HDFC Life Group Traditional Secure Plan

What is HDFC Life Group Traditional Secure Plan?

HDFC Life Group Traditional Secure Plan is a single premium, non-participating, non-linked group insurance designed for companies that want to provide financial protection to their employees. This plan guarantees returns and is perfect for managing retirement plans and gratuity funds. It offers features like annual interest credits and options for withdrawals under certain conditions. The plan ensures that employees receive assured benefits at maturity or in case of death, while the company can enjoy tax benefits according to current laws.

Features of HDFC Life Group Traditional Secure Plan

The key benefits of the HDFC Life Group Traditional Secure Plan are listed below:

• Guaranteed Returns: This plan gives assured returns, making it a good choice for managing retirement planning and gratuity funds.

• Interest Crediting: Interest is added at the end of each financial year, helping the investment grow steadily.

• Withdrawal Options: Policyholders can make withdrawals under certain conditions during the financial year.

• Multi-Year Guarantee: The plan has a multi-year guarantee, which means it offers returns over a set period.

• Death and Maturity Benefits: It provides assured benefits on death and maturity, ensuring financial security for employees.

Eligibility for HDFC Life Group Traditional Secure Plan

NOTE:

• All ages are based on the last birthday.

• Risk cover begins from the policy commencement date for all lives.

• New members can join on designated dates as per scheme rules.

Benefits of HDFC Life Group Traditional Secure Plan

The key benefits offered by the HDFC Life Group Traditional Secure Plan are as follows:

1. Benefits on Death

   • Non-Superannuation Schemes (e.g., Gratuity): ₹10,000 is paid to trustees/beneficiaries in addition to employer scheme benefits, capped at 10% of the policy account value at the start of the financial year.

   • Superannuation Schemes: Benefits are as per employer scheme rules, capped at 10% of the policy account value or assured benefit.

   • No benefits are payable from a new tranche's policy account in its first financial year. All benefits for the member cease after death benefit payment.

2. Benefits on Maturity

   • Maturity amount is the higher of the policy account value or assured benefit.

   • Policyholders can:

     • Transfer the maturity amount to an existing HDFC SL Group Traditional Plan (default).

     • Reinvest in a new tranche at prevailing interest rates.

     • Withdraw the entire amount, closing the tranche.

   • After maturity, all benefits for the member associated with the tranche cease.

3. Assured Benefit

   • For superannuation tranches, assured benefit includes a 1% p.a. guaranteed return on the policy account value at the start of the policy year.

4. Benefits on Surrender

   • Policy can be surrendered with a one-month notice (can be waived).

   • Surrender benefit = policy account value - surrender charge - Market Value Adjustment (MVA).

   • Surrender charge: 0.05% of policy account value (max ₹5 lakhs) within three years, nil after three years.

   • All rights and benefits terminate upon surrender. Surrender can also be done at the tranche level, with pro-rata interest credited.

5. Benefits on Withdrawal

   • Non-Superannuation Schemes (e.g., Gratuity): Withdrawals allowed for death claims, retirement claims, and valid scheme payments, capped at 10% of policy account value at the start of the financial year.

   • Superannuation Schemes: Benefits paid per employer scheme rules, capped at 10% of policy account value.

   • No benefits are payable from a new tranche's policy account in its first financial year.

6. Annuity Purchase

   • Annuity Plan purchases are governed by employer scheme rules.

   • If superannuation funds are maintained with multiple insurers, the group policyholder can choose the insurer for annuity purchase.

Policy Details of HDFC Life Group Traditional Secure Plan

• Separate Tranches for Each Contribution: Every contribution creates a new tranche with its own commencement date, end date, and interest rate based on a specified period (minimum one year).

• Fixed Membership for Tranches: The number of members in a tranche is fixed at its commencement date, and no new members can be added later.

• Policy Commencement and Member Count: The policy starts on the date of the first contribution, and the member count is tracked at both policy and tranche levels.

• Separate Policies for Different Schemes: Superannuation and non-superannuation schemes like gratuity require distinct master policies.

• Interest Rate Declaration: Interest rates are declared for specific periods (minimum 1 year) based on expected yields, with a maximum 80 bps difference between gross and net yields after expenses.

• Interest Crediting: The company announces interest rates at the start of each month for specified periods, applicable to contributions made in that month. Interest is credited annually or on a pro-rata basis for mid-year tranches, with no impact on prior contributions in case of rate revisions.

• Mortality Charges: Gratuity schemes are charged Re 1 per ₹1,000 sum assured, while superannuation schemes have no mortality charges. These are deducted from tranches, including on policy anniversaries for renewals.

• Free-Look Cancellation: Policyholders can cancel within 30 days of receiving the policy, with a refund of premiums after deducting risk premiums, medical exam costs, and stamp duty (if applicable). Requests must be made through the Master Policyholder.

• Grace Period for Non-Forfeiture: As this is a single premium policy, no grace period is applicable.

How HDFC Life Group Traditional Secure Plan Work?

The HDFC Life Group Traditional Secure Plan works in the following manner:

• Employers make contributions to create a fund for benefits like superannuation, gratuity, or leave encashment.

• The policy starts when the first contribution is made. Separate policies are needed for superannuation and gratuity.

• Each contribution creates a new tranche with its own start date, end date, and interest rate.

• The number of members in a tranche is fixed at the start, and no new members can be added later.

• A policy account keeps a clear record of all contributions, interest earned, and benefits paid.

• The plan gives a guaranteed minimum return, along with extra returns declared by HDFC Life.

• Interest is credited to the policy account as per the rates declared by HDFC Life.

• Funds are used to pay benefits like gratuity or retirement as per the scheme rules.

• Employers can choose flexible contribution and payout options based on their needs.

Suicide Exclusion Criteria

Under the HDFC Life Group Traditional Secure Plan, if the policyholder dies by suicide, the nominee/beneficiary will receive the sum assured (if applicable) and benefits as per the scheme rules, based on the date of death.