HDFC life launches single premium ULIP

MUMBAI: HDFC Life has recently announced the launch of a single premium unit-linked insurance policy ( ULIP) targeted at those looking to create their post-retirement corpus.

Offered to those in the age-group of 45-70 years, the policy comes with a fixed tenure of 15 years. The minimum premium under the plan is Rs 25,000, but it does not prescribe any upper-limit. The sum assured, or life cover, will be 1.1 times the premium paid by the insured.

Premium allocation charges for single premiums over and below Rs 10 lakh are 1.5 per cent, and 2.5 per cent respectively. Annual policy administration charges will range from 0.01 per cent-0.05 per cent, depending on the premium amount and number of completed policy years. Mortality charges, like all life policies, are computed on the basis of your age and sum assured.

The plan offers five fund options - short-term fund, income fund, balanced fund, blue-chip fund and opportunities fund - to choose from, depending on your risk appetite.

At maturity, you will be entitled to the accumulated fund value. You also have the option of withdrawing this amount in installments (minimum Rs 10,000) over a period of five years post maturity.

In the event of the policyholder's death, the nominees will be handed over the fund value or sum assured (minus withdrawals made), whichever is greater. For the purpose, withdrawals made during the two-year period preceding the date of death will be taken into account, if the policyholder dies before he/she turns 60. In case death occurs after the policyholder crosses this threshold, withdrawals made by him/her after attaining the age of 58 will be deducted from the sum assured.

Upside: You can consider this product if you have a lump-sum amount that you wish to direct towards building your retirement kitty. It could suit your requirements if you are looking for an investment option that also offers some element for protection for your dependents.

Downside: Financial planners do not recommend combining insurance and investment objectives. This apart, those over the age of 60 may not have any dependents, rendering the product's life cover - for which they pay mortality charges - redundant.