HDFC Life Sanchay Plus: Review-Should You Buy It?

Is this HDFC Life’s Sanchay Plus any different from the previous one?

If this Sanchay Plus is better, if at all, is this worth considering as an investment or insurance option?

This review article will help you come to a conclusion on whether the new HDFC Life Sanchay Plus is good or bad for you.

Table Of Content

1.)Review of HDFC Life: Company Overview

2.)Basic Features of HDFC Life Sanchay Plus

3.)HDFC Life Sanchay Plus: Review of Death Benefit

4.)Practical Review of HDFC Life Sanchay Plus Benefit’s 4 Variants

• Variant No.1: Guaranteed Maturity Benefit – Analysis and Review
• Variant No.2: Guaranteed Income Benefit – Analysis and Review
• Variant No.3: Guaranteed Life-Long Income Benefit – Analysis and Review
• Variant No.4: Guaranteed Long Term Income Benefit – Analysis and Review

5.)HDFC Life Sanchay Plus: Overall Analysis and Review

6.)HDFC Life Sanchay Plus: How to surrender/cancel the policy?

7.)Is HDFC Life Sanchay Plus Good?

HDFC launched the HDFC Life Sanchay Plus, following the HDFC Life Sanchay endowment insurance plan.

Being the next version, it sure does have some better features and options than the previous one. It is crafted to be appealing and attractive for every single investor to “invest”. Are these appeal and attractiveness is just a perception created or a reality?

We’ll discover that in this article, after we look into the basic features of HDFC Life Sanchay Plus and the small overview of the company “HDFC Life”.

HDFC Life: Company Overview

HDFC Life is providing its services since the year 2000. Now, it’s almost 21 years since its inception.

The company has been an average player in terms of its Claim Settlement Ratio when compared to its other counterparts. But, over the years its Claim Settlement Ratio has experienced a consistent rise.

Still, a long way to go!

For more details on various Term Insurance, you should read the detailed article on “Cheat Sheet to select the best Term Insurance”.

Let us review by diving into a deeper analysis of HDFC Life Sanchay Plus to validate if it is a pro or a con.

HDFC Life Sanchay Plus: Basic Features

HDFC Sanchay Plus is a non-linked savings endowment insurance plan.

It offers four different policy benefit options to choose from. They are,

• Guaranteed Maturity
• Guaranteed Income
• Life-Long Income
• Long Term Income

The minimum age eligibility for buying of HDFC Life Sanchay Plus policy is 5 years and the maximum age is 60 years.

The minimum age to be eligible for the maturity benefit is 18 years and the maximum age starts from 71 years.

This HDFC Life Sanchay Plus requires a minimum premium installment payment of ₹30,000 a year.

The HDFC Life Sanchay Plus also offers rider options for ‘Accidental Disability’ and ‘Critical Illness Plus’.

To know about these this Features in detail, download – HDFC Life Sanchay Plus Product Brochure

Source – hdfclife.com

These features look attractive, the “Guaranteed” Maturity and Income benefit options in particular.

Of course, the benefit is “Guaranteed”, but you must look into how much is guaranteed. This HDFC Life Sanchay Plus is marketed as a savings insurance plan and hence must offer a return rate on maturity.

Option	Premium Paying Term	Policy Term	Payout Period
Guaranteed Maturity	5 years	10 to 20 years	Maturity Benefit paid as lumpsum at the end of policy term
	6/7/8/9/10 years	12 to 20 years
Guaranteed Income	7 years	7 to 12 years	Maturity Benefit paid as a guaranteed income for a fixed term of 10 or 12 years starting from (Policy Term + 1)th years in arrears.
	8 years	8 to 13 years
	9 years	9 to 14 years
	10 years	10 to 15 years
	11 years	11 to 16 years
	12 years	12 to 17 years
Life Long Income	5 years	6 years	Maturity Benefit paid as a guaranteed income from 7th year in arrears till the individual attains age 99 years
	6 years	7 years	Maturity Benefit paid as a guaranteed income from 8th year in arrears till the individual attains age 99 years
	10 years	11 years	Maturity Benefit paid as a guaranteed income from 12th year in arrears till the individual attains age 99 years
	12 years	13 years	Maturity Benefit paid as a guaranteed income from 14th year in arrears till the individual attains age 99 years
Long Term Income	5 years	5 to 10 years	Maturity Benefit paid as a guaranteed income for a fixed term of 25 or 30 years starting from (Policy Term + 1)th years in arrears.
	6 years	6 to 11 years
	7 years	7 to 10 years
	8 years	8 to 11 years
	9 years	9 to 11 years
	10 years	10 to 12 years
	11 years	11 to 12 years
	12 years	12 to 13 years

