HDFC Life Smart Protect Plan Review: Should You Invest?

Planning for your life goals is important. You make sure that your money grows and at the same time ensure the wealth you create is protected against any potential downfall.

So that your loved ones’ dreams are fulfilled, even when you are not there to witness them.

This detailed analysis of the HDFC Life Smart Protect plan helps you to understand the working of the plan and also the good and bad aspects of the plan with the precise calculation of returns.

We have also compared the calculated returns and reviewed this plan with various other alternatives. so that you can get a comprehensive view of insurance plans in general and their fund performance. Which in turn helps you asses this as a good or bad investment plan for your future.

Let’s get started!

Table of Contents:

An Overview of HDFC Life Smart Protect Plan
Features of HDFC Life Smart Protect
Eligibility Criteria
PLAN OPTIONS in HDFC Life Smart Protect plan

• Option A: Level Cover
• Option B: Level Cover with Capital Guarantee
• Option C: Decreasing Cover
• Option D: Decreasing Cover with Capital Guarantee

HDFC Life Smart Protect Plan -Investment Strategy Review
Benefits Payable Under Various HDFC Life Smart Protect plan OPTIONS
HDFC Life Smart Protect plan – Loyalty Additions Review
HDFC Life Smart Protect plan – Other Benefits – Review
Various Charges under HDFC Life Smart Protect Plan
A grace period, Discontinuance & Revival of HDFC Life Smart Protect plan
Free Look Period – HDFC Life Smart Protect
Surrendering HDFC Life Smart Protect
Advantages of HDFC Life Smart Protect
Disadvantages of HDFC Life Smart Protect
Research Methodology
HDFC Life Smart Protect plan – Benefit Illustration – IRR Analysis
Comparison of HDFC Life Smart Protect plan with other investments
HDFC Life Smart Protect Plan Vs. Pure Term Insurance + PPF / ELSS
Final verdict on HDFC Life Smart Protect

An Overview of HDFC Life Smart Protect Plan

It is a Non-Participating, Individual Life Unit Linked Insurance Plan. It addresses your long-term savings needs and also provides you protection in the form of a life cover.

It combines the benefits of life insurance coverage with investment opportunities in various market-linked instruments.

Now let’s see its features

Features of HDFC Life Smart Protect

• Premium payment options of Limited Pay and Regular Pay.
• Option to choose a cover that fits your needs and maximizes your benefits with 4 plan options.
• Choice of 5 fund options with unlimited free switching.
• Option to reduce your death benefit after a chosen period under Decreasing Cover and Decreasing Cover with Capital Guarantee plan options.
• Get minimum Assured Benefit on Maturity under Level Cover with Capital Guarantee and Decreasing Cover with Capital Guarantee plan options.
• Some of the charges are returned during the policy term.

Eligibility Criteria of HDFC Life Smart Protect plan

Parameters	Minimum	Maximum
Age at Entry	Life Assured: 0 years (30 days) Proposer: 18 years	Life Assured: 60 years Proposer: No Limit
Age at Maturity	25 years	100 years
Premium Payment Term	Plan Option	Premium Paying Term
	Option A: Level Cover	Limited Pay (5 to 12 years) Regular Pay (25 to 40 years)
	Option B: Level Cover with Capital Guarantee
	Option C: Decreasing Cover	Limited Pay (5 to 12 years)
	Option D: Decreasing Cover with Capital Guarantee
Policy Term	25 years	40 years
Instalment Premium	Premium Payment Frequency	Limited Pay for 5 and 6 years	Others
	Annual	50,000	30,000
	Half-Yearly	25,000	15,000
	Quarterly	12,500	7,500
	Monthly	4,500	3,000
Sum Assured	Basic Sum Assured: 10 times the Annualised Premium For Top-Up Premium: 1.25 times the Top-Up premium	No Limit
Premium Payment Frequency	Annual, Half-Yearly, Quarterly, Monthly

Plan Options in HDFC Life Smart Protect plan

This product offers 4 plan options that you can choose from depending on your Protection and Saving needs:

Option A: Level Cover

This plan option provides a level cover throughout the policy term.

