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HDFC Life Systematic Retirement Plan – Features, Eligibility and Review

HDFC Life Systematic Retirement Plan – Features, Eligibility and Review

After retirement, income stops. While regular expenses would continue to rise for the rest of life, high medical expenses can eat away the retirement corpus. If we cannot plan for post-retirement, it can ruin our financials. There are various insurance companies that offer deferred or immediate pension plans. HDFC Life Systematic Retirement Plan is a deferred pension plan where one can save on a regular basis and gets pension income after a deferment period and enjoy their post retirement life. In this article we would provide HDFC Life Systematic Retirement Plan Features, Eligibility, Positive Factors and any Negative Factors in this plan.

Also Read: How good is ICICI Pru Guaranteed Pension Plan Flexi?

Features of HDFC Life Systematic Retirement Plan

Here are the key features of this retirement plan.

  • This is an individual or group plan, non-participating, non-linked, savings and deferred annuity plan.
  • One can take this plan and defer the annuity payout.
  • This retirement plan provides guaranteed income for whole life after the deferment period by paying premiums for limited period.
  • Option to choose annuity income either monthly, quarterly, half yearly or yearly.
  • One can opt for return of premium after death.
  • The annuity rate is fixed and guaranteed at the inception of the policy.

What are various Annuity Options available in this plan?

There are 2 annuity options available:

  1. Life Annuity
  2. Life Annuity with return of premium

Benefits in HDFC Life Systematic Retirement Plan

Here are the major benefits of this plan.

A) Death Benefits

On death during the deferment period, the higher of the following is paid

  • Total premiums paid at compounding interest of 6% p.a. till the date of the death
  • 105% of the total premiums paid

On death after the deferment period, the following would be paid:

  • For the life annuity option – No death benefit is available
  • For the life annuity with return of premium option, higher of total premiums with 6% compound interest p.a. or 105% of the total premiums paid, would be paid.

B) Annuity Payout Benefit

After the deferment period is over, annuity amount would be paid as per the rated defined at the inception of the policy.

Eligibility to buy HDFC Life Systematic Retirement Plan

Here is the eligibility criteria to take this plan.

Eligibility in HDFC Life Systematic Retirement Plan

How to buy HDFC Life Systematic Retirement Plan?

You can follow below steps to purchase this plan.

Step-1:  Choose how much premium you can pay or how much annuity you would like to receive

Step-2: Choose a premium payment term and deferment period as per your convenience.

Step-3: Choose your annuity option i.e. Life Annuity or Life Annuity with return of premium option.

Step-4: Choose annuity payout frequency i.e. monthly, quarterly, half yearly or yearly or any date of your choice.

Annuity payouts would be made directly to your bank account based on the option chosen after the deferment period.

How does HDFC Life Systematic Retirement Plan Work exactly?

Let me explain this with an example:

  • Mr Rajesh aged 45 want to take a retirement plan. He purchased HDFC Life Systematic Retirement Plan with Life Annuity Option by paying a premium of Rs 2 Lacs p.a.
  • The payment term is for 10 years.
  • He wishes to receive an annual annuity after the deferment period of 15 years i.e. When he reaches 60 years of age.

Here is how the benefits would be paid:

How does HDFC Life Systematic Retirement Plan Work exactly

Positive Factors in HDFC Life Systematic Retirement Plan

Here are the major positive factors in this plan.

This is a simple retirement plan which can be understood easily without much complicated terms and conditions.

Individuals have an option to choose Life Annuity or Life Annuity for return of premium plan.

This is a limited premium payment plan with an annuity for whole life. Means one need to pay premiums only for a limited period, but annuity would be paid for whole life after the deferment period.

Guaranteed Annuity rates at inception. Means you need not worry whether the rates would change in the future or after the deferment period.

Under Life Annuity with return of premium, on death, the nominee would get the total premiums paid.

In case of death during the deferment period, the insurance company would pay total premiums paid along with 6% compound interest. These days bank FD interest rates are also low compared to this.

Negative Factors in HDFC Life Systematic Retirement Plan

Since this is a pension plan, there would not be any maturity benefits payable.

There are no survival benefits payable during the deferment period.

No loan available in this plan.

Deferred Pension plans provide low returns between 4.5% to 5.5%.

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HDFC Life Systematic Retirement Plan – Should you buy?

One should have a proper retirement plan to meet regular expenses and high cost medical expenses post retirement. In the absence of this, it can ruin the retirement corpus. There are various investment options for retirement planning. HDFC Life Systematic Retirement Plan is one among them which is simple to understand. While such plans provide low returns between 4.5% to 5.5%, these are safer and comes with low risk. If you do not like to invest in equity or equity mutual funds or if you are a low risk taker, you can consider such retirement plans.

Source: HDFC Life Systematic Retirement Plan Brochure

Suresh KP

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