Source – hdfclife.com

A video shown below will give you a brief idea of and a review of various aspects under the HDFC Life Sanchay Plus Plan. Let’s have a look

Let’s see how much they have to offer in return with their four different benefit options with practical examples.

HDFC Life Sanchay Plus: Review of Death Benefit

If the policyholder dies within the policy term, the nominee will receive a death benefit equal to the Sum Assured on Death.

Sum Assured on death is the highest of the following:

• 105% of the total premiums paid
• 10 times of the annualized premium
• Guaranteed Sum Assured on Maturity (total premiums payable under the policy)
• Premiums paid accumulated at an interest of 5% p.a. compounded annually
• Sum Assured (Death Multiple times Annualized premium). Death multiple depends on your entry age.

The Death Benefits Multiples applicable for all plans are specified below:

Age*	Death Benefit Multiple	Age*	Death Benefit Multiple	Age*	Death Benefit Multiple	Age*	Death Benefit Multiple
5	15.00	19	13.60	33	12.20	47	10.80
6	14.90	20	13.50	34	12.10	48	10.70
7	14.80	21	13.40	35	12.00	49	10.60
8	14.70	22	13.30	36	11.90	50	10.50
9	14.60	23	13.20	37	11.80	51	10.45
10	14.50	24	13.10	38	11.70	52	10.40
11	14.40	25	13.00	39	11.60	53	10.35
12	14.30	26	12.90	40	11.50	54	10.30
13	14.20	27	12.80	41	11.40	55	10.25
14	14.10	28	12.70	42	11.30	56	10.20
15	14.00	29	12.60	43	11.20	57	10.15
16	13.90	30	12.50	44	11.10	58	10.10
17	13.80	31	12.40	45	11.00	59	10.05
18	13.70	32	12.30	46	10.90	60	10.00

The Sum Assured is determined considering your entry age and the Annualized Premium you agree to pay in a policy year.

Let’s see how much they have to offer in return with their four different benefit options with practical examples.

HDFC Life Sanchay Plus: Review of Maturity Options

To enable the review, consider an average person of 30 years old—let’s call him Madhan.

Illustration of  benefit for healthy  male aged  30 years(50 years for Life Long Income option),who pays ₹1lac+Taxes per annum Throughout the premium paying term and survives the policy

Plan Option	Sum Assured	Death Benefit at Inception*	Policy Term (years)	Premium Paying Term (years)	Maturity Benefit (INR)
Guaranteed Maturity	1,250,000	1,250,000	20	10	₹22,56,970 paid as a lump sum at Maturity
Guaranteed Income	1,250,000	1,546,711	13	12	Guaranteed income^ of ₹2,16,000 p.a. from 14th year to 25th year(payout period of 12 years)
Life Long Income	1,250,000	1,250,000	11	10	Guaranteed income^ of ₹1,03,250 p.a. from 12th year to 36th year(payout period of 25 years) + ₹10,00,000 at the end of payout period(36th year)
Long Term Income	1,050,000	1,064,141	11	10	Guaranteed income^ of ₹ 96,000 p.a. from 12th year to 99 year(38 years) + ₹10,00,000 at the end of payout period

Plan Option Benefit	Guaranteed Maturity	Guaranteed Income	Long Term Income	Life Long Income
Guaranteed Lumpsum Amount	✔	𝙓	✔ (In the form of Return of Premiums)	✔ (In the form of Return of Premiums)
Guaranteed Additions	✔	𝙓	𝙓	𝙓
Guaranteed Income	𝙓	✔  (For 10/12 yrs)	✔ (For 10/12 yrs)	✔ (For 10/12 yrs)
Death Benefit	✔	✔	✔	✔

1. Guaranteed Maturity Benefit: Review

Under this benefit option the HDFC Life Sanchay Plus the maturity benefit is paid as a lump sum amount at the end of the policy term.
Among the three different policy terms as defined below, let’s choose the 20 years policy term, which is the longest. This policy option has a premium payment term of 10 years.

