overall cover and the balance 20% will be for the Critical Illness Benefit (Part 2). Every year, your Critical Illness Benefit will be increased and the Life Cover will get reduced. So, the overall cover amount will always be the same - the split between Critical Illness Benefit and Life Cover Benefit keeps changing every year.
The increase in Critical Illness Benefit every year = (30% x Total Cover amount / Policy Term). So Life cover will see the same decrease every year.
Example: Let us better understand this with the help of an example. Suppose, Mr. Kamath buys a 1 crore overall cover with a policy term of 10 years. The 1 crore cover consists of 2 components - Life Cover Benefit & Critical Illness Benefit. At the start of the plan the split will be as follows:
Life Cover Benefit = 80% of 1 crore = Rs. 80 lakhs
Critical Illness Benefit = 20% of 1 crore = Rs. 20 lakhs
Increase in Critical Illness Benefit in the 2nd year = 30% x 1 crore / 2 = 15 lakhs
So this is how his cover will look every year.
| Year | Part 1 Life Cover Benefit |
Part 2 Critical Illness Benefit |
|---|---|---|
| 1 | 80 lakhs | 20 lakhs |
| 2 | 65 lakhs | 35 lakhs |
| 3 | 55 lakhs | 45 lakhs |
| 4 | 47.5 lakhs | 52.5 lakhs |
| 5 | 41.5 lakhs | 58.5 lakhs |
| 6 | 36.5 lakhs | 63.5 lakhs |
| 7 | 32.2 lakhs | 67.8 lakhs |
| 8 | 28.5 lakhs | 71.5 lakhs |
| 9 | 25.1 lakhs | 74.9 lakhs |
| 10 | 22.1 lakhs | 77.9 lakhs |
I hope this clarifies how the rebalancing of the life cover benefit and critical illness benefit happens.
Note:
- In this option, you can go in for the Return of Premium at the end of the policy term
- You cannot opt for a whole life cover in this option
Option 2 - Life Protect - This option works life a normal life cover plan. In case of death of the policyholder, the nominee gets the life cover as a lumpsum amount.
Note:
- You can opt for a Fixed Term cover or a Whole Life cover
- In case you opt for Fixed Term cover, you can also opt for the Return of Premium at the end of the policy term
- The Return of Premium option is not available in case your choose the Whole Life cover option
Option 3 - Income Plus - In this option, you get a life cover for the duration of the policy term. Additionally, 0.1% of the life cover is paid as a Monthly Benefit after you attain the age of 60 years till your policy matures. You will be paid the Maturity Benefit at the end of the policy term.
Maturity Benefit = (110% of all premiums paid) - (sum of monthly income paid out).
Note:
- You can opt for a Fixed Term cover or a Whole Life cover
- The Return of Premium option is not available in this option
Example: Let us understand this plan better with the help of an example. Suppose Mr. Kamath, age 45, takes a 1 crore cover for Whole Life under this option. He chooses a limited premium payment term of 10 years.
- He pays premiums for 10 years only
- After the age of 60, he will get a monthly income of 10,000 for the rest of his life
- In case of his death after he turns 64 years. He had already received Rs. 4.8 lakhs as monthly income. So his nominee will not receive 1 crore - 4.8 lakhs = Rs. 95.2 lakhs
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This pretty much explains the working of this plan.
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