Option B: Level Cover with Capital Guarantee

This plan option provides a level cover throughout the policy term. The policyholder also gets a Capital Guarantee, which is in the form of a minimum Assured Benefit at maturity.

Option C: Decreasing Cover

Under this plan option, the cover would decrease with the policy year. This is subject to the ‘Level Cover Period’, chosen by the policyholder at policy inception.

Option D: Decreasing Cover with Capital Guarantee

Under this plan option, the cover would decrease with the policy year. This is subject to the ‘Level Cover Period’, chosen by the policyholder at policy inception. The policyholder also gets a Capital Guarantee, which is in the form of a minimum Assured Benefit at maturity.

HDFC Life Smart Protect Plan -Investment Strategy Review

For Plan Option A (Level Cover) and Plan Option C (Decreasing Cover)

The following 5 fund options are available under the product. Policyholder may choose to put his/her premiums in one or more of these funds in the proportion he/she desires and can change this allocation during the policy term according to the fund performance.

FUND OPTION	ASSET ALLOCATION			RISK
	Money Market, cash & deposits	Govt Sec, Fixed Income, Bonds	Equity
Diversified Equity Fund	0-40%	0-40%	60-100%	Very High
Bond Fund	0-60%	40-100%	–	Moderate
Discovery Fund	0-10%	0-10%	90-100%	Very High
Equity Advantage Fund	0-20%	0-20%	80-100%	Very High
Sustainable Equity Fund	0-20%	0-20%	80-100%	Very High

For Plan Option B (Level Cover with Capital Guarantee) and Plan Option D (Decreasing Cover with Capital Guarantee)

For these funds, the premium received will be allocated to the ‘Capital Growth Fund’ and the ‘Capital Secure Fund’ only. The allocation proportion and any rebalancing in these funds will be solely determined by the company.

FUND OPTION	ASSET ALLOCATION			RISK
	Money Market, cash & deposits	Govt Sec, Fixed Income, Bonds	Equity
Capital Growth Fund	0-20%	0-20%	80-100%	Very High
Capital Secure Fund	0-20%	80-100%	–	Moderate

Benefits Payable Under Various HDFC Life Smart Protect plan Options

Option A: Level Cover

Death Benefit

“Death Benefit” is payable as a lump sum if the life assured dies during the policy term.

Subject to the Policy being in force and all due premiums having been paid.

The Death Benefit payable to the Policyholder/ Assignee/ Nominee shall be the highest of the following:

• Total Sum Assured less partial withdrawal made, if any, where Total Sum Assured is Basic Sum Assured plus any additional Sum Assured in respect of Top-ups; or
• Fund value, or
• 105% of Total Premiums Paid.

Maturity Benefit

On survival of the Life Assured till the Maturity Date, subject to Policy being in force on the Maturity Date.

The risk cover shall cease and Fund Value at Maturity plus Loyalty Additions payable at Maturity shall be payable to the Policyholder as the maturity benefit.

Option B: Level Cover with Capital Guarantee

Death Benefit

“Death Benefit” is payable as a lump sum if the life assured dies during the policy term.

Subject to the Policy being in force and all due premiums having been paid.

The Death Benefit payable to the Policyholder/ Assignee/ Nominee shall be the highest of the following:

• Total Sum Assured less partial withdrawals made, if any, where Total Sum Assured is Basic Sum Assured plus any additional Sum Assured in respect of Top-ups; or
• Fund value, or
• 105% of Total Premiums Paid.

Maturity Benefit

On survival of the Life Assured till the Maturity Date, subject to Policy being in force on the Maturity Date, the risk cover shall cease and Loyalty Additions payable at Maturity Benefit shall be payable to the Policyholder.

