Canara HSBC Secure Bhavishya Plan: Good or Bad? An Insightful ULIP Review
Is the Canara HSBC Secure Bhavishya Plan the key to a worry-free retirement, or does it fall short?
Can the Canara HSBC Secure Bhavishya Plan strike the perfect balance between wealth creation and financial protection?
Can the Canara HSBC Secure Bhavishya Plan truly offer financial security with a steady income?
In this review, we will analyse its features, benefits, and drawbacks to help you make an informed decision.
What is the Canara HSBC Secure Bhavishya Plan?
What are the features of the Canara HSBC Secure Bhavishya Plan?
Who is eligible for the Canara HSBC Secure Bhavishya Plan?
What are the benefits of the Canara HSBC Secure Bhavishya Plan?
What are the fund options in the Canara HSBC Secure Bhavishya Plan?
What are the charges in the Canara HSBC Secure Bhavishya Plan?
Grace period, Discontinuance and Revival of Canara HSBC Secure Bhavishya Plan
Free Look Period of Canara HSBC Secure Bhavishya Plan
Surrendering Canara HSBC Secure Bhavishya Plan
What are the advantages of the Canara HSBC Secure Bhavishya Plan?
What are the disadvantages of the Canara HSBC Secure Bhavishya Plan?
Research Methodology of Canara HSBC Secure Bhavishya Plan
Benefit Illustration – IRR Analysis of Canara HSBC Secure Bhavishya Plan
Canara HSBC Secure Bhavishya Plan Vs. Other Investments
Canara HSBC Secure Bhavishya Plan Vs. Pure-term + PPF/ELSS
Final Verdict on the Canara HSBC Secure Bhavishya Plan
Canara HSBC Secure Bhavishya Plan qualifies under the Recognized Overseas Pension Schemes (ROPS). Canara HSBC Oriental Bank of Commerce Life Insurance Secure Bhavishya Plan is a Non-participating Unit Linked Pension Plan.
It provides the benefit of equity participation to potentially enhance your retirement corpus, and at the same time offers ‘capital protection’ to your retirement corpus.
| Parameter | Minimum | Maximum |
| Entry Age | 25 years | 70 years |
| Vesting Age | 40 years | 80 years |
| Premium paying term | Regular Pay: 10 years Limited pay: 5 years | Regular pay: Equal to the policy term Limited pay: 34 years |
| For Single pay – One-time premium only For policy sourced under QROPS, only a Single pay option is available | ||
| Minimum premium | For Single pay -₹ 3,00,000 For Regular / Limited pay: Annual Premium (for premium payment term of 5 to 9 years): ₹ 50,000 Annual Premium (for premium payment term of 10 years and above): ₹ 25,000 Monthly Premium (for premium payment term of 5 to 9 years): ₹ 5,000 Monthly Premium (for premium payment term of 10 years and above): ₹ 3,000 For Top-ups -₹ 10,000 | |
| Policy term | 10 years | Regular/Limited pay: 35 years Single pay: 30 years Subject to 80 less the vesting age |
Higher of
The nominee/claimant shall have the option to utilize the death benefit in one of the following ways:
Higher of
Options available on Vesting
Loyalty Additions as a percentage of the average Fund Value of 60 monthly policy anniversaries preceding the anniversary for the policy month shall be added to the fund at the end of every five policy years, starting from the 10th policy year.
Loyalty addition of 6.1% at the end of the 10th year and thereafter 2.5% at the end of every 5 years
There are three fund options in the Canara HSBC Secure Bhavishya Plan. The investment and the risk profile of each fund are given below.
| Fund Name | Asset Allocation | Risk profile | ||
| Equity | Debt Securities | Money market instruments | ||
| Pension Growth Fund | 10-60% | 20-100% | 0-80% | Medium to High |
| Pension Balanced Fund | 0-30% | 20-100% | 0-80% | Medium |
| Pension debt Fund | 0% | 20-100% | 0-80% | Low |
As per the investment strategy of the funds, the Policyholder’s monies (including Top-Up premium) shall be invested in the Pension Growth Fund only up to the Policy Term (PT) minus 6 years.
