HDFC Life Pension Guaranteed Plan – Review, Features and Benefits

Everyone wants to be financially independent and live there life to the fullest. Even after retirement one still wants to continue to live with the same lifestyle. If the retirement is not planned properly, then continuing the same lifestyle can be challenging as well as very difficult. A smart way to ensure a regular income stream post-retirement is by buying an Annuity plan.

HDFC Life Pension Guaranteed Plan is a single premium annuity product that provides a regular guaranteed income for life. Let us have a closer look at this policy.

Detailed review on HDFC Life Pension Guaranteed plan

Features of this policy –

  1. This policy offers a wide range of annuity options to cater to your needs.
  2. The policyholder has an option to choose a plan on a Single or Joint Life basis.
  3. The policy also has an option to receive an immediate or deferred annuity.
  4. The policyholder can receive annuity either monthly, quarterly, half-yearly or yearly.
  5. Return of Purchase Price on death as an option is available.
  6. Banks/financial institutions also has an option to purchase immediate annuities in respect of annuity payments for their commitments to the homeowners under the reverse mortgage schemes.
  7. The policyholder has a choice of increasing their Annuity Payouts through Top Up option.

Benefits of the policy –

The benefit of this policy is that, the policyholder has 3 options to choose annuity at inception. Options once selected cannot be changed at any cost. The product is available on a single life as well as a joint life basis for all options. The Primary Annuitant will be the primary person entitled to receive the payouts, while the Secondary Annuitant will be entitled to receive the annuities, if so opted, in the event of the death of the Primary Annuitant, if applicable.

In a Joint Life annuity, the secondary annuitant can be the spouse/child/parent/parent-in-law or sibling of the primary annuitant. Other relationships may be considered as long as there is an insurable interest between the annuitants.

OPTION 1

Immediate Life

Annuity

OPTION 2

Immediate Life Annuity with

Return of Purchase Price

OPTION 3

Deferred Life Annuity with

Return of Purchase Price

Let us see what these 3 options are in detail –

A) Immediate Life Annuity Option – This option is available on the basis of both single life and joint life.

*** Single Life*** 

  • As long as the policyholder (annuitant) is alive, the annuity will be payable in arrears as per the payment frequency is chosen by the policyholder.
  • On the death of the policyholder (annuitant), the annuity payments will stop and no further benefits will be payable.

*** Joint Life***

  • As long as either of the primary or the secondary policyholder (annuitant) is alive, the annuity will be payable in arrears as per payment frequency is chosen by the policyholder.
  • On the death of both policyholders (annuitants), the annuity payments will stop and no further benefits will be payable.

B) Immediate Life Annuity with Return of Purchase Price Option – This option is available on both single life and joint life basis.

*** Single Life***

  • As long as the policyholder (annuitant) is alive, the annuity will be payable in arrears as per payment frequency chosen by the policyholder.
  • If the policyholder (annuitant) dies, then the death benefit will be payable in lump sum to the nominee of the policy

*** Joint Life ***

  • As long as either of the primary or the secondary policyholder (annuitant) is alive, the annuity will be payable in arrears as per payment frequency is chosen by the policyholder.
  • If both the policyholder (annuitant) dies, then the death benefit will be payable in a lump sum to the nominee of the policy.

C) Deferred Life Annuity with Return of Purchase Price Option – This option is available on both single life and joint life basis. Deferment Period may be between 1 to 10 years (Integer values), as chosen by the policyholder at inception. The annuity rate shall be as guaranteed at the inception of the Policy.

*** Single Life ***

  •  The annuity will be payable in arrears post deferment period as per payment frequency is chosen by the policyholder as long as the policyholder is alive.
  • If the policyholder (annuitant) dies, then the nominee of the policy will receive lump sum as a death benefit.

***  Joint Life ***

  • As long as either of the primary or secondary policyholders (annuitant) is alive, the annuity will be payable in arrears post deferment period as per payment frequency is chosen by the policyholder.
  • If both the policyholder (annuitant) dies, then the death benefit payable to the nominee will be in a lump sum.

Is there any Top-Up option in this policy?

Yes, this policy offers a choice to increase your annuity payouts through top-up options. The additional annuity amount payable is based on the top-up amount and the annuity rates prevailing at the time of top-up. Age considered for annuity rate would be the age at the time of availing top-up.

Can I get any discounts?

Discounts will be offered in the form of higher annuity rates for Higher Purchase Price. Please note that all Joint Life rates are unisex. For all Single Life policies, the rates offered to a female life will be equal to a male living with a three-year setback.

Is there any maturity or death benefit in this policy?

No, there is no maturity benefit in this policy. The Death Benefit will vary depending on the annuity option chosen by the policyholder. The table below shows the Death Benefits for different annuity options. The purchase price referred below excludes applicable taxes and other statutory levies, if applicable.

Death benefit of HDFC Life Pension guaranteed plan

Is there any surrender benefit if I surrender my policy?

It is advisable that the policyholder continues the policy to enjoy the full benefits of the policy. However, there can be situations where a policyholder wants to surrender the policy. So for such unavoidable situations, the surrender benefit available under different plan options is as follows –

  1. Immediate Life Annuity Option (Single and Joint life option) – Surrender not allowed
  2. Immediate and Deferred Life Annuity with Return of Purchase Price (Single and Joint life option)
    Surrender Value shall be equal to the Present Value (PV) of expected future benefits discounted at the then-prevailing interest + 2%.

How to get annuity in 4 simple steps?

STEP 1

Choose the purchase price that you wish to pay to buy an annuity or choose the annuity amount you wish to receive.

STEP 2

Choose your annuity option.

STEP 3

Choose your annuity pay-out frequency– monthly, quarterly, half-yearly, or yearly.

STEP 4

Receive your annuity pay-outs through direct credit to your bank account.

Can I cancel the policy if I didn’t like its terms and conditions?

Yes, if the policyholder didn’t like its terms and conditions, then the policyholder can return the policy within 15 days from the date of receipt of the policy. This period is called the Free Look Period.

If the policyholder had purchased the policy through the Distance Marketing mode ( it is a mode where insurance policies are sold through telephone, internet etc apart from face to face interaction), then the free look period will be of 30 days. If this policy is purchased through proceeds from subscribers NPS funds, the proceeds from cancellation in the free-look period shall only be transferred back to the CRA from where the money was received.

Conclusion –

So by now you all know every detail about this policy. Now it’s up to you to decide that, Is this the best pension policy for you or not. Let me know your views in the comment section. If you have any questions regarding this policy then please let us know in the comment section.

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