HDFC Life recently launched a guaranteed income insurance plan that offers guaranteed long-term income in addition to other benefits such as life cover, tax savings, and lump sum amount on maturity.
In this policy, you stand to get a lump sum equal to the sum assured at the culmination of the policy along with the last income pay-out. Here we explain some of the benefits given to policyholders in detail.
These include the following:
First and foremost, the policy, as the name suggests, offers guaranteed income benefits. It works like this: you pay a premium for a given number of years and then you start receiving a regular income for the balance period till the end of the policy.
The premium payment term can range between 8-15 years. The policy term can also range between 16-40 years. And one can choose the rate of income payout — 11 percent, 12 percent or 13 percent per annum. And the income that is given is paid as a percentage of the sum assured chosen.
And it is vital to note that the income pay-out rate varies with the premium payment term and premium amount chosen.
Second of all, the policy gives maturity benefit i.e., sum assured when the policy matures along with the last income. Third, the policy also enables policy holder’s nominee to receive a lump sum amount in case of untimely death of the policyholder.
The death benefit will be higher of the following: ten times the annualised premium, sum assured, and 105 percent of the total premium paid.
Finally, the policyholder is entitled to receive tax benefits on premiums paid under section 80C of the Income Tax Act, 1961.
The guaranteed income plan also offers a number of additional riders to policyholders. The first one is HDFC Life Term Rider where the policyholder is entitled to receive a lump sum amount equal to the rider sum assured on death and the rider cover ceases.
The second is HDFC Life Critical Illness Rider. In this, the policyholders get a lump sum benefit if diagnosed with any of the specified critical illnesses.
Besides this, there is a third rider wherein the policyholder is given an additional lump sum amount in case of accidental death, disability or dismemberment.
(Note: This story is for informational purposes only. Please speak to a SEBI-registered investment advisor before making any investment related decision.)