HDFC Life Systematic Retirement Plan launched. Here are the key features

Why HDFC launched this plan

HDFC Life in its statement said, “With rising life expectancy and inflation in India, the need for retirement planning is significant. In addition, movements in social structures such as growth of nuclear families, migration of younger generations for jobs, education etc. The need for timely retirement planning is further deepened as retirement not only ensures additional income but also enables a person to deal with medical and financial emergencies without compromising on the money saved for his golden years. “

It said, “A retirement plan is essential to ensure financial independence as well as stability in later years. Research indicates that often retired Indians lead deprived lives as they fear draining out their life savings. Insurance products like annuities ensure a guaranteed income that helps consumers avoid this risk of longevity of life.”

HDFC Life Systematic Retirement Plan allows customers to lock in their annuity interest rates at the inception of the policy. HDFC Life Systematic Retirement Plan offers individuals a unique opportunity to systematically save for a retirement corpus over a period of time and thereafter enjoy a guaranteed lifelong income. According to HDFC Life’s press release, this plan offers the flexibility to choose between two plan options – Life Annuity and Life Annuity with Return of Premium.

Key Features of HDFC Life Systematic Retirement Plan:

– An individual has the option to choose the premium paying term of 5 to 15 years

– He/she can choose a moratorium period of up to 15 years

– Issuance of policy within 24 hours without any medical and underwriting requirements, subject to completion of all required documents and pre-conversion verification via chat. Get guaranteed income for life by paying premiums for a limited payout term. The annuity rate will be guaranteed at the time of inception and will remain unchanged for the term of the policy. Further, the amount of Guaranteed Income will depend on the premium paid subject to the applicable terms and conditions.

– Choose an annuity payment date with the “Save Date” feature to select birthdays, anniversaries and other special occasions

– Choose return of total premiums paid on death with LA-ROP option

– During the moratorium period, in case of death, the death benefit paid to the annuitant shall exceed the accumulated total premiums paid (this is equal to the total premiums received excluding any additional premiums, rider premiums and taxes) at 6% compound interest will be more. 105% of the total premiums paid till the date of death or till the date of death for both the plan options.

– In case of death, after the deferment period, no death benefit shall be payable under the life annuity option. The policy will terminate on the death of the annuitant and all other benefits will cease. For life annuities with return of premium option, the death benefit payable will be higher total premiums paid2 Total annuity payments made or paid up to the date of death accumulated at 6% per annum compound interest till the end of the moratorium period 105% of the premium till the date of death. In both the cases, on payment of the applicable death benefit, the policy will terminate and all other benefits will cease.

Eligibility for HDFC Life Systematic Retirement Plan

To opt for the scheme an individual must have a minimum age of 45 years and a maximum of 75 years, subject to annuity starting from the age of 80 years.

– Premium paying term ranges from 5 to 15 years

– The moratorium period starts from the premium paying term up to 15 years

– Annuity payments can be monthly, quarterly, half-yearly or yearly depending on the preference of the individual

Srinivasan Parthasarathy, Chief Actuary, HDFC Life, said, “Financial independence with a secure and regular stream of income in the golden years is the goal for every individual in their retirement. Hence, planning systematically for life after retirement will ensure that you continue to live worry-free.”