Guaranteed  Maturity	Premium Paying Term(PPT)	Policy Term	Payout Period
	5 year	10 year	Maturity Benefit is paid as a lump-sum at the end of 10 years
	6 year	12 year	Maturity Benefit is paid as a lump-sum at the end of 12 years
	10 year	20 year	Maturity Benefit is paid as a lump-sum at the end of 20 years

When the policy matures, Madhan will receive the “Guaranteed Maturity” benefit. The guaranteed maturity benefit is the sum of Guaranteed Sum Assured and the Guaranteed Addition.

The Guaranteed Addition differs with different groups of age. It is higher for the younger age group than the older age group. See the table below.

Source – hdfclife.com

In our example, Madhan will receive a Guaranteed Addition of ₹140, which is the maximum Guaranteed Addition possible.

Age	Year	Guaranteed Maturity
		Premium / Maturity Benefit	Death Benefit
31	1	-100000	1250000
32	2	-100000	1250000
33	3	-100000	1250000
34	4	-100000	1250000
35	5	-100000	1250000
36	6	-100000	1250000
37	7	-100000	1250000
38	8	-100000	1250000
39	9	-100000	1250000
40	10	-100000	1250000
41	11	0	1250000
42	12	0	1250000
43	13	0	1250000
44	14	0	1250000
45	15	0	1250000
46	16	0	1250000
47	17	0	1250000
48	18	0	1250000
49	19	0	1250000
50	20	0	1250000
51	21	2256970
52	22
IRR		5.32%

The Catch: If you think it is not bad, keep in mind that you have to pay the GST in addition to the premium you are paying. If we consider that too, the return rate will be even lesser than 5.7%.

Hence, Guaranteed Maturity is not a wise option at all.

Let’s see whether the other benefit options have better returns to offer.

2. Guaranteed Income Benefit: Review

The Guaranteed Income benefit option of the HDFC Life Sanchay Plus will pay you the maturity benefit as a guaranteed income for a select number of years in arrears.
In this example let us choose the policy plan with 13 years policy term.

Premium Paying Term(PPT)	Policy Term	Payout Period
10 year	11 year	Maturity Benefit is paid as a guaranteed income from 12th year to 21st years in arrears
12 year	13 year	Maturity Benefit is paid as a guaranteed income from 14th year to 25th years in arrears.

It requires a premium payment term of 12 years. The maturity benefits will be paid as Guaranteed Income in arrears.

Madhan will receive this “Guaranteed Income” for 12 subsequent years after the successful completion of the policy term, i.e. from the 14th year to the 25th year.

See the illustration image of plan from HDFC Life Sanchay Plus Calculator below.

Age	Year	Guaranteed Income
		Premium / Maturity Benefit	Death Benefit
31	1	-100000	1546711
32	2	-100000	1546711
33	3	-100000	1546711
…		…	…
42	12	-100000	1546711
43	13	0	1546711
44	14	0	1546711
45	15	216000
…		…
56	26	216000
57	27
	IRR	5.65%

In the Guaranteed Income option, you will get an IRR of 5.65%.

If you choose the policy term for 13 years and the Premium Paying term for 12 years, then you will start to get your guaranteed payout from the 14th policy term onwards.

The Catch: If you think it’s fair enough to consider buying this policy plan, remember. We did not include the GST which you will be paying along with the payment of annual insurance premium. If you weigh that in, the IRR must be only a little over 5%.

In addition, your benefit will be the same throughout the payout period as inflation increases during the payout period. Today’s ₹2,16,000 will not have the same value after 10 years in the payout period.

Therefore, this “Guaranteed Income” option is not a better option either. Can the other two benefit options reward you better? See it for yourself below.

3. Guaranteed Life-Long Income Benefit: Review

The HDFC Life Sanchay Plus’ Life-Long Income benefit option will attract the masses for sure.

