HDFC Life ProGrowth Plus Plan

HDFC Life ProGrowth Plus- Key Features

Some features of the plan are:

• This plan is a ULIP plan with Regular Pay option.

• HDFC Life ProGrowth Plus plan offers 2 categories - Life Options and Extra Life Option.

While life option provides only death benefits, extra life option offers coverage for death benefit + accidental death benefit.

The following 4 investment funds are available in this plan which is provided by HDFC life insurance : 

• Blue Chip Fund: The prospect of risk and returns is very high because the fund composition is skewed towards equity asset allocation to the extent of 80% to 100%. This means that just 0% to 20% can be allocated between money market instruments, cash, deposits and liquid. The highlight of the HDFC Progrowth Plus fund is investment in large cap equities and equity related instruments.

• Opportunities Fund: The HDFC Progrowth Plus fund composition is primarily in favour of mid-cap equities and equity related instruments, so much so that only 0% to 20% is allocated in money market instruments, cash, deposits and liquid, the balance i.e. 80% to 100% is kept in equity. Consequently, the probability of risk and returns is very high.

• Balanced Fund: The HDFC Progrowth Plus investment scheme is designed to distribute funds evenly among various asset classes, resulting in a rating of moderate to high risk and return potential. By investing 40 to 80% in equity, the returns are expected to increase, while allocation towards debt instruments reduces the volatility of returns. The remaining funds, ranging from 0 to 60%, are allocated towards government securities, fixed income instruments, and bonds. Additionally, up to 20% of the funds can be invested in money market instruments, cash, deposits, and liquid.

• Income Fund: This HDFC Progrowth Plus fund has a moderate risk and return rating as the fund composition is between 80 and 100% in government securities, fixed income instruments and bonds. Of the remaining 0% to 20% are invested in money market instruments, cash, deposits and liquid. 

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Benefits of HDFC Life ProGrowth Plus

Some benefits of the scheme are:

• The insured will get the total Fund Value on Maturity under HDFC Life Progrowth Plus

• Under HDFC Life Progrowth Plus, maturity proceeds can be availed in equal installments post maturity over a period of 5 years through the Settlement Option

• On death of the policyholder under HDFC Progrowth Plus, higher of the Sum Assured net of Partial Withdrawals made 2 years prior to death or Fund Value or 105% of premiums paid is payable to the nominee if attained age is less than 60 years

• Under HDFC Life Progrowth Plus plan, on or after attaining 60 years, higher of SA net of Partial Withdrawals made after age 58 years or Fund Value or 105% of premiums paid is payable

• HDFC Progrowth Plus Plan provides an additional Accidental Death Benefit equal to the SA is payable under the Extra Life Cover Option if the policyholder meets with accidental death. 

• Income tax benefit on the premium paid as per Section 80C and on claims under Section 10(10D) of the Income Tax Act.

• This plan provides EMI facility to HDFC Bank credit card holders

• It offers convenient premium paying options – credit card, internet banking, cheque, auto debit facility

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Product Specification:

HDFC Life ProGrowth Plus Plan Details

Grace Period: 15 days grace period is allowed for monthly mode and 30 days for other modes in HDFC Life Progrowth Plus.

Policy Termination or Surrender Benefit: Policyholders of HDFC Life Progrowth Plus are allowed to surrender the policy after 5 completed years. If surrendered before 5 years, the fund value net of discontinuation charge will be credited to the Discontinued Policy Fund where it will earn a minimum of 4% p.a. growth. After completion of 5 years, the fund value in the Discontinued Policy fund as on that date will be paid to the policyholder. If surrendered after 5 completed policy years, the entire Fund value on the date of surrender is paid without any charges.

Free Look Period: If you are not pleased with the coverage, and terms and conditions of the HDFC ProGrowth Plus Plan, you have the option of canceling the policy within 15 days of receipt of the policy documents, provided there has been no claim. 

Inclusions

• Partial withdrawals are allowed every year with a minimum value of Rs.10,000 in HDFC Progrowth Plus.

• Switches are allowed every year for switching between funds under HDFC Life Progrowth Plus.

• Future premiums can be redirected to a new fund via the Premium Redirection option in the plan. 

