Life insurance is a type of agreement between a policyholder and an insurer. It includes the insurer guaranteeing to pay a fixed amount of money in exchange for insurance premiums. The amount paid depends on the specific terms and conditions of the policy. And, the payout is typically made after the policy matures or in the event of the policyholder’s death.
Anyone who wants to financially secure their family in the event of an unforeseen circumstance can purchase a term life insurance policy. This is especially important for those who are the primary earners in their families. The life insurance policies can also be taken out for children to safeguard their future earning potential.
Why It Is Required to Buy a Life Insurance Policy?
HDFC Life’s total assets under Management cross Rs. 2.3 lakh Crore for the Financial Year 2022-23. They insured the 6.8 crore lives and honoured 99.39% of individual claims. They have a 1-Day claim settlement exclusively for policies bought online. The insurance plans provide the following benefits to your family:
- The death and disability benefits to your family to get from your life insurance policy.
- The life insurance policies can be used as loan collateral and can fetch you tax benefits under section 80 (C) of the Indian Income Tax Act. Also, the maturity proceeds are exempt under section 10 (10)(D) of the Indian Income Tax Act.
- Some life insurance plans can pay off your business’s financial liabilities in case of untimely death.
- The amount of the insurance can help with long-term life goals, children’s education marriage and unforeseen expenses.
Protection Plans
Term Insurance is a life insurance policy that offers coverage for a fixed number of years. It is low-cost life insurance as compared to other plans. If the insured individual dies when the policy is active, a death benefit will be paid to the nominees of the insured individual. The multiple plans under the term plan are as follows:
- HDFC Life Group Suraksha (Micro-Insurance Product)
- HDFC Life Group Poorna Suraksha
- HDFC Group Term Insurance
- HDFC Life Pradhan Mantri Jeevan Jyoti Bima Yojana
- HDFC Life Group Jeevan Suraksha (Micro Insurance Product)
- HDFC Life Click 2 Protect Life
- HDFC Life Click 2 Protect Super
- HDFC Life Saral Jeevan Bima
However, if the insured person survives the term of the policy, then no return value will be provided except for plans like Return of Premium, etc. Choose a term life insurance policy, for your dependents, in case of an unfortunate event.
ULIP Plans
A Unit-Linked Insurance Plan (ULIP) is a type of life insurance policy that offers the added advantage of investment opportunities. This plan allows the policyholders to invest in the various debt and equity funds to build a corpus for their future financial plans. However, the ULIP has two components; insurance and investment. These are the ULIP plans offered by the HDFC under life insurance.
- HDFC Life Assured Pension Plan
- HDFC Life Classic One
- HDFC SL Crest
- HDFC Life Capital Shield
- HDFC Life Smart Protect Plan
- HDFC Life Sampoorn Nivesh
- HDFC Life ProGrowth Plus
The amount that goes towards each component will depend on the terms of your policy. You can choose the premium payment, you want to allocate towards each component.
Savings Plans
The savings plans help you save regularly, through which you can save your family’s financial future. However, these investment plans worked with diverse features designed to align the financial objectives based on your risk tolerance. This plan is instrumental in realising various financial goals such as emergency funds, homeownership, education funding, and retirement planning. Some of the saving plans that HDFC offers are as follows:
- HDFC Life Group Variable Employee Benefit Plan
- HDFC Life Guaranteed Savings Plan
- HDFC Life Sanchay Par Advantage
- HDFC Life Pragati
- HDFC Life Sampoorn Samridhi Plus
- HDFC Life ClassicAssure Plus
- HDFC Life Super Income Plan
However, the saving plan is the added security that provides, a plan in place. This allows you to manage your money and build up funds for the future. It helps keep your money safe and secure from theft and external risks.
Annuity Plans
An annuity plan is a financial product that combines elements of both investment and life insurance. It operates differently from a traditional life insurance policy, which primarily focuses on providing a death benefit to your beneficiaries.
However, these are pension products. So, if you want to invest for your long-term retirement needs, then an annuity product can work for you. In this plan, a person pays either a Lump Sum amount or regular instalments in the given period. To get regular payments or payouts as long as he/she lives or for a pre-specified fixed period. The following are the plans offered by HDFC.
- HDFC Life Pension Guaranteed Plan
- HDFC Life New Immediate Annuity Plan
- HDFC Life Systematic Retirement Plan
- HDFC Life Saral Pension
Pension Plans
The pension plans help at the time of retirement. It provides stable post-retirement income and tax-efficiency pension plans like the NPS and Atal Pension Yojana. Enjoy the tax benefits under section 80C of the Income Tax Act of 1961.
However, some pension plans offer partial withdrawal during the accumulation phase in emergencies. To get regular payments, tax-deferred growth, investment options, or flexibility, the checkout the pension plans offered by HDFC:
- HDFC Life Group Unit Linked Pension Plan
- HDFC SL Group Traditional Plan
- HDFC Life New Group Unit Linked Plan
- HDFC Life Systematic Pension Plan
- HDFC Life Personal Pension Plus
- HDFC Life Click 2 Retire
- HDFC Life Guaranteed Pension Plan
- HDFC Life Smart Pension Plus
This pension plan provides a certain amount of money at regular intervals to ensure the flow of income during your retirement. In India, this scheme has an accumulation phase and a distribution phase. In the first phase, your premiums get invested in a fund or asset of your choice for a pre-determined period. At the time of maturity, you can choose to withdraw the proceeds and buy an immediate annuity, or receive monthly pension benefits. Choose the option as per your requirements.
Children’s Plan
The children’s plan is the best option for parents who want to ensure their child’s financial security. In case of their absence, this policy provides benefits to the child, which can be used to fund important life events such as education or weddings. The HDFC offers two such plans, they have their features:
- HDFC Life YoungStar Udaan
- HDFC SL Young Star Super Premium
The child education plans are specifically designed to secure a child’s future. These plans combine life insurance with savings, where parents pay premiums that accumulate into a maturity benefit for the child’s education. They also offer life cover, and in the unfortunate event of a parent’s demise, they provide additional benefits such as covering remaining premiums.The right investment plan can help your little one(s) to fulfill their goals and ambitions. As we care about you , we have discussed different children investment plans in another post.
Conclusion
Planning for the future is an important part of our lives, and life insurance can be a useful tool to help you achieve this. It provides a continuous source of income after you retire or in case your earnings are affected due to any unexpected accident or illness. Life insurance not only ensures your life but also helps your loved ones maintain their lifestyle after you pass away. Additionally, it can provide financial support in various other contingencies such as paying off debts, saving your business in case of an unfortunate event, and even offering tax benefits.
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