The maturity benefit is paid as guaranteed income from the end of the policy term in arrears until the insured attains 99 years of age.
Guaranteed Life-Long Income looks attractive. But, you can buy it only if your age is between 50 years and 60 years old.

Premium Paying Term(PPT)	Policy Term	Payout Period
5 year	6 year	Maturity Benefit is paid as a guaranteed income from 7th year in arrears till the individual attains the age of 99 years.
10 year	11 year	Maturity Benefit is paid as a guaranteed income from 12th year in arrears till the individual attains the age of 99 years.

Age	Year	Life Long Income
		Premium / Maturity Benefit	Death Benefit
31	1	-100000	1081500
32	2	-100000	1081500
33	3	-100000	1081500
34	4	-100000	1081500
35	5	-100000	1081500
36	6	0	1081500
37	7	0	1081500
38	8	34505
…	…	…
100	70	34505
		34505
		500000
	IRR	5.65%

Let’s say that Madhan is purchasing the Life Long Income option. Here, he is choosing the Premium Payment Term for 5 years, and he will get his guaranteed payout from the 7th policy term onwards for 99 years. 

Then, at the end of the policy term, he will get an IRR of 5.51%.

“Life Long Guaranteed Income”

Did they just sell the “Financial Independence” in a single insurance policy?

It’s terrifying how words are used to manipulate investors’ decisions to sell products.

Whatever they do, don’t let yourself be fooled.

The Catch: The return on this “Life-Long Income” policy is shy of 5.51%. But think about it, a maximum of 5.51% interest return(IRR) for a period of almost 50 years is ridiculous.

As we have seen in the above reviews, you’re going to pay more as GST. And the inflation will keep reducing the value of your “income” exponentially.

It may appear good in contrast with the previous options. But from a money-smart investor’s perspective, it is also a big let-down.

The last remaining benefit option claims to have some flexibility. Let’s review what it has under its hood.

4. Guaranteed Long Term Income: Review

The Long Term Income benefit option of the HDFC Life’s Sanchay Plus policy promises to pay the maturity benefit in arrears for a select period of time.
The payout period of the policy varies based on the policy term. However, it ends on the 36th year from the starting year of the policy term.

Premium Paying Term(PPT)	Policy Term	Payout Period
5 year	6 year	Maturity Benefit is paid as a guaranteed income from 7th year to 36th years in arrears
10 year	11 year	Maturity Benefit is paid as a guaranteed income from 12th year to 36th years in arrears.

Age	Year	Long Term Income
		Premium / Maturity Benefit	Death Benefit
31	1	-100000	1287500
32	2	-100000	1287500
33	3	-100000	1287500
34	4	-100000	1287500
35	5	-100000	1287500
36	6	0	1287500
37	7	0	1287500
38	8	37080
…	…	…
62	32	37080
63	33	500000
64	34
IRR		5.50%

Let’s assume Madhan buys the 6-year policy term for which he will be paying 5 years of the policy plan. His plan would look like this, the above calculation

At the end of the policy term, he will get an IRR of 5.50% and a Guaranteed income of Rs. 37,080 p.a from the 8th policy term onwards for 30 years

The Catch: Even a minimum assumption of just 5.50% inflation will reduce your ₹5 lakhs by 4.3 times.

Overall, this “Guaranteed Long Term Income” is capable of providing only 5.50% at the most.

A 5.50% IRR(Internal Rate of Return) for a period of 30 years should not even be an option to consider. And the obvious, you will be paying the GST for your premium payment—reducing the return rate even more.

I must say, this benefit option too is only the same thing in a different wrapper.

Do these plans have anything at all to offer an investor?

Is HDFC Sanchay Plus a definite Con for investors? 

HDFC Life Sanchay Plus: Analysis and Review

As you might have noticed from the above analysis that all the 4 variants have some catch in their offerings. Though they use catchy words like “Guaranteed” or “Life-long Income”, but their ROI is less than 6%, which can’t even beat the inflation rate!