Additional Features for Riders in HDFC Life ProGrowth Plus Plan

• Premium paying frequency can be changed as per requirement under HDFC Progrowth Plus.

• There is an inbuilt Accidental Death Benefit Rider under the Extra Life Option in the plan.

Exclusions in HDFC ProGrowth Plus Plan

• In HDFC Life Progrowth Plus, the benefit paid in case of suicide within 12 months of policy inception or revival is the fund value as on that date.

• In case of rider benefit under HDFC Progrowth Plus Plan, death 3 months after the accident or accidental death due to intentional self-inflicted injury, alcohol abuse, war, aviation, and acts of criminal nature or due to participating in hazardous activities is excluded. 

Documents Required for HDFC Life Progrowth Plus Plan

Policyholders have to fill up an ‘Application form/ proposal form’ for HDFC Life Progrowth Plus plan with accurate medical history and submit KYC documents. The documentation procedure is fairly simple and one requires to submit the following self-attested documents:

• Age Proof: Any one among Birth Certificate, Passport, Permanent Driving License, PAN Card, School Certificate is required for the HDFC Life Progrowth Plus cover

• Address Proof: The available options for HDFC Progrowth Plus policies are:

  • Telephone, Electricity, Credit Card or Water Tax Bill (all not over 3 months old),

  • Lease Agreement, Gas Connection Card or Letter, or Bank Statement (not over 1 month old),

  • Passport, Permanent Driving License or Ration Card

• Income Proof: The income proof documents admissible for HDFC Progrowth Plus are ITR Form 16 (not over 3 years old) or Salary Slip (not over 3 months old). People are advised to contact sales representative for more details

• Identity Proof: The following documents are approved for this under HDFC Life Progrowth Plus – PAN Card, Voter ID Card, Permanent Driver License, Passport or Ration Card with photo

• Payment: The payment for HDFC Progrowth Plus has to be made by Cheque or Demand Draft in favour of ‘HDFCSLIC’ payable at par

• One Photograph (passport size) is required for the HDFC Life Progrowth Plus plan 

Myths Surrounding Investment in ULIPs

Unit linked insurance plans (ULIP) such as HDFC Life Progrowth Plus enable one to enjoy a life cover and also benefit from investing in different types of funds as per an individual’s risk appetite. In other words, products such as HDFC Progrowth Plus combine insurance and investment in one instrument. It allows one to effectively channelize savings and counter the effects of inflation by making the most of equities and other asset classes. 

In spite of this, there exist many myths and misconceptions with respect to the objectives, liquidity, returns, functioning, pricing etc. of ULIPs. Common ones are discussed and debunked below: 

Myth 1: ULIPs are costly due to higher costs

Fact: It is commonly believed that ULIPs such as HDFC Life Progrowth Plus are a costly investment product due to high inherent charges, particularly due to premium allocation and fund management charges. The reality is that ULIPs like HDFC ProGrowth Plus have undergone several changes in recent years and IRDAI (Insurance Regulatory and Development Authority of India) has brought down the annual charges to 3% for the first 10 years of holding and 2.25% if the ULIP is held for more than 10 years. Overall charges cannot exceed the prescribed limit set by the regulator. ULIPs are affordable and cost much less than before. If you are looking to invest in a ULIP, HDFC Life Progrowth is the perfect fit for you. 

Myth 2: ULIPs are risky financial instruments

Fact: Another myth about investing in ULIPs is that they are risky and unsafe investment products because they only invest in equities. ULIPs like HDFC Life Progrowth Plus do not only invest in equities but in other asset classes too, ranging from money market instruments, cash and deposits to liquid to government securities, fixed income instruments and bonds. Insurance companies provide different funds, each with different fund composition in terms of exposure to various asset classes. Depending on one’s risk appetite, one may choose an aggressive growth fund with high exposure to equities having a high risk and return rating or a relatively conservative debt fund with high exposure to debt instruments offering stability from among the ones offered under HDFC Life Progrowth Plus. One may even opt for a balanced fund which comprises of a mixture of equity and debt, balancing risk with stability. ULIPs like HDFC Progrowth Plus also allow switching i.e. the option to switch between available funds as per changing risk appetite, change in market conditions etc. 

