HDFC Life SL Pro Growth Super II is a ULIP plan with 8 Life cover option & 10 fund option that promises to grow your investment.
It claims to offer life protection and additional financial benefits to the policyholder.
But, how can this plan benefit you?
Let us examine whether HDFC SL Pro Growth Super II will protect your loved ones & also helps in wealth accumulation.
Table of Content:
An overview of HDFC Life SL Pro Growth Super II
HDFC Life Pro Growth Super II is a Unit Linked Non-Participating Life Insurance Plan. There is a wide range of life cover options which includes Accidental death benefits, Critical illness cover & Accidental total & permanent disability. The life cover can be chosen with the combination of the above additional benefits.
For investment, there are 11 fund options to choose from based on the investors’ risk profile. It is Type 2 ULIP where you get both the Sum Assured & Fund value in case of death during the policy term.
Features of HDFC Life SL Pro Growth Super II
- There are 8 plan options for Life cover
|Life Option||Death Benefit|
|Extra Life Option||Death Benefit + Accidental Death Benefit|
|Life & Health Option||Death Benefit + Critical Illness Benefit|
|Extra Life & Health Option||Death Benefit + Critical Illness Benefit + Accidental Death Benefit|
|Life & Disability Option||Death Benefit + Accidental Total & Permanent Disability Benefit|
|Extra Life & Disability Option||Death Benefit + Accidental Death Benefit + Accidental Total & Permanent Disability Benefit|
|Life & Health & Disability Option||Death Benefit + Critical Illness + Accidental Total & Permanent Disability Benefit|
|Extra Life & Health & Disability Option||Death Benefit + Accidental Death Benefit + Critical Illness + Accidental Total & Permanent Disability Benefit|
- Opportunity to invest in a choice of funds. The investment in the chosen fund gets accumulated & paid at the end of the policy term.
- Switching of funds or redirecting future Premium(s) into a new fund is allowed.
- Partial withdrawal is allowed after the completion of 5 policy years.
- Rider options are available.
Eligibility Criteria for HDFC Life Pro Growth Super II
|TERM PERIOD (Yrs.)||AGE AT ENTRY (Yrs.)||MAXIMUM AGE AT MATURITY (Yrs.)|
|Extra Life Option||18||55||70|
|Life & Health Option||65|
|Extra Life & Health Option|
|Life & Disability Option||25|
|Extra Life & Disability Option|
|Life & Health & Disability Option|
|Extra Life & Health & Disability Option|
Benefits under HDFC Life SL Pro Growth Super II
The total Sum Assured and Unit Fund Value is payable to the nominee. The policy will terminate, and no more benefits will be payable.
Critical Illness Benefit:
The total Sum Assured and Unit Fund Value is payable. The policy will terminate, and no more benefits will be payable.
Accidental Death Benefit:
In addition to the Death Benefit, an additional Sum Assured is payable to the nominee. The policy will terminate, and no more benefits will be payable.
Accidental Total & Permanent Disability Benefit:
10% of the Sum Assured is payable every year for the benefit pay-out term.
Fund Options of HDFC Life SL Pro Growth Super II:
|Fund Option||Asset Allocation||Risk|
|Money Market, cash & deposits||Govt Sec, Fixed Income, Bonds||Equity|
|Equity Plus Fund||0-20%||0-20%||80-100%||Very High|
|Diversified Equity Fund||0-40%||0-40%||60-100%||Very High|
|Blue Chip Fund||0-20%||–||80-100%||Very High|
|Opportunities Fund||0-20%||–||80-100%||Very High|
|Balanced Fund||0-20%||0-60%||40-80%||Moderate to High|
|Income Fund||0-20%||80-100%||–||Moderate to High|
|Discovery Fund||0-10%||0-10%||90-100%||Very High|
|Equity Advantage Fund||0-20%||0-20%||80-100%||Very High|
Various charges of HDFC Life SL Pro Growth Super II:
Premium Allocation Charge:
|Premium paid during the year||Year 1||Year 2||Year 3||Year 4||Year 5||Year 6|
|Premium allocation rate||94%||95%||96%||97%||98%||99%|
|Premium allocation charge||6%||5%||4%||3%||2%||1%|
Fund Management Charge (FMC):
Fund management charge of only 1.35 % per annum charged daily, of the fund’s value.
Policy Administration Charge:
A Policy Administration Charge of 0.22% per month of the original annual premium will be deducted monthly and will increase by 5% per annum on every policy anniversary, subject to a maximum charge of 0.4% of the annual premium or Rs 500, per month, whichever is lower.
Mortality & Other Risk Benefit Charges:
The amount of the charge taken each month depends on your age and level of coverage. This charge will be taken by cancelling units proportionately from each of the fund(s) you have chosen.
Charged for any Policy alteration request initiated by the Policyholder will attract a charge of Rs 250 per request.
Partial withdrawal charge:
A partial withdrawal will attract a charge of Rs 250 per request. If requested through the company’s portal the Policyholder will be charged Rs 25 per request.
A fund switch request will attract a charge of Rs 250 per request. If requested through the company’s portal the Policyholder will be charged Rs 25 per request.
A premium redirection request will attract a charge of Rs 250 per request. If requested through the company’s portal the Policyholder will be charged Rs 25 per request.
This charge depends on the year of discontinuance and your premium. The policyholder doesn’t have to pay the charge from the 5th policy term onwards.
Insight on Charges:
Let us focus on the charges of HDFC Life SL Pro Growth Super II.
As mentioned above, there are lots of charges that will be deducted from this ULIP plan.
Compared to HDFC Life SL Pro Growth Super II, the charges on other investments have more transparency.