Policy Option	IRR
Guaranteed Maturity	5.32%
Guaranteed Income Benefit	5.65%
Guaranteed Life Long Income	5.51%
Guaranteed Long Term Income	5.50%

So BEWARE, If your Financial Advisor recommends you this plan, it’s because they may get 30-40% as commission. for example:If your premium is 1 lakh, your advisor may get 30,000 to 40,000 as commission out of your premium.

A Bank Relationship Manager may also try selling you this product. This is because the bank also gets a commission to do so. Relationship managers also have pressure to sell these kinds of products and meet targets, hence there is also a lot of misselling happening.

The misselling is that these products give around 8 to 9% returns. So before you buy the product, verify the truth on the HDFClife website as to what the actual returns are.

Many think that as the product looks complicated, it must be a good plan, but it is not the case. PPF, Mutual Funds, Term Insurance though are old, simple and boring, have no marketing gimmicks. They are easy to understand and also fulfils its purpose.

Complexity kills transparency. Less transparency makes it easier to mis-sell.

Avoid complicated investment products like HDFC Life Sanchay Plus.

How much is really guaranteed in HDFC Life Sanchay Plus?

Returns are guaranteed only if you stay the course: The policy benefits will reduce if you surrender the policy or miss the premium payment.

They portray it as guaranteed and life long, but how much is guaranteed?

See what is your final returns. Only 5 to 6% is guaranteed.

GST: You will also have to pay the GST on the premium, after that the returns will become even lower.

What should be your next wise step as an investor?

If you are looking for wealth creation, then this is not the right product: PPF would give higher returns.

Liquidity: Investment is locked in this plan until the income period starts.

In life long option, you will receive the same amount throughout your life. How will this even benefit you?

And moreover, HDFC Life is an insurance company and not an investment company.

So, if you want higher returns on your investment you should invest in investment vehicles, such as Stocks or Mutual Funds. Though they have risk factors, they will reward you suitably through their higher returns of 12% – 15% if you keep yourself invested in the long term. (or even equivalent to the HDFC Life Sanchay Plus’ term!!)

And, if you are a risk-averse then it is better to invest in PPF, which will give you the guaranteed returns of around 7.10%! Even FD returns are more respectable than HDFC Life Sanchay Plus.

Always, look for higher returns and less complexity, if you invest any amount of money into any policy.

Therefore, our advice to you is: if you are investing your money for 20 long years, you must consider investing in Mutual Funds. Have a look at the obvious advantages of Mutual Fund as compared to HDFC Life Sanchay Plus:

1. Returns on Investment: HDFC Life Sanchay Plus Vs. Mutual Fund

As we have already discussed returns aspects. Now, let’s look at an example.

In Mutual Funds, the longer you invest, the more power of compounding you will experience! For example, let us say you invest Rs.1,00,000 p.a. in Mutual Funds for the duration of 10. This means, you have invested Rs.10,00,000 Lacs in 10 years.

Your returns will become greater than Rs. 19 Lacs, with a modest interest rate of 12% in Mutual Funds. And, you can withdraw your amount in 11th year.

And, if you want to invest for 20 years, that is total Rs.20 Lacs in 20 years; your returns will become Rs. 80 Lacs, which is approximately 4 times your initial investment with a 12% interest rate!

Whereas with HDFC Life Sanchay Plus as you already saw, its return is even lesser than 6% after the 20-year long term!

2. Lock-in Period: HDFC Life Sanchay Plus Vs. Mutual Funds

Mutual Funds do not have any Lock-in period. If you want to cancel your investment SIPs in the first year, there will be an exit load charge of 1%. After 1 year, there will be no charge, you can cancel your scheme anytime.

HDFC Life Sanchay Plus requires you to pay all your annual premiums on time for 10 years in the first variant and so on. Otherwise, you will not receive your benefits of this policy. So, you are locked in for 10 years for paying your premiums.

There is a free look-in period of 15 days, but even if you cancel within 15 days, you will be charged with fees and tax towards Stamp duty, medical examination, and proportionate risk premium.

3. Who is more goal focused? HDFC Life Sanchay Plus Vs. Mutual Funds

Mutual Funds allows you to list your short term (2-5 years) and long term (7+ years) goals and invest accordingly in the right scheme, where you will be benefitted by Higher Returns as compared to any other policy, including HDFC Life Sanchay Plus.

