HDFC Click to Protect Plus

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HDFC Click to Protect - Overview

HDFC Life Click 2 Protect Plus is an online term plan with unique benefit structure to provide a tension-free future at very low costs

 Key Features

  • Click To Protect Plus is a pure HDFC term insurance plan with Regular, Limited and Single pay premium paying options
  • There are 4 cover options to choose from in the HDFC Click To Protect Plus plan:
    1. Life Option
    2. Extra Life Option
    3. Income Option
    4. Income Plus Option 

Benefits

  • Under HDFC Click To Protect Plus plan, on death, the benefit payable depends on the cover option chosen.
  • Under the Life Option in HDFC Click To Protect Plus, the Sum Assured is paid on death
  • Under the Extra Life Option in HDFC Click To Protect Plus, additional Sum Assured is paid in case of accidental death
  • Under the Income Option in HDFC Click To Protect Plus, 10% of the Death Benefit is paid in lump sum on death. The remaining 90% is paid in equal monthly instalments over a period of 15 years post death.
  • Under the Income Plus Option in HDFC Click To Protect Plus, the entire Death Benefit is paid on death. Additional payouts @ 0.5% of the SA is paid monthly over 10 years
  • The additional payouts can be level payouts or increasing payouts increasing @10% p.a. in the HDFC Click To Protect Plus plan
  • In HDFC Click To Protect Plus plan, the death benefit is higher of 125% of Single Premium or SA for Single premium plans or higher of 10 times annual premium or SA or 105% of all premiums paid till death
  • Income tax benefit on the premium paid as per Section 80C and on the claims received as per Section 10(10D) of the Income Tax Act. 

Product Specification:

 

 

Minimum

Maximum

Entry Age (Last Birthday)

18 years

65 years

Maturity Age (Last Birthday)

-

75 years

Policy Term (PT) in years

10

40

Premium Paying Term (PPT) in years

Regular pay - Equal to policy term
Limited pay – policy term – 5
Single pay

Premium Paying Frequency

Annual, half-yearly, quarterly, monthly

Yearly Premium

3000

No limit

Sum Assured

25,00,000

No limit

 

Details About Premium

Annual premium in Rupees for a SA of 50 lakhs under the HDFC Click To Protect Plus for a policy term and PPT of 20 years:

 

Age

Life Option

Extra Life Option

Income Option

Income Plus Option

40 years

7783

10,281

6538

10,508

50 years

19,331

21,828

16,238

26,097

 

Policy Details 

Grace Period: 15 days grace period is allowed for payment of premium in monthly mode and 30 days in other modes in the HDFC Click To Protect Plus plan. 

Policy Termination or Surrender Benefit: the policyholder can surrender HDFC Click To Protect Plus plan and avail surrender value only in case of Single Premium policies. 

Surrender Value = 70% of Single Premium * (unexpired coverage term/original coverage term) 

Free Look Period: If you are not pleased with the coverage, and terms and conditions of HDFC Click To Protect Plus, you have the option of canceling the policy within 30 days of receipt of the policy documents, provided there has been no claim. 

Additional features or riders

  • Premium rates are lower for non-tobacco users under HDFC Click To Protect Plus plan
  • With the Life Stage Protection feature, the Sum Assured can be increased on important milestones of one’s life like marriage and child birth in HDFC Click To Protect Plus.
  • On marriage, 50% of the SA can be increased and on each child birth, 25% of the SA can be increased under HDFC Click To Protect Plus plan.
  • In the HDFC Click To Protect Plus plan, the additional coverage can be decreased after attaining 45 years which will subsequently lower future premiums

Exclusions

  • In case of suicide committed within 12 months of policy inception or revival only 80% of premiums paid are returned to the nominee under HDFC Click To Protect Plus plan.
  • In case of rider benefit opted for in HDFC Click To Protect Plus, death 6 months after the accident or accidental death due to intentional self-inflicted injury, alcohol abuse, war, aviation, acts of criminal nature or due to participating in hazardous activities is excluded. 

Documents Required

Policyholder has to fill up an ‘Application form/ proposal form’ online and provide self-attested copies of KYC/AML Documents.

Term Plan – General Information to Buy the Perfect Term Policy

What is a Term Plan?

A term plan is the simplest and most basic insurance product. It is designed to cover only the risk of death. In the event of death of the policyholder, his or her family or nominee receives the sum assured (or the cover amount).