Myth 3: Addition funds cannot be invested in ULIPs

Fact: The reality is that ULIPs such as HDFC Life Progrowth Plus allow investment of additional / surplus funds as and when they are available by way of top-up premiums. One may start with a lower premium ULIP like HDFC ProGrowth Plus and top it up anytime during the tenure of the policy. 

Myth 4: Once taken, a ULIP cannot be discontinued

Fact: This is a myth because the fact is that ULIPs like HDFC Life Progrowth Plus can be discontinued after a minimum ULIP lock-in period of 5 years without paying any surrender charges. 

Myth 5: The life cover in ULIPs is linked to market performance and it decreases when market dips

Fact: This is another common misconception that the life cover in a ULIP such as HDFC Life Progrowth Plus is linked to capital markets and that it increases or decreases with market volatility. The reality is that the life cover is not linked to market performance at all. It stays the same in bear or bull market conditions. In the event of death of the insured, an ULIP like HDFC Progrowth Plus pays the higher of the life cover or fund value to the dependent family members/nominees of the policyholder. 

Myth 6: ULIPs do not provide health or accident cover

Fact: Additional optional riders like Accidental Death Benefit, Waiver of Premium, Family Income Benefit and Hospital Cash Benefit enhance the scope of HDFC Life Progrowth Plus and other unit linked insurance plans. Also, partial withdrawal is available helping take care of unforeseen emergencies. Riders looking for a ULIP plan should consider HDFC Progrowth Plus.

Myth 7: ULIPs offer low returns

Fact: It is a myth that ULIPs like HDFC Life ProGrowth Plus give low returns. The reality is that they give much higher returns as compared to many other investment options like a savings accounts, endowment policies, etc. If say the funds offered under HDFC Life Progrowth Plus are chosen judiciously and one takes the advantage of switching and redirection of funds / premiums, one can be sure that the fund growth will be healthy with high returns. 

Charges Levied Under HDFC Progrowth Plus

Certain charges help the company provide better returns and value to customers. Charges under HDFC Progrowth Plus policy are levied to cover the cost of administration and other costs. Different charges are explained in detail below: 

1. Premium Allocation Charge under HDFC Life Progrowth Plus

   This charge under HDFC Progrowth Plus is based on premiums and depends on the year of allocation. The premium allocation charge percentage is highest in the first year and decreases over time in the HDFC ProGrowth Plus. The remainder money after deducting this charge from annualized premiums is invested to buy units. The remaining percentage of annualized premium is called premium allocation rate. Both, premium allocation rate and premium allocation charge are guaranteed for the full HDFC Life ProGrowth Plus policy term. 

2. Fund Management Charge under HDFC Life Progrowth Plus

   It is charged daily and the daily unit price under HDFC Progrowth Plus is calculated after deducting the fund management charge. 

3. Policy Administration Charge under HDFC Life ProGrowth Plus

   Policy administration charge is a percentage of annualized premium and guaranteed for full policy term of HDFC Progrowth Plus. It is deducted monthly to provide administration for the HDFC Progrowth Plus policy. The charge is taken by cancelling proportionate units from every fund chosen available in HDFC Life Progrowth Plus. 

4. Mortality Charge under HDFC Life ProGrowth Plus

   This is a monthly charge towards the cost of life insurance cover under HDFC Progrowth Plus. The charge is guaranteed for the full policy term of HDFC Progrowth Plus. It is exclusive of any expense loadings levied either by cancellation of units proportionately from each of the fund(s) chosen in HDFC Progrowth Plus or by debiting the premium but not both. 

5. Risk Benefit Charge under HDFC Life ProGrowth Plus

   This is towards the cost of morbidity benefit offered like Extra Life Benefit under HDFC Life Progrowth Plus. It is exclusive of any expense loadings levied either by cancellation of units or by debiting the premium but not both. This charge may be levied at the beginning of each policy month from the fund. This charge will be taken in addition to the mortality charge only in case one is covered for the benefit under HDFC Life Progrowth Plus.

In Conclusion

HDFC Life ProGrowth Plus Plan is an excellent investment option to secure your future financially. It offers various benefits such as life cover, guaranteed additions, and flexibility to choose the premium payment term. Moreover, the plan also provides an option to invest in the HDFC Life Opportunities Fund, which can give higher returns compared to traditional investment options.

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