HDFC Life Wealth Elite Plan

What is HDFC Life Wealth Elite Plan?

HDFC Life Wealth Elite is a Unit-Linked Insurance Plan (ULIP) designed for high-net-worth individuals (HNIs) by HDFC Life. This plan combines long-term wealth creation through market-linked returns with life insurance coverage. 

This best investment plan for people with high net worth invests a portion of your premium towards life insurance while the remaining amount in the stock market. The returns you get will depend on the performance of the chosen funds.

Features of HDFC Life Wealth Elite Plan

• High Life Cover: The plan offers a death benefit based on the higher of 10 to 201 times the annual premium, fund value, or 105% of premiums paid. For those joining at 45 and above, the maximum death benefit is 7 or 10 times the annual premium.

• Investment Options: You can choose from equity and debt funds, with automatic asset allocation based on your age and proximity to maturity.

• Flexibility: You can switch between funds unlimited times during the policy term. You can also opt to receive the maturity amount in installments over a five-year period.

• Tax Benefits: Premiums eligible for a tax deduction of up to ₹1.5 lakhs under Section 80C. Maturity amount is tax-free for premium payments below ₹2.5 lakhs under Section 10(10D).

Eligibility Criteria

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Benefits of HDFC Life Wealth Elite Plan

1. Maturity Benefit:

   • Upon policy maturity, you get the Fund Value on the maturity date.

   • The maturity benefit is calculated as: (NAV at maturity X number of units at maturity).

   • You have two options for utilizing the maturity benefit:

     • Lump Sum: Receive the fund value as a lump sum on the maturity date.

     • Settlement Payout: Receive the fund value in equal monthly, quarterly, half-yearly, or annual instalments over 5 years (referred to as the settlement period).

2. Death Benefit:

   • HDFC Life Wealth Elite provides financial protection in case of an unfortunate event.

   • After the risk commencement, the higher of Sum Assured or 105% of premiums paid or fund value is payable to the eligible person in case of the life assured's death during the policy term.

3. Partial Withdrawal Benefit:

   • You can make unlimited partial withdrawals after completing 5 policy years.

   • Partial withdrawals are subject to conditions such as a minimum amount of ₹5,000 and a maximum amount equal to 25% of the fund value.

4. Fund Switching:

   • You can switch between funds based on equity market performance.

   • Unlimited free switches are allowed during the policy term and during the settlement payout.

5. Premium Redirection:

   • Premium redirection allows you to allocate future premiums differently from the prevailing fund composition.

   • Unlimited redirections are allowed free of charge in a policy year.

6. Settlement Payout:

   • This option allows you to receive the maturity amount in equal monthly, quarterly, half-yearly, or annual instalments over 5 years.

   • The first instalment is payable on the maturity date.

7. Tax Benefits:

   • You are eligible for tax benefits on premiums paid and maturity proceeds under Section 80C and Section 10(10D) of the Income Tax Act, 1961. 

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Investment Strategies in HDFC Life Wealth Elite Plan

1. Self-managed Option:

   You can choose from 8 investment funds tailored to your needs and risk tolerance. It spans a diverse mix of debt and equity investments ranging from 100% debt to 100% equity.

2. Systematic Transfer Plan (STP):

   Wealth Elite allows you to set up a Systematic Transfer Plan (STP). With STP, you can invest a fixed amount regularly from one fund (typically a debt fund) to another fund (typically an equity fund) This is a strategy called Rupee Cost Averaging, which can help you benefit from market volatility by buying more units when the price is low and fewer units when the price is high.

3. Automatic Asset Allocation:

   This feature is not available along with STP in the HDFC Life Wealth Elite Plan. However, it can be a good option if you do not want to manage the allocation yourself. This strategy will automatically adjust your investment between equity and debt funds to maintain the target asset allocation you choose.

Policy Details of HDFC Life Wealth Elite Plan

• Grace Period: It is the extra time given by the company after the payment due date, where you can still pay your premium without any penalty. During this time, your policy will remain active and will have full coverage.

• Policy Discontinuance: This happens when you surrender your policy or do not pay the premium within the grace period.

• Lock-in Period: During the first five years of the policy, the company cannot give you the money from a discontinued policy except in case of death. After that, if you stop paying premiums, your fund value, minus charges, goes into a special fund.

• Revival: You can bring back a lapsed policy within three years of missing a premium. The process and benefits differ based on when the policy was discontinued.

• Surrender: At any point during the policy, you can choose to surrender it. If done during the lock-in period, the fund value minus charges goes into a special fund. After the lock-in period, you get the fund value as on the surrender date.

• Free Look Period: If you are not happy with the policy terms, you can cancel it within a certain period by returning the policy document. You will get back what you have paid minus certain deductions.

• For Minor Life Assured: If the insured is under 12 years old, full death benefits start from the end of the second policy year. Until then, only the fund value is payable in case of death.

• Assignment Provisions: Any assignment must follow the rules of the Insurance Act 1938.

• Nomination Provisions: Nomination should follow the guidelines of the Insurance Act 1938.

How Does the Plan Work

Step 1: Policy Setup

• Select your policy term, premium amount, and payment frequency.

• Choose where to invest your premium among different funds.

• Decide the amount of life cover you want.

• Understand that charges may vary based on your choices.

Step 2: Fund Management and Goal Achievement

• Maximize your returns by actively managing your funds through fund switching and redirection.

• Achieve your short-term financial goals by making partial withdrawals at different milestones.

Step 3: Maturity and Life Cover Benefits

• Receive the maturity amount according to the chosen maturity option upon policy completion.

• In the unfortunate event of the policyholder's death, the beneficiary will receive the life cover amount.

Exclusions

HDFC Life Wealth Elite Plan excludes the full death benefit payout in case of death by suicide within the first 12 months from the policy start date or from the date of revival (after a lapse). In such instances, the beneficiary will receive only the fund value accumulated in the policy.