Term insurance is the simplest and most fundamental insurance product. Term insurance plans are designed to ensure that in the event of the policyholder’s death, the family gets the sum assured (the cover amount).
Term plan provides risk coverage for a certain period of time (policy term/duration). If the insured dies during the time period specified in the policy and the policy is active (or) in force, a death benefit will be paid. It is the cheapest form of Life insurance in terms of premium.
Almost each and every insurer now offers Term insurance plan(s). HDFC Life’s Click 2 Protect Plus is one among the very popular term insurance plans that are currently available in the market. HDFC Life has recently launched a new version of this plan, with more options, called as ‘ HDFC Life Click 2 Protect 3D Plus ’. As per HDFC Life, this new plan provides cover for 3Ds – Death, Disease and Disability.
In this article, let’s understand the key features, benefits, options and pros/cons of HDFC Life’s new term insurance plan – Click 2 Protect 3D plus.
HDFC Life Click 2 Protect 3D Plus – Key Features
- Plan Options: This new Term insurance plan offers you a choice of 9 plan options.
- Waiver of Premiums : All future premiums are waived on Accidental Total Permanent Disability (available under all options) and on diagnosis of Critical Illness (Available with 3D Life and 3D Life Long Protection options).
- Whole-life Protection : Protect yourself for whole of life with lifelong protection option. (Available under Life long protection option & 3D Life Long Protection Option)
- Life Stage Protection: This feature offers you to increase insurance cover on certain key milestones without medicals. This is available for all 9 plan options. Under this feature, you have the option to increase the basic Sum Assured without underwriting on any of the below specified events in the life of the Life Assured ;
- 1st Marriage : 50% of Sum Assured subject to a maximum of Rs. 50 lakh
- Birth of 1st child : 25% of Sum Assured subject to a maximum of Rs. 25 lakh
- Birth of 2nd child : 25% of Sum Assured subject to a maximum of Rs. 25 lakh
- The Life Assured has to be less than 45 years of age at the time of the above mentioned events.
- This option will be available only for a period of six months from the date of the above specified events.
- An additional premium will be charged for an increase in the Sum Assured.
- This option shall be available only if no claim has been made under the policy, eg. Waiver of premium on ATPD, Critical Illness etc. (or) under any rider.
- Top-up option : This plan offer you a flexibility to increase your cover every year through top-up option. This option can be exercised only at the policy inception. The increased benefit will continue till earlier of the increased Sum Insured becomes 200% of the Initial Sum Insured (or) happening on Claim event. (An additional premium will be charged for the increase in the Sum Assured. The incremental cover as well as the incremental premium, both, will apply prospectively. The policyholder has the option to exit this option at any time during the remaining policy term.)
- Special premium rates for female lives
Options under HDFC Life’s new Term insurance Plan – Click 2 Protect 3D Plus
The options under this new Term life insurance plan can be divided as below ;
- Lump sum payment on death or on diagnosis of terminal illness
1) Life Option : Under this option your nominee gets a Lumpsum Benefit on death or diagnosis of Terminal Illness. Your future premiums are waived upon Accidental Total Permanent Disability (ATPD). (What is Terminal Illness ? – A life assured shall be regarded as terminally ill only if that life assured is diagnosed as suffering from a condition which, in the opinion of two independent medical practitioners’ specializing in treatment of such illness, is highly likely to lead to death within 6 months.)
2) 3D Life Option : In addition to the benefits under Life Option, you will receive an additional benefit of waiver of your future premiums upon diagnosis of Critical Illness. (Kindly refer to product brochure for the list of 34 Critical illnesses that are covered under this plan)
3) Extra Life Option : In addition to the benefits under Life Option, your nominee will get an additional Extra Life Sum Assured upon death due to Accident.
- Lump sum Income payment and/or Monthly Income payment on death or on diagnosis of terminal illness. The Minimum income term is 1 month and upto a maximum of 20 years can be chosen. The income period shall commence immediately on death and continue for the chosen income period.
4) Income Option : This plan option is ideal if you wish to provide your nominee with a Lump sum benefit and a level or a increasing stream of Income in your absence. Also, your future premiums are waived upon Accidental Total Permanent Disability (ATPD).
5) Extra Life Income Option : In addition to the benefits under Income Option, an additional Lump sum & Income benefit is paid upon death due to accident. Also, your future premiums are waived upon Accidental Total Permanent Disability (ATPD).
6) Income Replacement Option : Under this option, your nominee would receive 12 times the then increased monthly income as lump sum death benefit and will also receive level or increasing income stream. Also, your future premiums are waived upon Accidental Total Permanent Disability (ATPD).
- Fixed Premium Paying Term and whole-life protection. Under these options, you need to pay premium for fixed term and the life cover is provided for whole-life. (Premium Paying Term = 65 – Age at entry)
7) Life long protection option : You are protected for your entire life. Your nominee gets a Lump sum Benefit on death or diagnosis of Terminal Illness. Also, your future premiums are waived upon Accidental Total Permanent Disability.
8) 3D Life long protection option : In addition to the benefits under Life Long Protection Option, you will receive an additional benefit of waiver of your future premiums upon diagnosis of Critical Illness.
9) Return of Premium Option : Under this plan option, you will get back all your premiums if you survive till the end of the Policy Term. On death/ diagnosis of Terminal Illness during the Policy Term a Lumpsum benefit will be paid to your nominee. Also, all your future premiums are waived upon ATPD.
HDFC Click2Protect 3D Plus Policy Options & Indicative Premium Quotations
Let’s now understand the applicable premium rates and benefits under different plan options with an example.
The below premium quotes are for a 30 year old male Policyholder (non-smoker), for Sum Assured of Rs 1 crore with 30 year policy term. The Premium payment term for Life long Protection & 3D Life Long Protection options is 35 years (PPT = 65-30 years, policyholder’s current age).
Accidental Death benefit of Rs 1 cr has been considered for options ‘Extra Life’ & ‘Extra Life Income’. All Income Options have been considered with Rs 50,000 per month as monthly income on death, with an increasing rate of 5% per year for 20 year income period. Under Income Replacement option, the rate of increase of income is fixed at 10%.
My views on HDFC Life Click 2 Protect 3D Plus Plan
If you are planning to buy a life insurance plan with an adequate life cover (sum assured) at affordable premium rate then Term insurance plan is the best choice. There is no doubt about this! But do we need to have these many options under a Term insurance plan. Is n’t it a simple life cover option enough?? Yes, a term plan with just a basic cover is more than enough to meet your life cover requirement.
Below are some of the points to ponder upon when considering Click 2 Protect 3D plus policy;
- More Options, More complexity : To be frank, I have spent good amount of time to go through all the options & scenarios available under this plan and to comprehend these options. If you are considering to buy this plan, you have to carefully go through all the rules and eligibility conditions that are applicable under each option / feature.
- No Comprehensive Plan option : If you notice the above Plan option table, none of these plan options has all the available features.
- More Features, Higher Premium Rates : If you look at the above premium quotes, a basic life cover option ‘Life Option’ (or) 3D Life option is available at affordable premium rates, whereas, if you would like to have more features to the base plan, you need to pay more.
- Fixed Premium Term : The premium term is fixed under Life long protection & 3D Life Long Protection plan options. The policyholder has to pay the premiums till he/she attains 65 years of age.
- No Comprehensive Permanent Disability Cover : Kindly note that this plan has an in-built feature of ‘waiving of premiums on Accidental Total Permanent Disability’ under plan options. But, no lump sum benefit or fixed regular amount is not payable on total permanent disability. I believe that one should not only consider a Term plan with adequate life cover but also should take a comprehensive Personal Accident Policy, which provides Accidental Death Benefit and also covers Accidental Total Permanent Disability. So, either you need to add a separate Accidental Death Benefit Rider to this plan or has to take a stand-alone Personal Accident Insurance policy. (Read : ‘Best Personal Accident Insurance plans‘)
- No Comprehensive Critical Illness cover – Same as the above point. You may have to take a separate CI rider or CI plan. Also, Critical illness feature is available only with 3D Life option and 3D Life Long option, subject to certain conditions.
- Monthly Income Options : You need to select the monthly income (quantum) and its term (income period) at the inception of the policy itself. An individual’s life can not be predicted in advance. It’s not prudent to fix a monthly income / period now and pay premiums as per this selection.
- Preferred Options : Term insurance plan from any life insurance company should be ok. You need to just opt for a base cover as per your requirements / affordability and disclose all the required information in proposal form accurately. In case, you have shortlisted HDFC Life as your preferred insurer, you may consider Life Option or 3D Life Option of Click 2 Protect 3D Plus plan.
Continue reading :
- If Life is unpredictable, INSURANCE can’t be optional!
- Traditional Life insurance plan – a terrible Investment option?
- Best Term insurance plans – Comparison & Review
- Is Term insurance a waste of money?
(Image courtesy of fantasista at FreeDigitalPhotos.net.) (Reference & Courtesy : HDFC Life Click 2 Protect 3D Plus product brochure) (Post first published on : 25-May-2017)