Term insurance is one of the two covers – the other being a medical policy – that is an essential product to secure your financial future.
At the start of your career or most certainly when you settle down into a job, marry, raise a family and take loans, you need to take a term policy that, at the minimum, covers all your liabilities in case of your unfortunate demise.
Among the many policies offered by insurers, HDFC Life has partnered with Policybazaar to offer a new term cover: HDFC Life Click 2 Protect Ultimate.
Other than the usual benefits offered, this new policy has claimed hassle-free and 100 per cent claim assurance. Some interesting features include terminal illness benefits, a smart exit option, and the choice to convert the premium payment term from regular pay to limited pay mode.
New product features
The basic premise of HDFC Life Click 2 Protect Ultimate is still the same as any term cover.
Based on the age, medical history and sum assured required, premiums are calculated. These premiums are to be paid till the time the policyholder wants the cover. In case of the unfortunate death of the policyholder during the coverage period, the sum assured is paid to the nominee.
Since As a 100 per cent claim assurance is proposed, underwriting would be fairly rigorous and medical tests would be insisted.
The minimum basic sum assured is ₹1 crore, while the maximum basic sum assured us ₹3 crore in the policy.
There is a ‘return of premiums option’ offered to policyholders as well, wherein all premiums paid are returned upon survival of the policy period.
Then there are other interesting features.
Sum assured on death, up to a maximum of ₹2 crore, will be paid (accelerated) upon of diagnosis of any terminal illness. Two medical practitioners must certify that the said terminal illness is likely to lead to the death of the policyholder within six months. This feature is useful as it would help in giving palliative care to the policyholder and also help steady household cashflows due to the inability to work and earn.
There is thus a six-month waiting period from the commencement of the policy for the terminal illness benefit to be paid.
There is a smart exit option for those paying premiums regularly. Of course, this option can be exercised after the twenty fifth policy year, but not in the last five policy years. This option allows you to receive all the premiums paid till the year you choose to exit the policy. Of course, this option would not be allowed if the policyholder has chosen the ‘return of premiums’
Finally, there is the option to outstanding regular premiums (premiums to be paid in future) into any limited premiums period available under the product. Alterations would be allowed as per the product guidelines. Of course, the premium rates under these circumstances would change accordingly.
Should you buy the policy?
HDFC Click 2 Protect Ultimate has indicated rigorous underwriting to ensure assured claim experience, which necessitates medical tests, as mentioned earlier.
We take the case of a male, aged 40. He opts for a ₹1 crore term cover. It is assumed, 7 premiums for a period of 20 years, till he turns 60.
The annual premium in this case works out to ₹25,638 (including 18 per cent GST). When Policybazaar data is taken for term insurance covers of similar amount, the premiums charged range from around ₹20,000 to ₹27,000 or higher when GST is added.
HDFC Click 2 Protect Ultimate is priced on the higher side. But given the unique features and the assertion of a 100 per cent claim assurance, investors can consider buying the cover.
The premiums rise if other options are taken. For example, if payment for the person mentioned earlier is limited to 15 years for a 20-year cover, the premium rises to ₹31,637. When the return of premiums option is availed, the annual premium goes up to ₹67,713.
Policyholders can skip these options as a regular full-term cover would suffice for all practical purposes. A term policy is only to cover financial risks and not an investment to be recovered.
The term cover can be purchased from HDFC Life’s website among other avenues.
Key features
Terminal illness benefits
Premium payment in regular or limited mode
