PolicyBazaar and HDFC Life have partnered to launch a new term plan with a promise of 100 per cent claim assurance. A term plan is a basic form of life insurance policy that provides a financial cushion for a set period of time. As pure life cover, a term insurance policy ensures that beneficiaries get a death benefit if the policyholder passes away during the policy period.
Term plans are largely purchased for death benefits (or tax savings) as they offer a large amount of coverage at set premiums which are typically affordable.
The ‘HDFC Life Click 2 Protect Ultimate’ term product differentiates due to its ‘100% Claim Assurance’ with a promise to uphold all valid claims as long as the policy is in force and all premiums are paid. Additionally, much like some other term plans currently available in the market, this product comes with flexible payout benefits and financial security features like smart exit, terminal illness benefit, return of premium (ROP), etc.
It can be brought directly from HDFC Life or via Policybazaar wherein the latter has collaborated with HDFC Life to offer its 100 per cent claim assurance and streamline the claims process for policyholders.
Let’s take an analytical look at this term plan including its key features, potential limitations, and exclusions.
Key Features of this product:
100% Claim Assurance: Ensures that all valid claims are honoured, provided premiums are fully paid and the policy is in force at the time of the claim.
Terminal Illness Benefit: If the policyholder is diagnosed with a terminal illness, the death benefit is accelerated up to a maximum of Rs 2 crore. However, this benefit is subject to the ‘Waiting Period’ condition mentioned in the Terms and Conditions of the policy documents. Moreover, it does not apply to any policyholder who is above 80 years of age.
A policyholder will be regarded as terminally ill only if they are diagnosed as suffering from a condition which, in the opinion of two independent medical practitioners specialising in the treatment of such illness, is highly likely to lead to death within 6 months.
The policy documents state that the insured must not be receiving any form of treatment other than palliative medication for symptomatic relief. The terminal illness must be diagnosed and confirmed by medical practitioners registered with the Indian Medical Association and approved by the company.
Return of Premium: Under this benefit, the policyholders can receive a 100 per cent refund of Total Premiums paid as a lump sum, upon survival till maturity, however, they have to pay an additional premium over and above that payable for the base plan.
Flexible Death Benefit Payouts: If this option is selected, the nominee will receive full or part of the death benefit in installments. Policyholders can choose this option at policy inception or by the nominee at the time of claim. Additionally;
• This option can be opted for full or part of death claim proceeds payable under the policy
• The instalment can be taken over a chosen period of 5 to 15 years
Multiple Premium Payment Terms: Policyholders can opt for either single, limited, or regular pay options to suit different financial situations.
Smart Exit Benefit: After 25 years of premium payments, policyholders can opt-out and receive back the total premiums paid, provided the policy is still active. This option cannot be exercised during the last 5 policy years. Moreover, it is not available where the ‘Return of Premium’ option has been selected.
What is the Eligibility Criteria?
The policy can be purchased at the entry age of 18 to 50 years. The maximum maturity age is 85 years.
Policy Term: 2 to 40 years
Sum Assured: Rs 1 crore to Rs 3 crore
Death and Maturity Benefits
In the unfortunate event of a policyholder’s demise, the sum assured is paid to the nominee. It is the higher of:
• Sum Assured on Death
• 105% of Total Premiums Paid
Sum Assured on Death for Single Pay (SP) is the highest of:
• 125% of Single Premium
• Sum Assured on Maturity
• Basic Sum Assured
Sum Assured on Death for Other than Single Pay (Limited Pay and Regular Pay) is the highest of:
• 10 times the Annualised Premium
• Sum Assured on Maturity
• Basic Sum Assured
Maturity Benefit
If the ROP option is chosen, 100 per cent of the total premiums paid is refunded on survival until maturity. If the policyholder survives the term without the ROP option, no maturity benefit is provided.
What are the exclusions and limitations of this plan?
While the policy seems to be robust, certain key exclusions apply, such as;
Suicide Clause: If death occurs due to suicide within 12 months of policy commencement or revival, the nominee is entitled to 80 per cent of the total premiums paid or the surrender value, whichever is higher.
Waiting Period for Terminal Illness Benefit: A six-month waiting period applies before the terminal illness benefit becomes active. In case a terminal illness is diagnosed during the waiting period, no benefit will be payable.
Non-Disclosure of Pre-Existing Conditions: If any material fact, such as a pre-existing illness (for example; cancer or auto-immune diseases), is undisclosed at the time of purchase, claims may be denied.
Moreover, this plan also does not offer any policy loan against the product.
Should You Consider This Plan?
Anybody looking to buy a term plan can look at similar products that not only offer life covers but also other features like a return of premium, terminal illness benefit, smart exit options, etc. that should provide;
Comprehensive life cover with assured claim settlement.
Financial security for dependents in case of an untimely demise.
An option to get premiums refunded at maturity.
Flexible payout structures to align with your changing financial planning needs.
Remember, before purchasing any health insurance or term plan, it is important for policyholders to carefully review the exclusions, waiting periods, and cost-benefit of the additional features before committing. Always review the policy document thoroughly and consult a financial advisor if needed before making a decision.