The maturity benefit will be calculated as a higher of

• Fund Value at Maturity plus Loyalty Additions payable at Maturity,
• Assured Benefit (Total Premiums Paid less Total Partial Withdrawals made (if any)).

Option C: Decreasing Cover

‘Level Cover Period’ is the period of the initial policy year(s) during which cover would remain level. The Level Cover Period can be between PPT to (Policy Term less 5) years.

From the policy year following the ‘Level Cover Period’, the cover would decrease uniformly every year, subject to it being more than or equal to the Minimum Basic Sum Assured at any point in time.

Death Benefit

“Death Benefit” is payable as a lump sum if the life assured dies during the policy term.

Subject to the Policy being in force and all due premiums having been paid.

The Death Benefit payable to the Policyholder/ Assignee/ Nominee shall be the highest of the following:

• Total Sum Assured less partial withdrawals made, if any, where Total Sum Assured is Sum Assured applicable in the year of death plus any additional Sum Assured in respect of Top-ups; or
• Fund value, or
• 105% of total Premiums paid.

Maturity Benefit

On survival of the Life Assured till the Maturity Date, subject to Policy being in force on the Maturity Date.

The risk cover shall cease and Fund Value at Maturity plus Loyalty Additions payable at Maturity shall be payable to the Policyholder, as the maturity benefit.

Option D: Decreasing Cover with Capital Guarantee

‘Level Cover Period’ is the period of the initial policy year(s) during which cover would remain level. The Level Cover Period can be between PPT to (Policy Term less 5) years.

From the policy year following the ‘Level Cover Period’, the cover would decrease uniformly every year, subject to it being more than or equal to the Minimum Basic Sum Assured at any point in time.

Death Benefit

“Death Benefit” is payable as a lump sum if the life assured dies during the policy term. Subject to the Policy being in force and all due premiums having been paid, the Death Benefit payable to the Policyholder/ Assignee/ Nominee shall be the highest of the following:

• Total Sum Assured less partial withdrawals made, if any, where Total Sum Assured is Sum Assured applicable in the year of death plus any additional Sum Assured in respect of Top-ups; or
• Fund value, or
• 105% of total Premiums paid.

Maturity Benefit

On survival of the Life Assured till the Maturity Date, subject to Policy being in force on the Maturity Date, the risk cover shall cease, and Loyalty Additions payable at Maturity Benefit shall be payable to the Policyholder.

The maturity benefit will be calculated as a higher of

• Fund Value at Maturity plus Loyalty Additions payable at Maturity,
• Assured Benefit (Total Premiums Paid less Total Partial Withdrawals made (if any)).

HDFC Life Smart Protect plan – Loyalty Additions Review

The product offers loyalty additions at different points during the policy term.

Return of 2X to 3X Mortality Charge

The product offers a return of 2 to 3 times the mortality charges starting from policy year 11. The addition is in the form of extra units.

Policy year 11 – 10 – 2 times

Policy year 31 – 40 – 3 times

Return of 2X Premium Allocation Charge

2 times the total Premium Allocation Charges (excluding taxes) shall be added back in the form of allocation of extra units. The addition will happen at the end of each of the years between 10 to 13 years.

Return of Fund Management Charge (FMC)

At maturity, the total of FMC charges (excluding taxes) collected throughout the policy term will become payable.

Return of 2X of Investment Guarantee Charge

This will be available only under Option B (Level Cover with Capital Guarantee) and Option D (Decreasing Cover with Capital Guarantee). At maturity, 2 times of total of guarantee charges (excluding taxes) collected throughout the policy term will become payable.

HDFC Life Smart Protect plan – Other Benefits – Review

Switching

The option to switch funds is available under Option A (Level Cover) and Option C (Decreasing Cover). Under this option, you have the option to switch your investment or a part thereof from one fund to another fund (s) available under this product during the Policy Term. It is allowed for an unlimited number of times.

Premium Redirection

Premium Redirection is available under Option A (Level Cover) and Option C (Decreasing Cover).

