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Knowledge Base Life Insurance Term Plan HDFC Life Term Assurance Plan Review
Thursday, 20 January 2011 18:22

HDFC Life Term Assurance Plan Review

Written by  Yashish Dahiya
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HDFC Life Term Assurance Plan


Plan Name: Term Assurance

Insurer: HDFC Standard Life Insurance Co Ltd

Category:  Term Life Insurance Plan

Objective:  Financial protection of Family


HDFC Term Assurance is a typical term life insurance plan which provides financial cover to your family in the case of your unfortunate demise. You get high cover at relatively nominal cost. The Sum Assured is given to the nominee if something happens to the policyholder. There is no survival benefit in HDFC Term Assurance plan. However there are riders available with Term Assurance at nominal extra cost.

 

Who can buy Term Assurance?


HDFC Term Assurance is for anyone who has attained age of 18 and is not more than 55 years old. The period of policy term is between 10 years and 30 years. For Single Premium the minimum and maximum term is 2 years and 15 years.

 

How much cover: The minimum Sum Assured that could be opted is Rs 8 lacs and the maximum depends on your requirement and subject to underwriter’s conformity.

Unsure what cover to get?

Rule of Thumb: The typical cover should be ten times your annual income.

 

Summarized Table:

Entry Age

18 years - 55 years

Maturity Age

Maximum – 65 years

Sum Assured

Rs 8 lacs - unlimited( subject to underwriting)

Policy Term

10years - 30 years

Premium Mode

Yearly, Half Yearly, Quarterly, Monthly, Single


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What do I get?


Death Benefit: The Sum Assured/cover taken by the policyholder is paid to the nominee (parents, spouse or children) if the term life insurance policy is in effect.

 

Tax Benefits: Tax benefits can be availed under 80C and 10(10D) of the Income Tax Act, 1961.

80C- the yearly premium you pay (maximum: 1 lac) is deductible from taxable income.

10(10D) - Death claim is tax free. The Sum Assured which the nominee will receive is not subject to tax.


Illustration:

Vijay is 32 years old living with his parents. He opts for HDFC Term Assurance plan with cover of 40 lacs and term of 25 years. Vijay nominates his wife as beneficiary.

 

Consider these Scenarios:

Scenario 1: Vijay dies in the 1st policy year- the Vijay’s wife will get 40 lacs. The same scenario is relevant to all policy years.

Scenario 2: Policy is in grace period and Vijay dies, Sum Assured minus renewal premium will be paid.

Scenario 3: Policy lapses on the 22nd year, Vijay dies, nothing will be paid. However policy can be revived within 15 days from the date of renewal.

 
Riders:


Riders are very useful additional benefits which could be beneficial to the policyholder. They are less priced but their utility is huge. The riders can be added only at the commencement or anniversary of the policy year.  Riders available with HDFC Term Assurance Plan are:

 

Critical Illness Benefit: An amount equal to Sum Assured is paid if any of the 6 critical illnesses is diagnosed. The diseases covered are Cancer, Coronary By Pass Graft Surgery, Heart Attack, Kidney Failure, Major Organ Transplant and Stroke. Once the amount is paid, no further critical illness claim will be accepted. The basic term assurance will continue.


Accidental Death Benefit: An amount equal to Sum Assured (apart from basic Sum Assured) is paid if policyholder expires because of accident. The death has to occur within 90 days from accident.

Accelerated Sum Assured Benefit: An amount equal to Sum Assured is paid if any of the 6 illnesses is diagnosed. However after the amount is paid, the policy ceases to exist.

 

What Else?


How to buy: Policybazaar representatives and its dedicated helpline are available at your beck and call, Policybazaar makes insurance buying easy.

 Sum Assured: HDFC Term Assurance Sum Assured cannot be changed once taken. For more cover, additional term life insurance can be taken.

Reinstatement: Term Assurance can be revived within 2 years from the premium due date. However all outstanding premiums are to be paid.

Maturity: There are no maturity benefits in HDFC Term Assurance Plan.

Payment Method: The payment modes available with HDFC Term Assurance plan are cash, cheque, credit/debit card.

Exclusion: No Sum Assured will be paid if death is caused within first year of policy issuance or policy revival.

Death Claim: The nominee can request for the death claim (Sum Assured) after filling claim forms along with submitting list of documents which will prove authenticity of the claim.

 

Close Competitors:


Aviva LifeShield Plus, Bajaj Allianz New Risk Care II, Bharti AXA Elite Secure, Kotak Preferred, LIC Amulya Jeevan-I, Met Suraksha Plus, Max New York Life Platinum Protect, Reliance Term Plan, Tata AIG Life Raksha.

 


Policybazaar take on HDFC Term Assurance:


HDFC Term Assurance plan is excellent term life insurance plan but is not available online. The diseases under the rider cover only 6 diseases as compared to usual 12 disease coverage. Term Assurance is one of the cheapest term plans presently available in the market. For buying Term Assurance, click here.

 

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1 Comment
  • Comment Link jagan Sunday, 17 April 2011 22:24 posted by jagan

    Apart from qualitative information, quantitative information and appropriate ratios also helps the customers.
    requesting policy bazar to provide such information to the wider audience.

    regards
    jagan

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