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HDFC Life Click 2 Wealth Plan

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HDFC Life Click 2 Wealth Plan Summary

This is an interesting offering which can offer good returns for investors. It has very low charges - lower than even some mutual funds and hence can be looked at in case you wish to grow your money and save taxes along with the life insurance cover.

This plan has even lower charges than the low cost Click 2 Invest Plan which HDFC Life had launched earlier.
 
Policy Type UIN
ULIP 101L133V02

Note: There was an earlier version of this plan with UIN 101L133V01.

How this plan works - This works like any other investment plan option. You can decide on the amount of money you want to pay - it could be monthly, quarterly, half-yearly or yearly. You can also choose to pay a single premium as lumpsum. The plan has 3 Options - Invest Plus, Premium Waiver & Golden Year Benefits Option. Your age, the amount you are investing and the Option you have selected are the main factors determining the amount of cover in the plan. The money paid by you can be invested in 10 funds of your choice. The returns of your investments will depend on how your funds perform. There are additional benefits like Special Additions & Return of Mortality charges.

Steps to proceed:
  1. Decide on which of the 3 plan options you want to take
  2. Decided on the amount of investment
  3. Choose your fund option
We will understand this plan in detail with examples.

Important - In this plan, you have to stay invested for at least 5 years. You cannot withdraw your investment before 5 years.


Key features of HDFC Life Click2Wealth Policy

  • Low level of charges - only Fund Management Charge and Mortality Charges for the life cover provided are applicable
  • Return of Mortality Charges on Maturity
  • Special Additions - get 1% of Annualised premium added to your Fund Value
  • Premium Waiver Benefit in case something happens to you
  • 10 funds options to invest your money
  • Tax exemptions under Sec 80C and Sec 10(10D)
We will understand each of the above mentioned points and more in the sections below.

COMPARE THIS PLAN WITH OTHER ULIP PLANS

 Eligibility Criteria in HDFC Life Click 2 Wealth Plan

You can decide on the amount of premium which you want to pay and also select from one of the three plan options given in this chart.
 
  Invest Plus Premium Waiver Golden Years
Age at Entry 30 days to 60 years 30 days to 60 years
Proposer- 18 to 65 years
30 days to 60 years
Age at Maturity 18 to 75 years 18 to 75 years 99 years
Policy Term 10 to 40 years 99 - Age at Entry
Premium Payment Term Single & Limited - 5, 7 & 10 years
Regular - same as policy term
Limited - 5, 7 & 10 years
Regular - same as policy term
Limited - 10 to (70-Age at Entry)
Min Premium Single - Rs. 24,000
Annual - Rs. 12,000
Half yearly - Rs. 6,000
Quarterly - Rs. 3,000
Monthly - Rs. 1,000
Max Premium No limit subject to underwriting
Sum Assured Single Premium - 125% of Premium
Limited & Regular Premium - 10 x Annualised premium
TopUp - 1.25 x Topup Premium


3 Options of HDFC Life Click 2 Wealth Policy

The benefits in the plan will depend on the plan option which you choose. You have 3 options:
  1. Invest Plus Option
  2. Premium Waiver Option
  3. Golden Years Benefit Option
Understand these options well before selecting one, as it cannot be changed after you have taken the policy. Now, let us move to understanding each of these options.

Invest Plus Option - This is the most basic option and best for maximising your returns. You get a life cover and the money invested in the funds of your choice will provide the investment component. 

Maturity Benefit - 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 later in detail.

Death Benefit - In case of the death of the policyholder, the nominee will get the highest of the following:
  • Fund Value
  • Total Sum Assured less any partial withdrawals made during the 2 year period immediately preceding the date of death
  • 105% of the premiums paid
This is how the plan would work for a 35 year old who pays Rs. 50,000 annually for a policy term of 20 years and has selected the Invest Plus Option of Click 2 Wealth.
 