It allows you to calculate and allocate your future premiums to a different fund or set of funds. Premium Re-direction will not be allowed if Systematic Transfer Plan (STP) is chosen.

Partial Withdrawal

You have the option to withdraw money from your funds to meet any future financial emergencies, through Partial Withdrawals. It shall be allowed only after the completion of five policy years.

Top-Up Premium

The Policyholder has the option of paying Top-up premiums, provided the policy is in force.

This is only available under Option A (Level Cover) and Option C (Decreasing Cover). It is not permitted during the last 5 years of the contract. The minimum Top-up amount is calculated at Rs. 5,000.

Settlement Option

The Policyholder has the option to take the Fund Value payable as Maturity, in lumpsum, or in periodical installments over a Settlement Period which may extend to a maximum of 5 years after the Maturity Date. The first installment under the settlement option shall be payable on the date of maturity.

Option to Reduce Sum Assured

At any policy anniversary, the Policyholder will have the option to reduce Sum Assured. If opted under Option C (Decreasing Cover) or Option D (Decreasing Cover with Capital Guarantee), the Policy will continue with a reduced Sum Assured as calculated under this option and no further decrease will be applicable.

Various Charges under HDFC Life Smart Protect Plan

Premium Allocation Charge

Policy Year	Year 1	Year 2	Year 3	Year 4	Year 5+
Annualized Premium < 2.5 lacs	12%	6%	4%	3%	0%
Annualized Premium >=2.5 lacs	11%	5%	4%	3%	0%
A premium allocation charge of 2% shall be levied on top-up premiums.

Policy Administration Charge

Policy Year	% of Annualized Premium charged per month
Years 1 to 4	Nil
Year 5 and subsequent years	0.32% per month of the annualized premium increasing to 5% per annum on each policy anniversary

Fund Management Charge

1.35% p.a. of the fund value for all the funds, charged daily. The Fund Management Charge for Discontinued Policy Fund shall be 0.50% p.a.

Mortality Charge

The mortality Charge is calculated as the Sum at Risk (SAR) multiplied by the applicable Mortality Charge Rate for the month, based on the attained age of the Life Assured. The Sum at Risk for Life Assured is Death Benefit less Fund Value.

Investment Guarantee Charge

This will be applicable only for Option B (Level Cover with Capital Guarantee) and Option D (Decreasing Cover with Capital Guarantee). This will be charged daily, as a % of Fund Value.

Fund	Investment Guarantee Charge
Capital Growth Fund	0.5% p.a.
Capital Secure Fund

Discontinuance Charge

This charge depends on the year of discontinuance and your annualized premium. This charge is not applicable from the 5th policy year onwards.

Partial Withdrawal Charge, Switching Charge, Premium Redirection Charge & Miscellaneous Charge

Nil

Inference from the charges – Most of the market-linked products levy charges just to manage the fund. But here there are some extra charges like investment guarantee charge, discontinuance charge, etc. These charges will bring down the return in the long run.

A grace period, Discontinuance & Revival of HDFC Life Smart Protect plan

Grace period:

This plan has a grace period of 15 days for the monthly mode and 30 days for other modes.

Discontinuance:

Discontinuance of Policy during the lock-in-Period (5 years) –

Policyholders (single premium policies) can avail of tax benefits under Section 80C of the Income Tax Act, 1961. The premiums paid are deductible from the policyholder’s taxable income till the limit of ₹1.5 lakhs.

For other than single premium policies, the fund value after deducting the applicable discontinuance charges, shall be credited to the discontinued policy fund, and the risk cover and rider cover, if any, shall cease.

Discontinuance of Policy after the lock-in-Period (5 years) –

The policy shall be converted into a reduced paid-up policy with the paid-up sum assured i.e., the original sum assured multiplied by the total number of premiums paid to the original number of premiums payable as per the terms and conditions of the policy.

