HDFC SL Crest

HDFC SL Crest - Eligibility Criteria's

HDFC SL Crest - Key Features 

• SL Crest is a HDFC Unit Linked Insurance Plan with Limited Pay option of premium payment 

• HDFC SL Crest allows investment in the 4 fund options as follows : 

  • Blue Chip Fund: This type of funds allows your investment to get exposed to large-cap equities and equity related securities is very high, up to 80 to 100 per cent in equity and below 20 per cent in money market tools, deposits, cash, and funds. The HDFC SL Crest Blue Chip Fund offers the possibility of very high returns and entails very high risk. 

  • Opportunities Fund: Investment in mid-cap equities as well as in equity related securities again is very high, between eighty to hundred per cent  in equity asset class while only zero to twenty per cent in money market instruments, deposits, cash, and liquid funds. The HDFC SL Crest Opportunities Fund has a ‘very high’ risk and return rating. 

  • Balanced Fund: The fund composition is 0% to 20% in money market instruments, cash, deposits and liquid fund; 0% to 60% in government securities and fixed income securities; and between 40% to 80% in equity asset class. The dynamic equity exposure is done to enhance the returns while the debt allocation minimizes the volatility of returns. The risk and return rating of the HDFC SL Crest Balanced Fund is pegged at ‘moderate to high’. 

  • Income Fund: It offers higher potential returns due to higher duration and credit exposure. The fund composition consists of 0% to 20% invested in money market tools, deposits, cash, and liquid funds and 80 – 100 per cent in government securities and fixed income securities. The HDFC SL Crest Income Fund has a ‘moderate’ return and risk rating. 

• The flexibility to choose the sum assured amount is offered by HDF SL Crest plan. The sum assured can be anything between 10 to 20 times the annualized premiums. 

• There is no upper limit on premium 

• Just a short medical questionnaire has to be filled for availing the HDFC SL Crest Plan. No medical tests are required. 

• The HDFC SL Crest plan offers EMI facility to those holding a HDFC Bank credit card. 

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HDFC SL Crest - Benefits

• On maturity, the total fund value will be offered to the insured person.

•  After maturity, the benefits are paid out in equal instalments over a period of five years.

• On the unfortunate death of the life insured, higher of the sum assured and the fund value will be paid out to the nominee appointed by the policyholder.

• The minimum death benefit would be equal to 105% of the total premiums paid

• On payment of premium for only 5 years, HDFC SL Crest policyholders enjoy a policy term of 10 years

• Section 80C and section 10(10D) of the Income Tax Act allows the policyholder to enjoy Tax Benefits on the premiums paid and on claims respectively. 

HDFC SL Crest - Policy Details

• Grace Period: 30 days grace period for premium payment is allowed under the HDFC SL Crest plan 

• Surrender Benefit or Policy Termination: After the completion of initial 5 years, the policyholder is allowed to surrender the policy. If the policy is surrendered before the completion of 5 years, the fund value will be paid out but the discontinuation charge will be deducted. The discontinuation policy fund is subject to earn at least 4% per annum. After the completion of 5 years, the fund value in the discontinued policy fund will be paid out to the policyholder. Hence, if the policy is surrendered after 5 years, the entire fund value will be paid out without any deduction.

• Free Look Period: If you are not pleased with terms, conditions and the coverage provided under the policy, you can cancel the HDFC SL Crest policy within 15 days of receipt of the policy documents, provided no claim has already been filed. 

Inclusions

• HDFC SL Crest Plan allows partial withdrawals annually, with  a minimum value of Rs.10,000/-.

• Fund switching is allowed every year. You can switch between funds based on your investment strategy.

• Premium Redirection is also allowed under HDFC SL Crest to redirect future premiums to another chosen fund. 

Exclusions

If the life insurer commits suicide within 12 months from the inception or revival of the policy, the fund value as on that date will be paid out under HDFC SL Crest Plan.

Charges

Different charges are levied to cover administration costs as well as cost of providing benefits in order to provide better returns and value for money to customers over the long term. 

• Premium Allocation Charge: This charge is based on the premium and is guaranteed for the entire duration of the premium payment term of the HDFC SL Crest plan. The charge percentage is highest in the first 2 years and decreases towards the end of the premium payment term. 

• Fund Management Charge (FMC): HDFC SL Crest plan levies a fund management charge at the rate of 1.35% per annum and this is factored in the daily unit price. 

• Policy Administration Charge: A policy administration charge levied at the rate of 0.31% per month of the original annual premium is deducted monthly in HDFC SL Crest plan. It increases at the rate of 5% on every HDFC SL Crest policy anniversary, subject to a maximum charge of Rs. 500 per month. This charge is taken by the cancellation of  proportionate units from each chosen fund of the HDFC SL Crest ULIP plan. 

• Mortality Charge: This charge is collected for providing a death cover in the HDFC SL Crest policy. The amount of charge is dependent on the policyholder’s age and level of cover taken under the HDFC SL Crest plan. 

• Miscellaneous Charges: Rs. 250 per request may be debited for any policy alteration request in HDFC SL Crest. 

Additionally, the following charges are levied if certain requests are made. 

• Partial Withdrawal Charge: A request for partial withdrawal under the HDFC SL Crest plan attracts a charge of Rs. 250 per request, else Rs. 25 per request will be charged if the request is made through the web portal of the company. This is imposed on the unit fund at the time of partial withdrawal of the HDFC SL Crest fund during the contract period. 