PT minus 5 is a transition year during which Funds will be transferred from the Pension Growth Fund to the Pension Balanced Fund in a systematic manner.
You have the option to switch any proportion of funds from the Pension Balanced Fund to the Pension Debt Fund only in the last 5 policy years.
It will be deducted upfront and will be levied through reduced premium allocation to the fund.
| Policy year | Annual Mode | Monthly mode |
| 1 | 8.40% | 7.25% |
| 2 to 3 | 6.40% | 5.00% |
| 4 to 10 | 5.40% | 5.00% |
| Single pay | 2.00% | |
| Top-up | 2.00% | |
For Regular/Limited pay: 0.05% of the annualized premium is chargeable on a monthly basis during the first five policy years. Thereafter it will increase by 20% every five years starting from the 6th policy year. However, this charge will not exceed ₹500 per month in any case.
Single pay: 0.05% of Single Premium (for Single premium <3 Lac) and 0.03% of Single Premium (for Single Premium >=3 Lac) chargeable on a monthly basis during the first five policy years, subject to a cap of ₹500 per month.
Post five years, there will be no Policy Administration Charges in the Single pay variant.
It shall be levied on a monthly basis by way of cancellation of Units at the beginning of each month. The Mortality Charge shall apply to the sum at risk which shall be computed as follows:
| Age | 30 | 40 | 50 | 60 |
| Male | 1.161 | 1.983 | 5.44 | 12.687 |
| Female | 1.104 | 1.591 | 3.923 | 10.148 |
Fund Management Charge and Investment Guarantee Charge is expressed as a percentage of Fund Value and is levied at the time of computation of the NAV14 by adjusting the Unit Price.
| Funds | Fund Management Charge (per annum) | Investment Guarantee Charge (per annum) |
| Pension Growth Fund | 1.35% | 0.25% |
| Pension Balanced Fund | 1.35% | 0.10% |
| Pension debt Fund | 1.00% | Nil |
| Pension Discontinued fund | 0.50% | Nil |
It is levied on the Fund Value/Annualized premium/ Single premium on account of surrender/discontinuance of the Canara HSBC Secure Bhavishya Plan policy. It depends on the year of discontinuance, premium and policy term.
It will be ₹250 per switch. However, the first 6 switches in a policy year are free of charge. This charge can be revised to a maximum ₹500, with prior approval of IRDAI.
Impact of Charges: These charges act as additional costs for investors. Since some charges continue throughout the Canara HSBC Secure Bhavishya Plan policy term, they gradually erode returns over time, reducing overall profitability.
You have a period of 30 days for the annual mode of premium payment and 15 days for the monthly mode of premium payment from the due date to pay your premiums, during which your life insurance coverage will continue.
Discontinuance of premium during the lock-in period: On the date of discontinuance of the policy, the Fund Value less applicable discontinuance charge shall be transferred to the Pension Discontinued Policy Fund and life cover ceases. The proceeds of the discontinued policy can be utilized by you at the end of the lock-in period.
Discontinuance of premium after the lock-in period: you can revive or surrender or convert the policy into a paid-up policy, in which case the policy will continue without any further premiums payable. The fund value is receivable at the end of the revival period or policy term whichever is earlier.
Commute up to the extent allowed under applicable prevailing laws and utilize the balance amount to purchase immediate annuity only from the insurer, which shall be guaranteed for life at the then prevailing annuity/pension rates.
Utilize the entire proceeds to purchase the single premium Pension plan only from the insurer.
Revival Period (not applicable for single pay option): It means 2 consecutive years from the date of Discontinuance of the Policy, during which period you will be entitled to revive the Canara HSBC Secure Bhavishya Plan Policy which was discontinued due to the non-payment of Premium.