Revival:

You have the option to revive a discontinued policy within three consecutive years from the date of the first unpaid premium.

Free Look Period – HDFC Life Smart Protect

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.

Surrendering HDFC Life Smart Protect

In the case of Single premium policies, the policyholder has the option to surrender at any time during the lock-in period. Upon receipt of the request for surrender, the fund value, after deducting the applicable discontinuance charges, shall be credited to the discontinued policy fund. On completion of the lock-in period (5 years), the fund value as of date shall be payable.

In case of other than single premium policies –

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 shall be paid at the end of the lock-in period (5 years)

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 Smart Protect

• The policy offers a wide range of plan options like decreasing cover & capital guarantee.
• The plan returns some of the charges like mortality charges, Fund management charges, and Investment guarantee charges within the policy term.
• Top-up premiums increase your fund value.
• There is no Partial Withdrawal Charge, Switching Charge, Premium Redirection Charge & Miscellaneous Charge.
• Riders can be added to the base policy.

Disadvantages of HDFC Life Smart Protect

• The loan option is not available.
• Although the plan returns some of the charges, it doesn’t consider the time value of money.
• The lock-in period is 5 years for partial withdrawal or surrender.
• Some of the extra benefits are available under some plan options only.

Research Methodology

HDFC Life Smart Protect Plan invests in market-linked products. To estimate the potential return of this plan, let us analyze the benefit illustration taken from the HDFC portal. The estimated return can be compared with other investment products. This comparison will give you clarity in choosing your financial instrument.

HDFC Life Smart Protect plan – Benefit Illustration – IRR Analysis

A 30-year-old male buys HDFC Life Smart Protect under Option A Level cover. The Sum Assured is ₹ 1 crore & the annual premium is ₹ 1 Lakh. The premium paying term is 12 years & the policy term is 25 years.

Male	30 years
Sum Assured	1 Crore
Policy Term	25 years
Premium Paying Term	12 years
Annual premium	1 lakh

The assumed rates of returns (8% & 4%) are not guaranteed and they are not the upper or lower limits of what you might get back, as the value of the policy is dependent on several factors including future investment performance.

If he pays the premium regularly, at the end of 25 years, he would be receiving the fund value. Here the fund value @8% is ₹ 38.14 lakhs & @ 4% is ₹ 17.59 lakhs.

		At 4% p.a.		At 8% p.a.
Age	Year	Annualized premium / Maturity benefit	Death benefit	Annualized premium / Maturity benefit	Death benefit
30	1	-1,00,000	1,00,00,000	-1,00,000	1,00,00,000
31	2	-1,00,000	1,00,00,000	-1,00,000	1,00,00,000
32	3	-1,00,000	1,00,00,000	-1,00,000	1,00,00,000
33	4	-1,00,000	1,00,00,000	-1,00,000	1,00,00,000
34	5	-1,00,000	1,00,00,000	-1,00,000	1,00,00,000
35	6	-1,00,000	1,00,00,000	-1,00,000	1,00,00,000
36	7	-1,00,000	1,00,00,000	-1,00,000	1,00,00,000
37	8	-1,00,000	1,00,00,000	-1,00,000	1,00,00,000
38	9	-1,00,000	1,00,00,000	-1,00,000	1,00,00,000
39	10	-1,00,000	1,00,00,000	-1,00,000	1,00,00,000
40	11	-1,00,000	1,00,00,000	-1,00,000	1,00,00,000
41	12	-1,00,000	1,00,00,000	-1,00,000	1,00,00,000
42	13	0	1,00,00,000	0	1,00,00,000
43	14	0	1,00,00,000	0	1,00,00,000
44	15	0	1,00,00,000	0	1,00,00,000
45	16	0	1,00,00,000	0	1,00,00,000
46	17	0	1,00,00,000	0	1,00,00,000
47	18	0	1,00,00,000	0	1,00,00,000
48	19	0	1,00,00,000	0	1,00,00,000
49	20	0	1,00,00,000	0	1,00,00,000
50	21	0	1,00,00,000	0	1,00,00,000
51	22	0	1,00,00,000	0	1,00,00,000
52	23	0	1,00,00,000	0	1,00,00,000
53	24	0	1,00,00,000	0	1,00,00,000
54	25	0	1,00,00,000	0	1,00,00,000
55		17,59,884	1,00,00,000	38,14,623	1,00,00,000
		1.97%		6.00%