Compare to other market-linked investments charges like Fund Management Charges and Mortality Charges are justifiable.
But, the other charges like Premium Allocation Charges, Policy Administration Charges, Miscellaneous Charges, and Partial Withdrawal Charges are completely unjustifiable.
Grace Period, Revival & Discontinuance
HDFC Life SL Pro Growth Super II plan has a grace period of 30 days. Revival:
The revival period for this product is three years from the date of the first unpaid premium.
Discontinuance of Policy during the lock-in Period – For other than single premium policies, in case of discontinuance of a policy due to non-payment of premium, the fund value after deducting the applicable discontinuance charges shall be credited to the discontinued policy fund (till the lock-in period) and the risk cover and rider cover, if any, shall cease.
Discontinuance of Policy after the lock-in Period – For other than Single Premium Policies, in case of discontinuance of a policy due to non-payment of premium after the lock-in period, the policy shall be converted into a reduced paid-up policy.
How to Cancel/Surrender HDFC Life SL Pro Growth Super II Plan?
Free Look Period
In case you are not agreeable to any of the terms or conditions, you have the option of returning the policy, within 15 days from the date of receipt of the policy. The Free-Look period for policies purchased through distance marketing will be 30 days.
Surrender of the policy before the lock-in period:
The policy shall continue to be invested in the discontinued policy fund and the proceeds from the discontinuance fund will be paid after the lock-in period.
Surrender of the policy after the lock-in period:-
The policyholder has the option to surrender the policy at any time after the lock-in period. Upon receipt of the request for surrender, the fund value as of the date of surrender shall be payable.
Advantages of HDFC Life SL Pro Growth Super II:
- The plan offers additional life cover with a different combination.
- This life insurance cum savings product discipline your saving habit.
- Opportunity to invest in various fund option
- Switching the fund/routing to the new fund based on the market performance can be done.
- Partial withdrawal is allowed after the lock-in period of 5 years.
- Death benefit includes both the Sum Assured & the fund value till death (Type 2 ULIP)
Disadvantages of HDFC Life SL Pro Growth Super II:
- The premium is routed to investment after the deduction of various charges.
- There is no loyalty addition or any bonus addition to the fund value.
- The mortality charges will be high for Type 2 ULIP when compared to Type 1 ULIP.
- The Lock-in period for the HDFC Life SL Pro Growth Super II plan is 5 years.
Research Methodology on HDFC Life SL Pro Growth Super II:
Till now we have analysed the details that we need to know about the HFDC Life SL Pro Growth Super II plan. But, this analysis is not enough for us to decide whether we should include this product in our investment portfolio or not.
So, now we are going to do the in-depth research methodology on the IRR of HDFC Life SL Pro Growth Super II plan to see how this plan can benefit us.
In this research, first, we are going to see how much return we can get from the HDFC Life SL Pro Growth II plan by using its online calculator.
Then, we are going to use the same value to see how much return we can get from other investment products.
Later, we can compare both results to see which gives us a better return.
In this way, we will know which one is better for your investment portfolio.
Benefit Illustration analysis of HDFC Life SL Pro Growth Super II:
|Premium Paying Term||15|
Let us look into the fund value at the end of the policy term.
|At 4% p.a.||At 8% p.a.|
|Age||Year||Annualised premium / Maturity benefit||Death benefit||Annualised premium / Maturity benefit||Death benefit|
The illustration will show two different rates of assumed future investment returns. The assumed rates of returns mentioned in the illustration are not guaranteed. The value of the policy is dependent on several factors including future investment performance. On maturity only the fund value is receivable. The IRR working at the assumed rate is less than a bank FD rate.
HDFC Life SL Pro Growth Super II vs. Other Investments: The wealth accumulation for future goals should be an inflation-beating return. So, to get an inflation-beating return, we can probe into other options for investments. While choosing a product for investment keep in mind the risk appetite & time horizon.
For a risk-averse investor, PPF is a better option where you get a guaranteed return. For those who understand the market, the mutual fund ELSS option works well. Similarly, there are many investment options available for investors to suit their risk appetite.
HDFC Life SL Pro Growth Super II Vs. PPF Vs. ELSS
Similar to the illustration, let us assume an annual cash flow of Rs. 1.50 lakhs. We can assume pure term insurance for a sum assured of Rs. 25 lakhs for a term of 15 years availed. The premium for pure-term insurance is Rs. 10,000. Out of Rs. 1.50 lakhs, the balance amount is invested in PPF / ELSS for corpus accumulation.
|Term Insurance + PPF||Term insurance + ELSS|
|Age||Year||Term Insurance premium + PPF||Death benefit||Term Insurance premium + ELSS||Death benefit|
The IRR for PPF & ELSS options are better than the HDFC Life SL Pro Growth Super II. And they are higher than the inflation rate. This will help to achieve our life goals without any compromise.
Final Verdict on HDFC Life SL Pro Growth Super II:
HDFC Life SL Pro Growth Super II has varied life cover options which are generally not available under any life insurance plan. This ULIP plan may be slightly advantageous for those who lack discipline in savings.
From an investment point of view, though it has the potential to earn a market return, the charges under various heads pull down the investment amount. The IRR also diminishes due to this effect. The fund value may not help to achieve your goal, or you may have to downsize your goal.
If you have any comments or questions, write them in the comment box below.
Or are you interested in creating a Comprehensive Financial Plan for your financial goals?
Skip the queue by registering for your 30 Minute FREE Financial Plan Consultation. Click the ‘‘BOOK YOUR SLOT NOW!’’ button below.
A proper financial plan with the right asset allocation & regular review of the plan will help to fulfil all your life dreams.