Annual Premium Rs. 50,000
Sum Assured Rs. 5,00,000
Policy Term 20 years
Premium Payment Term 20 years
Maturity Amount @ 8% Rs. 21,90,010
Maturity Amount @ 4% Rs. 13,88,581

The 8% & 4% per annum returns are not guaranteed and are just to give you an estimate. The returns may be higher or lower depending on how your funds perform.

Premium Waiver Option - Here the concept of Proposer and Life Assured comes into play. In case of death of the Proposer, all future premiums will be waived and will be paid by the insurance company. The policy will continue and after the death of the Proposer, the Life Assured will become the policyholder.

Let us understand this concept. You can be the Proposer and the Life Assured can be your spouse or child also. In case of your death, all future premiums will be paid by the insurance company and the investments will continue till the end of the policy term. After your death, the Life Assured will become the policy holder. 

Note: In this option, the mortality charges for both the Proposer and the Life Assured will be deducted as long as both are alive. So the overall returns would be lower compared to the Invest Plus option, if taken to maturity.

Maturity Benefit - 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 later in detail.

Death Benefit - In case of the death of the Life Assured, the nominee will get the highest of the following:
  • Fund Value
  • Total Sum Assured less any partial withdrawals made during the 2 year period immediately preceding the date of death
  • 105% of the premiums paid
This is how the plan would work for a 40 year old who pays Rs. 50,000 annually for a policy term of 20 years and has selected the Invest Plus Option of Click 2 Wealth.
 
Age of Proposer 40 years
Age of Life Assured 35 years
Annual Premium Rs. 50,000
Sum Assured Rs. 5,00,000
Policy Term 20 years
Premium Payment Term 20 years
Maturity Amount @ 8% Rs. 21,23,700
Maturity Amount @ 4% Rs. 13,43,799

The 8% & 4% per annum returns are not guaranteed and are just to give you an estimate. The returns may be higher or lower depending on how your funds perform.

You will notice that the returns in this Option is slightly less than the Invest Plus Option. That is because the mortality charges for both the Proposer and Life Assured are being deducted in this option.

Golden Years Benefit Option - This option not only helps with your retirement planning but also leaves behind something for your loved ones. The life cover will continue till the age of 99 years. Here the policy term will be till you attain the age of 99 years. You can choose a premium payment term from 10 years to the time you attain the age of 70. Post that your life cover will continue but you do not need to pay any premiums.

To generate a retirement income, you can set up a systematic withdrawal plan. You will receive money at regular intervals by way of partial withdrawals from your accumulated fund. The balance amount of your fund will be paid as Maturity Benefit in case you survive till the age of 99.

Maturity Benefit - At the end of the policy term of 99 years 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 later in detail.

Death Benefit - In case of the death of the policyholder, the nominee will get the highest of the following:
  • Fund Value
  • Total Sum Assured less any partial withdrawals made during the 2 year period immediately preceding the date of death
  • 105% of the premiums paid
This is how the plan would work for a 35 year old who pays Rs. 50,000 annually for a premium payment term of 35 years and has selected the Invest Plus Option of Click 2 Wealth. The policy term would be 64 years (99 - Age at Entry).
 
Annual Premium Rs. 50,000
Sum Assured Rs. 5,00,000
Policy Term 64 years
Premium Payment Term 35 years
Maturity Amount @ 8% Rs. 5,18,47,753
Maturity Amount @ 4% Rs. 73,84,712

The 8% & 4% per annum returns are not guaranteed and are just to give you an estimate. The returns may be higher or lower depending on how your funds perform.
  

Other Benefits in HDFC Life Click 2 Wealth Plan

Return of Mortality Charges - At the time of maturity, the basic mortality charges will be added to the Fund Value provided all premiums have been paid on time. Effectively, on surviving, the charges deducted for providing the life cover are being paid back to you. This benefit is not offered in case of surrendered, discontinued or paid-up policies. Also not applicable in the Waiver of Premium Option is triggered.