If the policyholder survives the policy term, he or she does not receive anything and loses the yearly premiums paid. The policy is closed with no returns or payout from the insurance company to the insured.

A term plan is the cheapest life insurance product because everything that one pays (entire premium amount) goes towards covering only the life of the insured. There are no investments or other benefits clubbed with a pure term insurance plan. They offer protection of insurance cover at extremely affordable prices. Term plans are the only life insurance product available in the pure insurance category.

Types of Term Insurance Plans

Though a term plan is a pure play life insurance policy that seeks to protect the dependents in case of demise of the breadwinner, people looking for a good term plan must know the distinction between the various types of term plans that are available in the market. This will help them make a wise decision when the choose the right term plan for themselves. 

  • Standard Term Life Insurance Plan: A standard term plan is the pure vanilla term plan without any frills. Under this plan, the insured has to pay a certain premium to get a life cover for a large sum assured. The sum assured is handed over to the nominees (family) in the unfortunate event of demise of the insured person. 
  • Term Return of Premium (TROP) Plan: This plan is similar to the term plan in all aspects save one – the premium paid by the policyholder is returned at the end of the policy tenure. The premium for these term plans is considerably more than the standard plan. Insurance companies may come up with various modes of payment such as limited period premium payment or whole tenure premium payment. 
  • 5,10, 15, 20 Year Term Plans: Unlike standard term policies that need to be renewed every year, these term plans are for a certain number of years such as 5, 8, 10, 12, 15, etc. The chief benefit of these policies is that the premium amount remains fixed throughout the period of the plan. The choice of the term plan you choose should depend upon your requirements and needs. The shorter term plans are ideal for people with immediate financial responsibilities that will affect the family members in case of their absence, while the longer plans are best for people who want cessation of financial worries in the long term. 
  • Single Life and Joint Life Term Insurance Plans: The single life term plans only cover one person while the joint life policy covers the spouse also. The premium for the joint life cover is less than buying two single life term policies. The joint life plans may offer death benefit on first claim basis or both insured persons. In the former case, the policy terminates on the demise of any of the two joint lives insured, while in the latter case, benefit accrues for both persons. 
  • Convertible Term Plan: These policies are best for people who prefer to have an option to switch from a pure play term plan to an endowment plan in the future. These plans offer the benefit to the policyholder to opt for the savings insurance plans when they are in a position to easily pay the higher premium amount for these policies 
  • Online and Offline Term Plans: The online plans can be bought over the internet while the offline plans can be bought through intermediaries. The online term plans are cheaper than the offline ones as there are no commission or other charges to be paid to the agent. 
  • Decreasing and Increasing Term Insurance Plans: The decreasing plans provide a reduced cover with the passage of time, the opposite holds true for the increasing term policies. The increasing policies are ideal to cover rising costs.

How Much Life Cover is Required?

The life cover should neither be less or inadequate, nor should it be more than what is required as that will entail paying higher premium which may be unsustainable in the long term. The quantum of life cover can be determined numerically by Human Life Value, commonly known as HLV. It is a fairly easy way to arrive at the cover amount. An individual's HLV is normally expressed in terms of multiple/factor of his/her annual income. The individual’s age and outstanding loan amount are also taken into consideration at arriving at the life cover. 

Why the Need for Term Insurance? 

Adequate Cover for Dependents

It is important to have adequate cover for one’s dependents. Death does not come with any prior intimation, therefore it is imperative to prepare well so that the family is taken care of in one’s absence. Term plans help ensure the financial stability of the family even if one is not around to take care of them personally. 

Family Can Continue Similar Lifestyle

Term insurance is important for everyone, especially for the primary breadwinner of the family. The lump sum amount (death benefit) that the family/nominee receives after the death of the insured allows the family to continue living a similar lifestyle. The family can live with pride without having to depend on others. 

Peace of Mind

The fact that one has made arrangements for a future scenario where the family is financially taken care of in one’s absence gives assurance and peace of mind. One does not have to worry unnecessarily about the consequences of one’s death on the family. Term insurance secures the family’s future and saves them from harassment due to financial reasons. 

Provides Supplementary Income

If one has opted for optional additional riders, a term plan will provide supplementary income in case of loss of income due to accidental disability/death or illness. 