In case the Policyholder does not agree with the terms and conditions of the Policy, they shall have the option to request for cancellation of the Policy within the free look period of 15 days (30 days in case the Policy is sourced through electronic mode or distance marketing mode) from the date of receipt of the Policy Document.
If the policy is surrendered within the first 5 policy years, the surrender value (Fund Value less applicable surrender charges) will be transferred to the Pension Discontinued Policy Fund.
The proceeds of the Pension Discontinued Policy Fund are available at the end of the Lock-in-Period.
Surrender after the lock-in period: The fund Value of the policy is payable at the end of the revival period or at the end of the Policy Term, whichever is earlier.
Utilisation of Surrender benefit
Commute up to the extent allowed under the Income Tax Act and utilize the balance amount to purchase immediate annuity only from the insurer, which shall be guaranteed for life, at the then prevailing annuity/pension rates.
Utilize the entire proceeds to purchase the single premium Pension plan only from the insurer.
The Canara HSBC Secure Bhavishya Plan is designed to help you save for retirement by making regular contributions to build a retirement corpus.
The plan aims to provide a steady income post-retirement, but there are restrictions on how the proceeds can be utilized. Let’s evaluate the plan’s returns based on the figures provided in the policy brochure.
A 40-year-old male invests ₹1.2 lakhs annually in the Canara HSBC Secure Bhavishya Plan for 20 years, with benefits vesting at the end of the Canara HSBC Secure Bhavishya Plan policy term.
At vesting, the accumulated corpus must be partially or fully used to purchase an annuity.
| Male | 40 years |
| Sum Assured | ₹ 24,24,000 |
| Policy Term | 20 years |
| Premium Paying Term | 20 years |
| Annualised Premium | ₹ 1,20,000 |
The policy illustrates two potential fund growth scenarios—4% p.a. and 8% p.a.—which are indicative and not guaranteed, as actual returns depend on market performance.
| At 4% p.a. | At 8% p.a. | ||||
| Age | Year | Annualised premium / Maturity benefit | Death benefit | Annualised premium / Maturity benefit | Death benefit |
| 40 | 1 | -1,20,000 | 24,24,000 | -1,20,000 | 24,24,000 |
| 41 | 2 | -1,20,000 | 24,24,000 | -1,20,000 | 24,24,000 |
| 42 | 3 | -1,20,000 | 24,24,000 | -1,20,000 | 24,24,000 |
| 43 | 4 | -1,20,000 | 24,24,000 | -1,20,000 | 24,24,000 |
| 44 | 5 | -1,20,000 | 24,24,000 | -1,20,000 | 24,24,000 |
| 45 | 6 | -1,20,000 | 24,24,000 | -1,20,000 | 24,24,000 |
| 46 | 7 | -1,20,000 | 24,24,000 | -1,20,000 | 24,24,000 |
| 47 | 8 | -1,20,000 | 24,24,000 | -1,20,000 | 24,24,000 |
| 48 | 9 | -1,20,000 | 24,24,000 | -1,20,000 | 24,24,000 |
| 49 | 10 | -1,20,000 | 24,24,000 | -1,20,000 | 24,24,000 |
| 50 | 11 | -1,20,000 | 24,24,000 | -1,20,000 | 24,24,000 |
| 51 | 12 | -1,20,000 | 24,24,000 | -1,20,000 | 24,24,000 |
| 52 | 13 | -1,20,000 | 24,24,000 | -1,20,000 | 24,24,000 |
| 53 | 14 | -1,20,000 | 24,24,000 | -1,20,000 | 24,24,000 |
| 54 | 15 | -1,20,000 | 24,24,000 | -1,20,000 | 24,24,000 |
| 55 | 16 | -1,20,000 | 24,24,000 | -1,20,000 | 24,24,000 |
| 56 | 17 | -1,20,000 | 24,24,000 | -1,20,000 | 24,24,000 |
| 57 | 18 | -1,20,000 | 24,24,000 | -1,20,000 | 24,24,000 |
| 58 | 19 | -1,20,000 | 24,24,000 | -1,20,000 | 24,24,000 |
| 59 | 20 | -1,20,000 | 24,24,000 | -1,20,000 | 24,24,000 |
| 60 | 30,33,692 | 46,38,675 | |||
| IRR | 2.18% | 5.93% | |||
At 4% growth, the vesting benefit is ₹30.33 lakhs, translating to an IRR of 2.18% as per the Canara HSBC Secure Bhavishya Plan maturity calculator.