In the case of Golden Years Benefit Option, these charges are added after the policyholder attains the age of 70 years.

Special Additions - For Regular and Limited Pay Policies, 1% of the Annualized premium will be added to the Fund Value at the time of allocation of premium for the first 5 policy years. For Single Pay Policies, it is 1% of your Single premium alloted at the beginning itself.

Settlement Option - You can choose to take the maturity benefits in installments over a period of maximum 5 years. Keep in mind that, during this period the investment risk is borne by you - that means, if there is a drop in the value of your funds, you will have to bear that yourself.

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.

Grace period - You have a grace period of 15 days for the monthly payment mode and 30 days for other modes of premium payment.

Tax Benefits - 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 tax benefits on premiums and maturity to be applicable completely. The Maturity and Death Benefits are tax exempt under Sec 80D.


Charges in HDFC Life Click to Wealth Plan

This is where this plan really scores. There are no charges except the Fund Management Charge. Even the Mortality Charges are returned in case of survival till the end of the policy term. 

Fund Management Charge - 0.8% per annum for LIquid Fund, Bond Plus Fund & Secure Advantage Fund and 1.35% per annum for the rest of the 7 Funds which are available.

Mortality Charge - This will depend on your age and the amount of cover. This charge is deducted every month.

Partial Withdrawal Charge - Nil

Switching Charge - Nil

Premium Redirection Charge - Nil

Discontinuation Charge - Nil


Eligibility Criteria in HDFC Life Click 2 Wealth Plan

  Invest Plus Premium Waiver Golden Years
Age at Entry 30 days to 60 years 30 days to 60 years
Proposer- 18 to 65 years
30 days to 60 years
Age at Maturity 18 to 75 years 18 to 75 years 99 years
Policy Term 10 to 40 years 99 - Age at Entry
Premium Payment Term Single & Limited - 5, 7 & 10 years
Regular - same as policy term
Limited - 5, 7 & 10 years
Regular - same as policy term
Limited - 10 to (70-Age at Entry)
Min Premium Single - Rs. 24,000
Annual - Rs. 12,000
Half yearly - Rs. 6,000
Quarterly - Rs. 3,000
Monthly - Rs. 1,000
Max Premium No limit
Sum Assured - Single Premium 125% of Premium
Sum Assured - Limited & Regular Higher of:
10 x Annualised premium
0.5 x T x Annualised premium
T = Policy term of Invest Plus & Waiver of Premium Options; (70 - Age at Entry) for Golden Years Option
Sum Assured - Top Up Premiums 125% of Premium


Fund Options in HDFC Life Click 2 Wealth Plan

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 Instruments, Bonds
 
Equity
Diversified Equity 0% to 40% 0% to 40% 60% to 100% Very High
Blue Chip 0% to 20% - 80% to 100% Very High
Balanced 0% to 20% 0% to 60% 40% to 80% Moderate to High
Bond 0% to 60% 40% to 100% - Moderate
Discovery 0% to 10% 0% to 10% 90% to 100% Very High
Equity Advantage 0% to 20% 0% to 20% 80% to 100% Very High
Opportunities 0% to 20% - 80% to 100% Very High
Liquid 0% to 100% - - Very Low
Bond Plus 0% to 20% 30% to 100% 0% to 50% Moderate to High
Secure Advantage 0% to 40% 60% to 100% - Moderate

Apart from investing your money in any of the funds mentioned above, you can also avail the Systematic Transfer Plan (STP) - You can invest money in the Bond Fund and Liquid Fund and then transfer a fixed amount every month into any of the more aggressive funds in regular monthly instalments over a period of 12 months. This is most useful for those who are paying through the Annual mode of payment.
 

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 Click2Wealth Plan works and the benefits you get out of it. It is a very low cost plan, comparable and even better than a lot of mutual funds of the charges front. 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.
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