Acts as a Risk Management Tool

Term insurance plans can also be used as a finance planning and risk management tool. 

Illustration: If one takes a long term housing loan, then one can simultaneously take a term plan of corresponding value. Many housing finance loans require the borrower to take a decreasing term plan. What will happen is that the premiums to be paid will be linked to the outstanding principal over a period of time and will gradually reduce as both the tenure and insured amount decrease. In case of death of the primary breadwinner who is also the borrower, the family will not lose the house because the insurance company will repay the outstanding loan amount. 

How to Choose a Term Insurance Plan?

There are many term insurance plans available in the market today and it can be a challenge to select an appropriate plan. While choosing a term insurance plan, one should focus on the key features that make a difference. 

Some of the important features and factors to consider are discussed below: 

Human Life Value

One takes term insurance to provide a financial cover for one’s dependents and family members to secure their future when one is not around. It is important to ensure that the life insurance cover is adequate. In insurance parlance, the cover should provide for the human life value (HLV) of an individual. 

HLV is broadly calculated by adding liabilities like loans to the income/salary of an individual. This figure is the basis of the life insurance cover. An appropriate plan is one which provides for at least the HLV. 

Cost

Term plans are undoubtedly the cheapest form of life insurance but they can still be made cheaper. Insurance plans having lower expenses cost less as these have lower premiums. One can negotiate lower premiums from the insurance company if one is a non-smoker. 

Riders

Riders help improve the scope of the term insurance policy and make it more comprehensive. A rider is essentially an add-on feature to the primary policy, offering benefits over and above the actual policy on payment on an extra amount and is subject to certain terms and conditions. Examples of riders for term plans are critical illness rider, disability cover, loss of employment cover and waiver of premium cover. Riders should be selected keeping in mind individual as well as family needs. They add significant value to the life cover. 

Cover Enhancement

Some insurance companies allow the option to enhance the life cover of term plans during critical stages of a policyholder’s life. 

For example, certain insurance companies allow the policyholder to increase the life cover by 50% at the time of marriage and by 25% at the time of birth of a child. 

Starting with a basic cover, the insured can go on augmenting the cover with increase in responsibilities and also an increase in the ability to pay higher premium. 

Convenience

Term insurance plans can be bought sitting in the convenience of one’s home. It is now possible to purchase a term plan online from the website of the insurance company anytime of the day, from any location, on any internet-enabled device. A healthy individual need not even undergo a medical test. Plans available online are often cheaper to buy than offline – through an agent or company representative. 

Claim Settlement Ratio

It is extremely important to check beforehand the claim settlement ratio of the insurer, yet most people are unaware of this step. This information is critical because it indicates the percentage of claims honoured by the insurance company versus the total claims received in a given year. 

Type of Payouts in Term Plans

Insurance companies provide a variety of payouts options in case of term life insurance policies. Most people believe that lump sum option is the only type of payout. However, insurance companies offer other options to prevent non-judicious use of large amounts of money by family members of the deceased. 

Common types of payouts are discussed below: 

Lump Sum Payout

This is the most common method of disbursing the sum assured after death of the policyholder. Lump sum payout involves the insurance company handing over the entire cover amount to the dependent family members/nominees of the insured. They receive a huge sum of money in one go.

Annuity

Insurance companies also offer another less known way of giving sum assured to the family/nominees of the policyholder – annuity. Here, the money is not given in one instance but paid over a number of years. The frequency of payment can be decided at the time of taking the policy. It maybe monthly, quarterly, half-yearly or annual, decided by the policyholder keeping in mind the requirements of the family after his/her death. The insurance company puts the sum assured in an annuity fund which pays out small sums of money periodically to the family. 

This payout option has many merits. Often, dependent family members are not adept at handling money matters, especially huge sums of money. They may spend inappropriately and exhaust it very soon. It has also been seen that large sums of money often cause family disputes in the absence of the head of the family, who normally takes the life insurance policy. Annuity payout prevents such pitfalls which are inherent with lump sum payment. 

Mixed Payout

This is a combination of lump sum payout and annuity payout methods. It involves giving a large amount (but not the full sum assured) to the family/nominee after death of the insured and remaining over a period of years, the frequency of which is decided by the policyholder when he/she is alive. 

The policyholder may also instruct the insurance company to give large sums of money to his/her family at important stages in their lives such as child’s marriage, for child’s higher education requirements etc.