The IRR for the best-case scenario @ 8% return is 6% & for the worst-case scenario @ 4% return is 1.97%. This is a long-term investment (25 years policy term), but the IRR doesn’t hold good for a long-term investment. Under the HDFC Life Smart Protect plan, the fund value at the end of 25 years won’t be sufficient to fulfill the inflated cost of your goal.

Click the below link for HDFC Financial Tools & Premium Calculators

Financial Tools & Premium Calculators

Comparison of HDFC Life Smart Protect plan with other investments

Any long-term investment should combat inflation. But the potential return from the HDFC Life Smart Protect plan is less than the inflation rate.

In order to fulfill your goals, there are other products available in the market which yields better return & also offer better liquidity with good fund performance. Let us look for other products & find out the return if we invest the same amount.

HDFC Life Smart Protect Plan Vs HDFC Life Sampoorn Nivesh Plan – Review

Both the plans are ULIP and Sampoorna Raksha has the option to choose from 10 different funds.

Please click below to read the review of HDFC Life Sampoorn Nivesh Plan

HDFC Life Sampoorn Nivesh Plan Review (2023): Good or Bad?

HDFC Life Smart Protect Plan Vs HDFC Life Super Income Plan – Review

HDFC Life Super Income Plan is a non-linked participating and limited pay money-back insurance plan. This insurance plan offers guaranteed income to the policyholder for 8-15 years.

To know more about HDFC Life Super Income Plan please click the below review.

You can get a comprehensive view of the good and bad aspects of both plans after reading this review.

HDFC Life Super Income Plan Review: Should you buy or not?

HDFC Life Smart Protect Plan Vs. Pure Term Insurance + PPF / ELSS

For comparison purpose, all the metric like the sum assured, and policy term is assumed similar to the above illustration. The annual premium in the illustration is ₹ 1 lakh. We can utilize this amount for life cover & invest separately for life goals.

Pure term insurance for a sum assured of ₹ 1 crore would cost ₹21,500. The policy term is 25 years & the premium paying term is 10 years. So, the balance amount of ₹ 78,500 could be utilized for investment.

Pure Term Insurance
Sum Assured	1 Crore
Policy Term	25 years
Premium Paying Term	10 years
Annual premium	21,500
Investment	78,500

In the earlier illustration, the premium paying term is 12 years. Here for pure term life insurance, the premium paying term is 10 years. So, in the last 2 years, the full amount of ₹ 1 lakh could be utilized for investment.

We have chosen one risk-free instrument – PPF & one high-risk instrument – ELSS for investment. You can choose the product of your choice based on your risk appetite.

For PPF, there is a lock-in period of 15 years with a minimum contribution. As we have assumed a premium paying term of only 12 years, adjustments were made in the last 3 years’ contribution (Minimum contribution ₹ 500 p.a.).

ELSS redemptions are taxable. The capital gains tax is worked out & the post-tax value is taken for IRR calculation. The tax calculation is given below.