HDFC Life Sanchay Plus is designed to keep you in the comfort zone towards the expectation of future income security. Truth is, you are only receiving the amount that you have given them over a period of 10 years or so. All the added benefits get automatically levelled by the inflation rate!!

Therefore, there is absolutely no point in achieving any major/minor financial goal with HDFC Life Sanchay Plus.

4. Regulatory Authority: HDFC Life Sanchay Plus Vs. Mutual Funds

Mutual Funds are regulated by a reputed agency called SEBI. Whereas, HDFC Life Sanchay Plus is regulated by IRDA, which  regulate insurance policies.

SEBI ensures greater security and safeguards against all frauds in the Mutual Fund or Stock investments. Whereas, SEBI has no such role to play in such income schemes by HDFC Life or other such companies.

The regulation of IRDA is predominantly focused on Insurance regulation and not on investment regulation. SEBI’s regulation is well evolved in regulating the investments, protecting investor’s interest and proactively taking measures to stop mis-spelling.

So, if you are investing your money in the long term, your first priority is to achieve higher returns. Therefore, it is advisable  you should invest in SEBI-regulated platforms, such as Mutual Funds or Stock Markets.

We hope this information helps you choose whether H If you have any queries until this point, you can ask them in the comment section.

Also read Is it worthwhile to invest in HDFC Sanchay Plus?

How to surrender/cancel HDFC Life Sanchay Plus Policy?

Cancellation during the free look-in period:

You can cancel the plan within the free look in the period of 15/30 days from the day of your receipt. Please note:

The free-look period is 15 days from the date of receipt of the policy in case of face-to-face selling.

The Free-look period for the policies purchased through Distance Marketing will be 30 Days from the date of the receipt. Where Distance marketing refers to the policies sold through telephone or online or any other method which do not involve face to face selling.

Your premium will be refunded but they are subject to deduction of the:

• Proportionate  risk premium for the period on cover,
• The expenses incurred by the company on medical examination (if any) and
• Stamp duty(if any).

Cancellation after the free-Look In Period:

You can submit your cancellation or complaint request in an Online or Offline Format. A written request or an email with the registered email id is mandatory. You can send your e-mail to service@hdfclife.com.

For more details, you should read this current official document of HDFC Life Sanchay Plus.

All grievances (Service and sales) received by the Company will be responded to within the prescribed regulatory Turn Around Time (TAT) of 14 days.

A policy once returned shall not be revived, reinstated or restored at any point in time and a new proposal will have to be made for a new policy.

In case, you are not satisfied with the company’s response, within 14 days, you may approach the Grievance Cell of the Insurance Regulatory and Development Authority of India (IRDAI) on the following contact details:

IRDAI Grievance Call Centre (IGCC)

TOLL-FREE NO:155255

Email ID: complaints@irda.gov.in

Online- You can register your complaint online at https://irda.gov.in/

Address for communication for complaints by fax/paper:
Consumer Affairs Department Insurance Regulatory and Development Authority of India
9th floor, United India Towers, Basheerbagh
Hyderabad – 500 029,
Telangana State (India).

More more updated details you can refer to this Official policy document of HDFC Life Sanchay Plus.

Is HDFC Life Sanchay Plus Good or Bad?

What is our view observation on HDFC Life’s Sanchay Plus endowment plan?

The term “Guaranteed” ultimately seems to be only a marketing plan than a policy plan. A return of 5%-6% in these policy options can never be an investors’ delight but misery. Such returns can’t even beat the inflation for a long duration of 20+ years!!

Instead, you can buy term insurance for life cover at a much lesser price—while you invest the rest of the “premium” in instruments that give better returns.

PPF is also a triple tax Exempt investment instrument that gives return above 8% quarterly.

Or if you are willing to manage risks, there are even better options. You can invest in equity mutual funds for even higher returns, an average of 12% return.

Be money smart and stay away from such low return “savings insurance” plans.

We hope this review helps you choose whether HDFC Life Sanchay Plus is a good or bad investment for your financial needs

You can also book a FREE Complimentary Consultation Call with us to get advice on the best investment and insurance policy for your needs by clicking the link below: