In this article we explore Click 2 Protect Plus from HDFC Life Insurance Company. Click 2 Protect Plus is a traditional non-participating term insurance plan. For individuals who are not aware what is a term plan, it is a life insurance plan that pays a lumpsum amount to the family members of the life insured in the event of death of the life insured during the tenure of the life insurance plan. Click 2 Protect Plus plan comes with a range of cover options as compared to the term insurance plans of some other life insurance companies. The cover options provided under Click 2 Protect Plus include:
|
Cover Option |
Explanation |
| Life Option | On the death of the life insured 100% of the policy sum assured is paid as a lumpsum amount. The Life Option also comes with the optional ‘Life Stage Protection’ feature under which the life insured can increase the life insurance cover on certain key milestones of life like marriage (50% increase in basic sum assured) and / or child birth (25% increase in basic sum assured) without medical check-up at that point of time. |
| Extra Life Option | On the death of the life insured 100% of the policy sum assured is paid as lumpsum amount along with an additional lumpsum amount if the life insured dies due to an accident. |
| Income Option | On the death of the life insured 10% of the sum assured (lumpsum) + 0.5% of the sum assured per month for 15 years is paid. |
| Income Plus Option | On the death of the life insured 100% of the sum assured (lumpsum) + 0.5% of the sum assured per month for 10 years is paid. The life insured can opt for level monthly income (equal / same every month) or monthly income increasing at 10% p.a. |
The policyholder has to choose the plan option that he / she wants to go for at the time of buying the plan. The plan option once chosen cannot be changed during the tenure of the policy.
We will discuss more in detail about the cover options later in the article. Let us now look at the basic features of the plan.
Comprehensive coverage at affordable cost: Click 2 Protect Plus plan provides comprehensive coverage at an affordable cost. A 25 year old male can get a life insurance cover of Rs. 1 crore (under income option) for tenure of 30 years by paying a premium of just Rs. 567 per month (exclusive of taxes). The cover provides financial protection to the individual and family members. The plan provides a death benefit amount in the unfortunate event of death of the life insured anytime during the policy term based on the option chosen by the life insured at the time of buying the plan. This amount would help the family to pay any outstanding debts or fund the day to day expenses, thus easing the financial worries of the family.
(The above mentioned monthly premium is as on January 2015. For the latest premium rates please check with HDFC Life).
|
Feature |
Explanation |
| Minimum age at entry | 18 years. This basically means that you should be of 18 years or above if you wish to buy this plan. |
| Maximum age at entry | 65 years. This basically means individuals who have completed 65 years or above cannot buy this plan. |
| Maximum age at maturity | 75 years. This basically means this plan will end for all individuals who complete 75 years of age. |
| Plan tenure | Individual can choose any term from 10 years to 40 years subject to maximum maturity age of 75 years. |
| Premium payment options | Single pay (you pay premium once),
Limited pay (you pay premiums for your chosen policy term less 5 years) and Regular pay (you pay premiums throughout the chosen policy term) |
| Premium payment frequency | Single, yearly, half-yearly, quarterly and monthly
If the monthly option is chosen then the individual has to opt for ECS / Standing Instruction (SI) and pay first 3 months premium in advance |
| Minimum Sum Assured | Rs. 25 Lakhs |
| Maximum Sum Assured | No limit (subject to satisfactory underwriting) |
| Minimum annualised premium | Rs. 3,000 |
| Tax Benefits | Section 80C: The premium paid under this policy qualifies for deduction from taxable income up to Rs. 1,50,000 in a Financial Year
Section 10 (10D): The death benefit amount received under this policy by the family members of the life insured is exempt from tax, subject to conditions specified therein. |
Options available under the plan
Now that you understand the basic features of the plan, let us now understand the cover options available under this plan in detail.
Option 1: Life Option
This is the most basic option available under this plan. Under this option, in the event of death of the life insured during the tenure of the plan, the nominee will receive the sum assured as a lumpsum payment.
Under the life option, the Life Stage Protection option is also available to the life insured. With this option you can increase and decrease your cover when you reach certain milestones.
Increase in cover: Under this option you can increase the basic life insurance cover (without any medical tests) when you reach certain milestones in life in the following ways:
| Event | Additional Sum Assured (% of basic sum assured) |
| Marriage | 50% (subject to a maximum of Rs. 50 lakhs) |
| Birth of 1st child | 25% (subject to a maximum of Rs. 25 lakhs) |
| Birth of 2nd child | 25% (subject to a maximum of Rs. 25 lakhs) |
For example Rajesh has taken a basic life insurance cover of Rs. 1.5 crores. Rajesh can increase his life insurance cover when he reaches certain milestones in life in the following ways:
Marriage: Rajesh can increase his cover by a maximum of Rs. 50 lakhs. Even though 50% of Rs. 1.5 crore is Rs. 75 lakhs, the maximum cap on the increase in cover during marriage event is Rs. 50 lakhs.
Birth of 1st Child: Rajesh can increase his cover by a maximum of Rs. 25 lakhs. Even though 25% of Rs. 1.5 crore is Rs. 37.5 lakhs, the maximum cap on the increase in cover during marriage event is Rs. 25 lakhs.
If you opt for increase in cover during any of these events, your premium will be recalculated based on your increased Sum Assured and outstanding policy term. The policyholder has to decide within six months from the date of the event (marriage, child birth) if he / she would like to increase the insurance cover.
Decrease in cover: Under this option you can decrease the life insurance cover (if you have chosen to increase your life cover during marriage and / or child birth event) after you have attained the age of 45 years. Under this option your life cover will be reset to the original (basic) sum assured at inception. For example Rajesh opted to increase his Rs. 1.5 crore cover by Rs. 50 lakhs (during marriage event) and by Rs. 25 lakhs (during child birth event) totalling a cover of Rs. 2.25 crores. Under the ‘decrease in cover’ option, Rajesh can opt to reset his cover from the increased cover amount of Rs. 2.25 crore to the original cover amount of Rs. 1.5 crore after he attains the age of 45 years. In this case Rajesh’s premium will be recalculated (revised down) based on revised sum assured for the remainder of the premium paying term.
Option 2: Extra Life Option
Under Extra Life Option, in the event of death of the life insured due to an accident during the tenure of the plan, the nominee will receive the sum assured as a lumpsum payment + an additional lumpsum amount (equal to the Sum Assured).
Option 3: Income Option
Under the income option, 10% of the sum assured is paid as a lump sum upon death of the life insured and the remaining 90% of the sum assured shall be paid as monthly income over next 15 years (0.5% of sum assured every month for 15 years).
For example, Amar has opted for an insurance cover of Rs. 50 lakhs. In the event of Amar’s death, 10% of the death benefit (Rs. 5 lakhs) will be paid as lumpsum to Amar’s family members. The remaining Rs. 45 lakhs will be paid as monthly income over the next 15 years to Amar’s family i.e. Rs. 25,000 per month (0.5% of sum assured of Rs. 50 lakh) for 15 years (180 months).
Option 4: Income Plus Option
Under this option, 100% of the sum assured shall be paid as a lumpsum upon death of the life insured. In addition, a monthly income equal to 0.5% of the Sum Assured shall be payable for a period of 10 years.
For example, Amar has opted for an insurance cover of Rs. 50 lakhs. In the event of Amar’s death, Rs. 50 lakhs will be paid as lumpsum to Amar’s family members. In addition a monthly income of Rs. 25,000 (0.5% of sum assured of Rs. 50 lakhs) shall be payable to Amar’s family members for a period of 10 years (120 months).
Under the income plus option, the policyholder has the option of receiving monthly income which can be level (same every month) or increasing @ 10% per annum.
Under the increasing monthly income scenario this is how it will be done. For example, Amar has opted for an insurance cover of Rs. 50 lakhs. In the event of Amar’s death, Rs. 50 lakhs will be paid as lumpsum to Amar’s family members. In addition, for the first year after Amar’s death, a monthly income of Rs. 25,000 (0.5% of sum assured of Rs. 50 lakhs) shall be payable to Amar’s family members. For the second year the monthly income will increase by 10% to Rs. 27,500 from Rs. 25,000. In this manner the monthly income will keep increase by 10% every year for a total of 10 years.
The above mentioned income option and income plus option are good for people who would like to secure their family’s monthly expenses requirement when they are not around to take care of it.
So let us once again summarise the cover options under this plan through the below table. We have also shown the annual premiums (exclusive of service tax) payable under each cover option for a 30 year old male (non-smoker) for 30 years for a basic cover of Rs. 1 crore.
|
Plan Option |
Cover |
Annual Premium |
| Life Option | 100% of sum assured paid as lumpsum. Life Stage Protection option is also available to increase cover after marriage (50% increase in cover) and / or child birth (25% increase in cover). After age 45 years, the cover can be brought down to the original cover. |
Rs. 9,024 p.a. |
| Extra Life Option | 100% of sum assured paid as lumpsum + Accidental Death Benefit paid as lumpsum |
Rs. 14,018 p.a. In this case in the event of death due to accident Rs. 2 crore (Rs. 1 crore base sum assured + Rs. 1 crore accidental death benefit) will be paid. If the death is not due to accident then base cover amount of Rs. 1 crore will be paid. |
| Income Option | 10% of sum assured paid as lumpsum + Remaining 90% sum assured is paid in the form of monthly income (0.5% of sum assured) over a period of 15 years |
Rs. 7,580 p.a. In this case Rs. 10 lakhs will be paid on death and remaining Rs. 90 lakhs is divided in to an equal monthly income of Rs. 50,000 for a period of 15 years as a payout |
| Income Plus Option | 100% of sum assured paid as lumpsum + Additional monthly income equal to 0.5% of Sum Assured becomes payable for a period of 10 years. The monthly income can be level or increasing at 10% p.a. as chosen by the policyholder at the time of buying the policy |
Rs. 12,183 p.a. (for equal monthly income payout) Rs. 13,536 p.a. (for 10% annually increasing monthly income payout) In this case Rs. 1 crore will be paid on death and an additional Rs. 50,000 per month will be paid for the next 10 years. |
The plan cover option has to be chosen at inception of the policy and once chosen can’t be changed during the tenure of the policy.
Suicide exclusion: In case of death due to suicide, within 12 months from the date of inception of the policy, the nominee of the policyholder shall be entitled to 80% of the premiums paid.
Let us now compare the basic version of the plan (life option) in terms of features, claim settlement ratio and premium amount with other online plans available in the market. The premium calculated is for a 30 year old male, non-smoker, who has taken sum assured of Rs. 1 crore for a period of 30 years.
|
Policy Name |
Mode |
Policy Term |
Maximum age at maturity |
Minimum Sum Assured |
Claim Settlement Ratio (2013-14) |
Annual Premium |
| HDFC Life Click 2 Protect Plus | Online | 10-40 years | 75 years | Rs. 25 lakhs |
94.01 |
Rs. 9,024 |
| Max Life Online Term Plan - Basic Life cover option | Online | 10-35 years | 70 years | Rs. 25 lakhs |
93.86 |
Rs. 7,400 |
| LIC e-Term | Online | 10-35 years | 75 years | Rs. 25 lakhs |
98.14 |
Rs. 15,700 |
| SBI Life eShield | Online | 5-30 years | 70 years | Rs. 20 lakhs |
91.06 |
Rs. 11,690 |
| Kotak Preferred e-Term Plan | Online | 10-40 years | 75 years | Rs. 25 lakhs |
90.69 |
Rs. 7,375 |
Please note:
a) The claim settlement ratio data for respective year has been taken from the IRDA Annual Report for respective year. The claim settlement ratio is overall for the company for all products taken together and not just for term plans.
b) All premiums amounts have been taken from the respective company website. All the premium amounts mentioned are exclusive of service tax.
c) The premiums shown in the above table are for a 30 year old male (non-smoker) for a sum assured of Rs. 1 crore for a term of 30 years.
d) These premium amounts are as on Jan 2015. Interested buyers are requested to recheck these quotes with respective insurance companies before purchasing a term plan. These rates may not be fixed and are subject to change.
e) Last but not the least; we are not representing any particular insurance company 
As we can see from the above table the premium for HDFC Life Click 2 Protect Plus plan (Rs.9,024) is lower as compared to premium for LIC e-Term plan (Rs. 15,700) and SBI Life eShield (11,690) but higher as compared Max Life Online Term Plan - Basic Life Cover option (Rs. 7,400) and Kotak Preferred e-Term Plan (Rs. 7,375). The claim settlement ratio of HDFC Life (94.01) is slightly better than Max Life Insurance (93.86), SBI Life (91.06) and Kotak Life Insurance (90.69).
Conclusion
Considering all the above features of the plan, overall we believe HDFC Life’s Click 2 Protect Plus Plan is a good plan to have. What are the requirements that can be fulfilled through this plan? Someone who is looking for a term plan with a range of cover options like:
a) Additional accidental death benefit or
b) Increasing life cover during important milestones of life or
c) Partial lumpsum payment to family members after death and remaining in monthly payments or
d) Big lumpsum payment to family members after death and additional monthly payments
If you also have one or more of the above listed requirements, then HDFC Life Click 2 Protect Plus plan is for you.
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