At 8% growth, the vesting benefit is ₹46.38 lakhs, resulting in an IRR of 5.93% as per the Canara HSBC Secure Bhavishya Plan maturity calculator.
These IRRs are theoretical since the proceeds must be converted into an annuity, the rates of which are uncertain. This restriction on fund utilization reduces the plan’s attractiveness as an investment option.
If the full vesting benefit is used to purchase an annuity under the Smart Immediate Income Plan, the estimated annual annuity payouts as per the policy brochure are:
₹2.13 lakhs (for 4% growth)
₹3.26 lakhs (for 8% growth)
However, these annuity amounts are not guaranteed, as they depend on prevailing annuity rates at the time of purchase.
Key Drawbacks
Lack of Flexibility: The accumulated corpus must be used to buy an annuity, limiting access to funds for personal goals or alternative investments.
Uncertain Annuity Returns: Since annuity rates fluctuate, future payouts are unpredictable.
Lower Effective Returns: The IRR remains relatively low compared to other investment options.
Overall, given its restrictions and limited returns, the Canara HSBC Secure Bhavishya Plan may not be the most efficient choice for retirement planning.
The Canara HSBC Secure Bhavishya Plan restricts how you can utilize your accumulated retirement corpus. To overcome this limitation, an alternative investment approach can provide greater flexibility and higher returns.
Let’s explore a strategy that separates insurance and investment while maintaining adaptability.
Using the same parameters as the previous example, we compare the returns. A ₹25 lakh pure-term life insurance policy (aligned with the Canara HSBC Secure Bhavishya Plan’s death benefit structure) costs ₹18,800 annually for a 20-year policy term.
For Investment, investors can choose between equity and debt options to channelise the balance amount of ₹ 1.01 Lakhs. We compare PPF (debt) and ELSS (equity).
| Pure Term Life Insurance Policy | |
| Sum Assured | ₹ 25,00,000 |
| Policy Term | 20 years |
| Premium Paying Term | 20 years |
| Annualised Premium | ₹ 18,800 |
| Investment | ₹ 1,01,200 |
| Term Insurance + PPF | Term insurance + ELSS | ||||
| Age | Year | Term Insurance premium + PPF | Death benefit | Term Insurance premium + ELSS | Death benefit |
| 40 | 1 | -1,20,000 | 24,24,000 | -1,20,000 | 24,24,000 |
| 41 | 2 | -1,20,000 | 24,24,000 | -1,20,000 | 24,24,000 |
| 42 | 3 | -1,20,000 | 24,24,000 | -1,20,000 | 24,24,000 |
| 43 | 4 | -1,20,000 | 24,24,000 | -1,20,000 | 24,24,000 |
| 44 | 5 | -1,20,000 | 24,24,000 | -1,20,000 | 24,24,000 |
| 45 | 6 | -1,20,000 | 24,24,000 | -1,20,000 | 24,24,000 |
| 46 | 7 | -1,20,000 | 24,24,000 | -1,20,000 | 24,24,000 |
| 47 | 8 | -1,20,000 | 24,24,000 | -1,20,000 | 24,24,000 |
| 48 | 9 | -1,20,000 | 24,24,000 | -1,20,000 | 24,24,000 |
| 49 | 10 | -1,20,000 | 24,24,000 | -1,20,000 | 24,24,000 |
| 50 | 11 | -1,20,000 | 24,24,000 | -1,20,000 | 24,24,000 |
| 51 | 12 | -1,20,000 | 24,24,000 | -1,20,000 | 24,24,000 |
| 52 | 13 | -1,20,000 | 24,24,000 | -1,20,000 | 24,24,000 |
| 53 | 14 | -1,20,000 | 24,24,000 | -1,20,000 | 24,24,000 |
| 54 | 15 | -1,20,000 | 24,24,000 | -1,20,000 | 24,24,000 |
| 55 | 16 | -1,20,000 | 24,24,000 | -1,20,000 | 24,24,000 |
| 56 | 17 | -1,20,000 | 24,24,000 | -1,20,000 | 24,24,000 |
| 57 | 18 | -1,20,000 | 24,24,000 | -1,20,000 | 24,24,000 |
| 58 | 19 | -1,20,000 | 24,24,000 | -1,20,000 | 24,24,000 |
