This is review piece on HDFC SL CREST, a unit linked insurance plan (ULIP). It’s a combination of insurance covers and investment schemes. The piece examines the features, pros and cons of the policy. And also informs the potential investor of the eligibility required.
With demonetization famously hitting wallets all over the country, the usual spenders have suddenly been turned into the ‘responsible older sibling’. Amidst the scramble to invest wisely, Life Insurance emerged as a viable avenue for the investors given the steep rise of total first year premium by more than double from Rs. 7, 500 Crores in November 2015 to Rs. 16,500 Crores in November 2016 as per latest IRDA Reports.
With Unit Linked Insurance Plan (ULIP) is trending again for benefits of a mutual fund and also the cover of an insurance plan. This increases the chances of a good market return and also an insurance coverage (depending on the premium paid).
HDFC SL Crest, a unit linked insurance plan (ULIP), is reviewed as a complete package with a twofold advantage of providing a parking for your investments and also adequate benefit of insurance. Although ULIPs represent higher risk but HDFC SL Crest lets the policy holder steer his own investment according to his own comfort and risk appetite.
Keeping the requirements of tax savings and veritable profitable returns in mind, HDFC SL Crest is fast gaining clientele given its two attractive policies for investment, that is, Free Asset Allocation and highest NAV (Net Asset Value) guaranteed scheme.
How shiny is the bike!
¨ Four options for Free Asset Allocation; Option to invest or switch among any 4 available funds.
¨ Choice offered to select a Sum Assured between multiples of 10 to 20 times of annual premium.
¨ Option of EMI for HDFC credit card holders.
¨ Shorter and concise medical questionnaire.
What’s new?
ü Tax Benefits under sections 80C and 10(10D) of the Income Tax Act 1961.
ü Revival of discontinued policies is possible
ü Convenient modes for payment of premium, i.e. Credit card, internet banking, cheque etc.
ü Shorter investing time period (5years) for a longer period of market returns (10 years).
ü In case of surrender after the expiry of 5 years
Care for your loved ones, even in your absence…
In case of sudden demise the appointed nominee is entitled to the sum assured as the death benefit according to the following circumstances:
- If the death occurs before attainment of age of 60 years the nominee is entitled to higher of :
i) Sum Assured minus all partial withdrawals spanning over immediate last 2 years before death.
ii) Total Fund Value
- If the death occurs on or after attainment of age of 60 years, nominee is entitled to higher of:
- Sum Assured minus all partial withdrawals made spanning the period after attaining 58 years of age.
- Total Value Fund
Get’em While You’re Young
HDFC SL Crest urges investors to start young and stay in for the long run keeping entry age bracket between 14 to 55 years. While the policy term is 10 years, the period for premium payment is 5 years and the maturity age is 65 years.
Win Some, Lose Some.
HDFC SL Crest indeed offers well planned investing stratagem, however the structure of deductable charges which provide benefit costs is more or less the only discernable hitch. The charges are:
1. Premium allocation charge
2. Policy Administration charge
3. Fund management charge
4. Mortality charge
5. Partial Withdrawal Charge
6. Premium redirection charge
7. Switching charge
8. Discontinuance charge
9. Miscellaneous charge
While reviewing, in comparison to mutual funds where now the relative costs are next to nil, HDFS SL Crest Plan loses the round due to high costs for each installment being paid by the policy holder.
Trump-ing Naysayers!
While reviewing policies, the chances are you having an epiphany (probably even hear grandmotherly voice in your head!) voicing the age old warning not to mix investments and insurance. The let naysayer be heeded, and with HDFC SL Crest plan your own strategy by either sticking to fund moderate risk or high risk.
HDFC SL Crest does try to place the policyholder on the driver’s seat and given the leeway provided it does offer a comfortable investment experience.