HDFC Life launches Systematic Retirement Plan – Check features

The plan offers individuals an opportunity to systematically save for a retirement corpus over a period and thereafter enjoy a guaranteed lifelong income.

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The plan offers flexibility to choose from two plan options – Life Annuity and Life Annuity with Return of Premiums.

HDFC Life has launched HDFC Life Systematic Retirement Plan – an individual, group, non-participating, non-linked, savings deferred annuity plan that will allow policyholders to systematically save for their retirement years.

With increasing life expectancy and inflation in India, the need for retirement planning is critical. Further, the movements in social structures like the growth of nuclear families, migration of younger generation for jobs, education etc. have further deeply accentuated the need for timely retirement planning because retirement not only ensures additional income but enables a person to deal with medical and financial emergencies without compromising on the money saved up for their golden years.

A retirement plan is essential to ensure stability in the later years along with financial independence. Research indicates that often retired Indians live deprived lives as they live in fear of outliving their life’s savings. Insurance products like annuities ensure a guaranteed income for life, thereby helping consumers to cover against this risk of the longevity of life.

Similarly, this new Systematic Retirement Plan will allow policyholders to lock in their annuity interest rates right at the inception of the policy. The plan offers individuals an opportunity to systematically save for a retirement corpus over a period and thereafter enjoy a guaranteed lifelong income. The plan offers flexibility to choose from two plan options – Life Annuity and Life Annuity with Return of Premiums.

Key features of HDFC Life Systematic Retirement Plan:

  • An individual has the option to choose a premium payment term of 5 to 15 years.
  • A policyholder can choose the deferment period up to 15 years.
  • Issuance of policy within 24 hours with no medicals and underwriting requirements
  • Receive guaranteed income for the whole of life by paying premiums for a limited payment term. The annuity rate will be guaranteed at inception and will remain unchanged for the duration of the policy.
  • Choose any annuity payout date with the ‘save the date’ feature to select birthdays, anniversaries and other special occasions
  • Choose Return of Total Premiums paid on death with LA-ROP option

During the deferment period, in case of death, the death benefit paid out to the annuitant shall be the higher of total premiums paid accumulated at compounding interest of 6 per cent p.a. till the date of death or 105 per cent of total premiums paid up to date of death for both plan options.

After the deferment period, in case of death, under the Life Annuity option, no death benefit shall be payable. The policy shall terminate on the death of the annuitant and all other benefits shall cease. For Life Annuity with Return of Premiums option, the death benefit payable will be the higher total premiums paid accumulated at compounding interest of 6 per cent p.a. till the end of deferment period less total annuity payouts made till date of death or 105 per cent of total premiums paid up to date of death. In both cases, upon payment of the applicable death benefit, the policy will terminate and all other benefits will cease.

Srinivasan Parthasarathy, Chief Actuary, HDFC Life says, “Financial independence with a secure and regular stream of income in the golden years is the goal for every individual for their retirement. Therefore, systematically planning for life after retirement will ensure you continue to live worry-free. HDFC Life Systematic Retirement Plan allows you to systematically save for your retirement – with the flexibility to choose the deferment period so that you can enjoy and live a comfortable lifestyle.”

Eligibility for HDFC Life Systematic Retirement Plan

  • An individual has to be a minimum of 45 years of age to opt for the plan and a maximum of 75 years of age. (subject to the annuity starting at age 80)
  • Premium payment term ranges from 5 to 15 years
  • The deferment period starts from premium payment term up to 15 years
  • Annuity payout can be monthly, quarterly, half-yearly or annually based on the individual’s choice

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