		Term Insurance + PPF		Term insurance + ELSS
Age	Year	Term Insurance premium + PPF	Death benefit	Term Insurance premium + ELSS	Death benefit
30	1	-1,00,000	1,00,00,000	-1,00,000	1,00,00,000
31	2	-1,00,000	1,00,00,000	-1,00,000	1,00,00,000
32	3	-1,00,000	1,00,00,000	-1,00,000	1,00,00,000
33	4	-1,00,000	1,00,00,000	-1,00,000	1,00,00,000
34	5	-1,00,000	1,00,00,000	-1,00,000	1,00,00,000
35	6	-1,00,000	1,00,00,000	-1,00,000	1,00,00,000
36	7	-1,00,000	1,00,00,000	-1,00,000	1,00,00,000
37	8	-1,00,000	1,00,00,000	-1,00,000	1,00,00,000
38	9	-1,00,000	1,00,00,000	-1,00,000	1,00,00,000
39	10	-1,00,000	1,00,00,000	-1,00,000	1,00,00,000
40	11	-1,00,000	1,00,00,000	-1,00,000	1,00,00,000
41	12	-98,500	1,00,00,000	-1,00,000	1,00,00,000
42	13	-500	1,00,00,000	0	1,00,00,000
43	14	-500	1,00,00,000	0	1,00,00,000
44	15	-500	1,00,00,000	0	1,00,00,000
45	16	0	1,00,00,000	0	1,00,00,000
46	17	0	1,00,00,000	0	1,00,00,000
47	18	0	1,00,00,000	0	1,00,00,000
48	19	0	1,00,00,000	0	1,00,00,000
49	20	0	1,00,00,000	0	1,00,00,000
50	21	0	1,00,00,000	0	1,00,00,000
51	22	0	1,00,00,000	0	1,00,00,000
52	23	0	1,00,00,000	0	1,00,00,000
53	24	0	1,00,00,000	0	1,00,00,000
54	25	0	1,00,00,000	0	1,00,00,000
55		38,06,045	1,00,00,000	86,41,534	1,00,00,000
		5.99%		10.33%

ELSS Tax Calculation
Maturity value after 25 years	94,81,149
Less
Purchase price	9,85,000
Long-term capital gains	84,96,149
Exemption limit	1,00,000
Taxable LTCG	83,96,149
Tax paid on LTCG	8,39,615
Maturity value after tax	86,41,534

The IRR of 8% scenario under the HDFC Smart Protect Plan & the IRR for Pure term + PPF seems to be the same. But HDFC Life Smart Protect Plan invests in the equity market whereas here PPF is a debt instrument. This shows that HDFC Life Smart Protect which is a market-linked product couldn’t match the debt instrument return.

The IRR for Pure Term + ELSS combo is 10.33% (Post-tax return). This will help you in achieving the goals as the return is much higher than the inflation rate.

HDFC Life Smart Protect vs Other Investment Options – Comparison Review

After a thorough and detailed analysis of all the alternatives of HDFC Life Smart Protect. It seems that ELSS and PPF are far better options and the calculated returns are higher combined with good fund performance.

We should not get carried away by the glitz of new plans in the market. But, compare and review it with traditional investment plans.

Most of the time, after a comprehensive review. Term Insurance + PPF+ ELSS combined investment plans seem to be better options.

Final verdict on HDFC Life Smart Protect

HDFC Life Smart Protect Plan provides a dual benefit of life insurance coverage and investment growth.

A portion of the premium paid goes towards providing life insurance protection, while the remaining amount is invested in the chosen investment funds.

It offers flexibility in terms of investment choices. Policyholders can select from various investment funds based on their risk appetite and financial goals.

Like most policies in the bazaar,

it’s important to note that these ULIPs come with certain charges, including premium allocation charges, policy administration charges, fund management charges, investment strategy charges, and mortality charges.

Only a few charges are returned & added back to the fund without considering the time value of the money. These charges will eventually pull down the potential return.

Alternatively, pure term insurance for life cover & investing separately for life goals is the best viable option.

Build an investment portfolio to meet all your goals. Moreover, to combat inflation in the long run, investing in a well-diversified portfolio is more important. it is advisable to thoroughly understand the policy terms, charges, and investment options before investing in a ULIP.

Please don’t get carried away by amateur bits of advice on social media platforms like Quora, Twitter, Facebook, etc. It is always wise to take the help of a professional financial planner.