Financial Daily from THE HINDU group of publications
Sunday, Jan 11, 2004
Financial Daily from THE HINDU group of publications Sunday, Jan 11, 2004 |
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Investment World
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Life Insurance Money & Banking - Life Insurance HDFC Endowment Plan Sowmya Sundar
HDFC's plan pays a lumpsum either on death or maturity but the returns are directly linked to the underlying investments.
Features
The plan has five investment fund options — Liquid Fund, Secure Managed, Defensive Managed, Balanced Managed, and Growth Fund. Liquid Fund is the least risky with investments in bank deposits and short-term money market instruments. Growth Fund is the riskiest with an investment of up to 100 per cent in equities.
Switching options
You have the option to switch between funds and also redirect future premiums into a different fund. .
Benefits
You have four options to choose from: Life — Greater of the sum assured (SA) or fund value is paid on death. Life and Health — The greater of the SA or fund value is paid either on death or earlier diagnosis of six critical illnesses. Extra Life and Extra Life and Health — These plans are similar to the above-mentioned plans except that they have an additional benefit equivalent to the SA if death occurs due to an accident. On survival up to maturity, you get the fund value.
Levels of cover
You can choose from three levels of risk cover (SA) — low, medium and high — depending on the risk cover chosen.
Premium alteration
Premiums levels can be either reduced or increased if regular premiums have been paid for three years and the unit fund value is at least Rs 15,000.
Withdrawals
Withdrawals can be made from the fund any time provided the balance does not fall below the SA.
Charges
The charges are lower compared to other plans. You can pay minimum premium in the first two years and subsequently increase them. The charges in the subsequent years are substantially lower, even on top ups. Moreover, you will not be charged for altering your premium, switch between funds or re-directing your premium into other funds.
Pieces under this column seek to examine insurance products in detail. Readers are requested to compare products featured under this column with similar products offered by other players before arriving at an investment decision.
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