Canara HSBC OBC Life Smart Goals Plan

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Introduction/Overview

The Canara HSBC OBC Life Smart Goals Plan is a Unit Linked Insurance Plan with a two options for life cover. It is a non-traditional insurance plan that does not have bonus facility. This plan enables policyholders to plan and prepare for future goals and future financial and requirements, while providing protection for their loved ones in the unfortunate event of their premature demise.

Key Features

  • The policyholder has a choice of two options for life cover.
  • The policyholder has a choice of five different unit linked funds in which to allocate their investments.
  • The policyholder can manage their investment portfolio through features such as premium redirection, switching between funds, Auto Rebalancing Option and Safety Switch Options.

Benefits

  • On survival until the end of the policy, the policyholder will receive a Maturity Benefit that is the Fund Value as on the date of maturity.
  • In the unfortunate event of the demise of the policyholder, the nominee receives a Death Benefit.  The Death Benefit payable is the higher of:
  1. The Fund Value.
  2. The Sum Assured minus any partial withdrawals, or
  • Based on the customer’s risk appetite, there is a choice of five Unit Linked Funds for investment.
  • Loyalty Additions are made from the fifth policy year onwards.
  • Liquidity is available in the form of partial withdrawals, which are allowed from the sixth policy year onward. The minimum amount for partial withdrawals is Rs. 10000.
  • The policy offers features such as the Auto Rebalancing option and the Safety Switch option to help the policyholders manage their investment portfolios.
  1. The Auto Rebalancing option maintains the allocation of investments across all funds in a specific proportion throughout the policy term. It is opted for at the inception of the policy. Every three-policy months, the policy automatically rebalances the allocation of the investments in various funds to the allocation proportions that were chosen by the policyholder.
  2. Safety Switch Option allows policyholders to move their investments in a systematic manner to a low-risk Liquid Fund in the last four policy years in order to avoid market volatility and movement and to safeguard the funds.
  • Tax benefits are available on the premium paid and Death Benefit as per sections 80(C) and 10 (10D) of the Income Tax Act.

Product Specification:

 

Minimum

Maximum

Entry Age of the Life Assured (Last Birthday)

8 years

64 years

Maturity Age (Last Birthday) of the Life Assured

Option 1: 18 years

Option 2:  23 years

Option 1: 74 years

Option 2: 79 years

Policy Term (PT) in years

Option 1:  10 years Fixed

Option 2: 15 years

Option 2: 25 years

Premium Paying Term (PPT) in years

Option 1:  Fixed 5 years

Option 2:  1o to 25 years

Premium Paying Frequency

Monthly

Annual

Single Premium

Rs. 300000

No limit

Sum Assured

Option 1 :

Age less than 45 = 10 X Annual Premium

Age more than 45 to  60 years = 7 X Single Premium

Option 2 :

Age less than 45 = Higher of (0.5 X Policy Term X Annual Premium) or 10 X Annual Premium

Age more than 45 = 7 X Single Premium

No limit

Details About Premium

Benefit illustration for 40 year old male. Option 2 life cover chosen. Sum Assured = 10 X Annual Premium. Policy Term of 10 years

Annual Premium (Rs.)

Sum Assured (Rs.)

Fund Value at the end of 20 years assuming Gross Investment Return of

4%

8%

30000

300000

403830

736634

75000

750000

1009575

1841545

100000

1000000

1346100

2455447

250000

2500000

3365250

6138618

500000

5000000

6730501

12277236

Policy Details

Grace Period: The policy gives policyholders thirty days to pay all due premiums. The policy will acquire a “Discontinued” status if payment is not made within the applicable timeframe.

Policy Termination or Surrender Benefit: If the policy is surrendered before the completion of 5 years, then the insurance cover ceases, and the Fund Value will be transferred to the Discontinued Policy Fund. Proceeds from this will be payable only after the fifth policy anniversary. In case of the death of the Life Assured during this period, only the accumulated fund value will be payable to the nominee. After completing five policy years, if it is surrendered, then there is no Surrender/Discontinuance Charges, the Fund Value is paid to the policyholder, and the policy will terminate immediately. If the policy is not reinstated within the revival period, the policy is terminated. Termination of the policy also occurs on payment of the Death Benefit. The policy will also automatically terminate if at any time the Fund Value falls below or become equal to one year’s regular premium because of poor market performance. In that case, the Fund Value is paid to the policyholder.

Free Look Period: Policyholders have a limited free look period of 15 days from the date of receiving policy documents to review the policy. If the policyholder does not wish to continue with the policy, then he or she can cancel the policy. The customer will receive the Fund Value plus the unallocated premium minus a proportionate premium for the risk borne by the company, including as any extra expenses, such as towards a medical examination or stamp duty charges.

Inclusions

  • The policyholder may increase or decrease the Sum Assured as per their changing life coverage. This change can be done from the sixth policy year onwards.
  • The policy allows policyholders to receive the Maturity Benefit in installments via the Settlement Option. The installments will be received over a maximum period of five years, via monthly, quarterly, half-yearly or yearly modes.
  • Policyholders may opt to change the allocation of future premiums with the Premium Redirection facility.
  • The policyholder may switch between the unit-linked funds at any point of time during the policy term. The minimum amount that can be switched is Rs. 10000.

Additional Features or Riders

  • The revival of a lapsed or discontinued policy is possible if the policyholder submits a request for reinstatement within a timeframe of two years from the date of the first unpaid premium and pays all due premium.
  • Various charges apply to this policy. They are as follows:
  1. Premium Allocation Charge, which is deducted from the Premium paid by the customer. The balance is invested in the investments chosen by the policyholder
  2. Policy Administration Charge is deducted at the start of each month.
  3. Fund Management Charges are deducted daily while calculating the NAV of the funds.
  4. At the beginning of each month, Mortality Charges are deducted by the cancellation of units from the fund value.
  5. Switching Charge – The first six switches in a policy year are free. There is a charge of Rs. 250 for switching between funds.
  6. Partial Withdrawal Charge – The first four partial withdrawals are free, while subsequent withdrawals are charged at Rs. 250 per withdrawal.
  7. Miscellaneous Charge is there for medical examination expenses in case of an increase in the Sum Assured.
  8. A Discountenance Charge is levied on policies that are discontinued before the end of the lock-in period of the first five years.

Exclusions

  • The term insurance cover is void if the person insured, whether sane or insane at the time, commits suicide within one year from the start of the policy cover. The company will refund the Fund Value as on the date of death.

Documents Required

The policyholder has to fill up an ‘Application form ’with identity proof, bank account proof, address proof and a recent photograph. Select cases may require income proof and medical examination.