| 59 | 20 | -1,20,000 | 24,24,000 | -1,20,000 | 24,24,000 |
| 60 | 44,92,125 | 74,14,498 | |||
| IRR | 5.65% | 9.84% | |||
PPF (Public Provident Fund)
After 20 years, the PPF corpus grows to ₹44.92 lakhs, with an IRR of 5.65%. While the corpus is comparable to the Canara HSBC Secure Bhavishya Plan, PPF allows full access to the maturity amount, unlike the plan’s annuity restriction.
ELSS (Equity-Linked Savings Scheme)
After 20 years, the pre-tax corpus is ₹81.66 lakhs. Post-tax (after capital gains tax), the final corpus is ₹74.14 lakhs, delivering a post-tax IRR of 9.84%, significantly outperforming the Canara HSBC Secure Bhavishya Plan.
| ELSS Tax Calculation | |
| Maturity value after 20 years | 81,66,712 |
| Purchase price | 20,24,000 |
| Long-Term Capital Gains | 61,42,712 |
| Exemption limit | 1,25,000 |
| Taxable LTCG | 60,17,712 |
| Tax paid on LTCG | 7,52,214 |
| Maturity value after tax | 74,14,498 |
Key Advantages of the Alternative Strategy
Higher Returns: ELSS delivers a higher post-tax corpus compared to the Canara HSBC Secure Bhavishya Plan.
Complete Flexibility: Unlike the plan, where the corpus must be converted into an annuity, you retain full control over your funds.
No Withdrawal Restrictions: The accumulated amount can be accessed freely for any financial goal.
By opting for a term insurance + investment strategy, you secure better returns and greater financial flexibility.
In contrast, the Canara HSBC Secure Bhavishya Plan locks you into an annuity, limiting your ability to use your funds effectively. This makes the alternative strategy a superior choice for retirement planning.
The Canara HSBC Secure Bhavishya Plan combines savings, annuity accumulation, and life coverage. While this structure differentiates it slightly from traditional endowment plans, which offer both insurance coverage and maturity benefits, it primarily focuses on building a retirement corpus.
The vesting benefit represents the accumulated savings intended to generate post-retirement income. However, the plan itself does not provide regular income.
The plan only covers the accumulation phase and does not include an annuity component. At vesting, the accumulated benefits—whether fully or partially—must be used to purchase an annuity at prevailing market rates.
The final annuity amount is not guaranteed and it also has a high agent commission.
Since returns depend on market performance, the Canara HSBC Secure Bhavishya plan carries a significant level of risk. Additionally, various charges and restrictions on fund access further reduce its attractiveness as a retirement planning tool.
Retirement planning consists of two critical phases:
1. Accumulation Phase: The period during which you build your retirement corpus. Starting early is crucial, as compounding helps grow your wealth significantly over time.
2. Distribution Phase: The stage where you systematically withdraw funds to sustain your retirement lifestyle. Proper planning ensures a steady and stress-free income.
Do Quora, Facebook, and Twitter have the final say when it comes to financial advice?
To develop a well-structured and personalized retirement plan, it is advisable to consult a certified financial planner. This approach ensures greater financial security, flexibility, and a comfortable retirement.
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