• Switching Charge: Similarly, a HDFC SL Crest fund switch request is charged at the time of effecting the switch at the rate of Rs. 250 per request. The cost is Rs. 25 per request if the request is made through the company’s web portal. 

• Premium Redirection: Premium redirection request attract a charge of Rs. 250 per request under HDFC SL Crest plan. If done through the company’s website, the HDFC SL Crest policyholder is charged Rs. 25 per request. 

• Discontinuance Charge: This is charged if the HDFC SL Crest plan is discontinued before maturity. However, there is no discontinuance charge after the 5th policy year of the HDFC SL Crest plan. 

HDFC SL Crest - Documents Required 

HDFC SL Crest Policyholder has to fill up an ‘Application form/ proposal form’ with accurate medical history and submit KYC documents. 

Which Investor Class Are ULIPs Best Suited For?

ULIPs are an innovative insurance product which provide dual benefit of life insurance cover and investments. They will work for just about every type of investor, provided investments are made judiciously. 

Individuals with Medium to Long Term Investment Time Frame

The returns on unit linked insurance plans are best over a relatively long period of time. People who are comfortable in staying invested for medium to long term investment horizon stand to benefit most from investments in ULIPs. 

ULIPs have a compulsory lock in period of 5 years, so one cannot withdraw before the period elapses. They help in creating a corpus for long term requirements such as a child’s higher education needs, child’s marriage-related expenditure, retirement needs, etc. 

People with Different Risk Appetites

ULIPs cater to all kinds of people – risk averse investors to those with low risk taking ability to individuals with high risk appetites. Insurance companies offering unit linked plans like HDFC SL Crest, offer a range of fund options to choose from – debt, equity and a mixture of debt and equity in different proportions to cater to all categories of customers. 

Young people who have aggressive risk appetites can opt for equity funds which offer highest returns as they are directly linked to the capital markets, for instance the Blue Chip or the Opportunities Fund in the case of HDFC SL Crest. After marriage and having children, one may choose a mix of debt and equity to balance risk with safety, eventually moving to completely stable form of investment i.e. debt. 

ULIPs serve as a good avenue for investment to people as they provide the opportunity of superior market-linked returns in addition to providing an insurance cover. 

Active Investors

Hands-on investors who like operational control and the ability to adjust their investments are the best fit for ULIPs. ULIPs provide the flexibility of switching between debt, equity and balanced funds. Individuals who like to closely monitor their investments and make changes based on performance of the market will find a unit linked insurance plan as one of the best financial investment instrument. 

Investors Across Various Life Stages

ULIPs make a good choice of investment for investors across different stages in life. Diverse plans are available as per the requirements and personal situation of different individuals. 

Unmarried individuals in their 20s who have just started out in life will find it beneficial to invest virtually fully in equity funds as these offer maximum returns. The need of the hour is wealth creation and accumulation, and investment in market-linked funds help fulfil this need. 

Similarly, the need for wealth creation for married people in their early 30s will be high and they will do well with investing in a growth fund like the Blue Chip or Opportunities Fund of HDFC SL Crest. 

The need for protection and asset creation for children are priorities for married people with children. ULIPs with balanced funds are suitable for them. 

As one nears retirement, individuals will do well by selecting debt funds which offer stability and entail very low risk. In such cases, investors can opt for the HDFC SL Crest Income Fund. 

Benefits of Unit Linked Insurance Plans (ULIPs)

Unit Linked Plans offer a unique combination of protection with investments. Noteworthy features and benefits of unit linked life insurance policies are mentioned below: 

• Provide Flexibility and Diversity in Investments: ULIPs offer a range of investment options – high, medium and low risk, depending on the risk taking appetite of an individual. A portion of the life insurance premium is invested in debt or equity instruments to earn returns for the policyholder. They allow flexibility to choose the sum assured amount as well as the investment ratio in the annual targeted premium. One may even increase the investible amount to benefit from investment opportunities presented by an increase in income or opportunity in external environment. 

• Transparency: ULIPs are one of the most transparent insurance-cum-investment products available in the market. All plan details are shared beforehand with a prospective customer such as the charge structure, value of investment and expected internal rate of return (IRR). Policyholders are kept abreast of the status of their investment portfolio through account statement summary, quarterly investment portfolio and daily NAV reporting (published on websites of insurance companies). 

• Offer Liquidity and Help Meet Emergency Requirements: Unit linked insurance plans are liquid in nature as they allow partial withdrawals to take care of emergencies and unforeseen requirements. One can withdraw money from the ULIP fund after a period of 5 years from the start date, retaining only the minimum stipulated amount.

• Act As Security: They also serve as security when one wants to take a loan. One receives a certain percentage of the value of the fund as loan. This normally does not exceed 50%. 

• Encourage Systematic Investments: ULIPs help inculcate a habit of saving regularly. They encourage investing in a disciplined manner. By investing small amounts periodically over a period of time, one stands to benefit from the average unit costs evening out highs and lows of market price fluctuations. 

• Provide Funds for Important Stages in Life: Different stages in life require significant sums of money. These may include child’s higher education, child’s marriage, building a house, retirement needs, etc. ULIPs help in providing funds at these crucial junctures by creating a corpus by investing in growth (equity), balanced, cash and debt funds. Partial withdrawals give access to much needed money to address these important needs.