HDFC Life Click 2 Invest ULIP plan has created a huge buzz by offering Zero Allocation Charges. In-fact this is the first online ULIP plan with 100% Premium Allocation, No Policy Administration Charge, No discontinuance charges and Only FMC & Mortality Charges applicable.
This plan has many other benefits on paper to get customer attraction, but does HDFC Life Click 2 Invest really able to clean the image of ULIP plans in our country?
Let’s review HDFC Life Click 2 Invest Ulip plan and find out whether this plan deserve a place in your income tax saving investment.
HDFC Click 2 Invest Ulip Plan Key features
Before proceeding with our typical calculation of long term return and finding the best alternative let’s check out the key features this plan is offering
Don’t Miss HDFC Life Child Insurance Plan Review
- This plan is called as Super ULIP as Zero Allocation Charges.
- The good thing is, there is no discontinuation charges, at least some relief for those who want to surrender this plan in future after realizing the fact of ULIP plans.
- But you can’t surrender this plan before 5 year. So here is the tweak HDFC Life applied.
- One can choose from 8 different types of funds between Equity or Balanced fund or Debt fund.
- One can go for 4 free switches between funds in a year. Beyond that will be chargeable.
- One can go for partial-withdrawal after completing of 5 year.
- On death of policy holder his/her family will get highest of these 3: Sum assured or Fund value or 105% of premium paid
- You can buy HDFC Life Click 2 Invest ULIP plan online.
- Maximum term is available 20 years only.
- Pay premium for entire term or choose between terms (5 years, 7 years, and 10 years) available under Limited Investment term.
- On maturity survivor will get the fund value as maturity benefit.
- Enjoy income tax benefit under section 80C and 10(10D) like other insurance plans.
HDFC Click 2 Invest Premium & Maturity Calculation
Now one good thing about HDFC Life is that in their online portal they provide a calculator to calculate the premium and other financial data. I am going to use the same and explain how the return will be.
Don’t Miss HDFC Life Health Insurance Plan Review
Age = 30 years
Policy Term: 20 years (max)
Investment Term = 20 years
Premium: Rs 1000 (monthly) = 12,000 / year
Life Cover = 10 times yearly premium = 1,20,000
So till maturity I have to invest 12,000 X 20 = 2,40,000. And as per the calculator the maturity benefit will be as below
Return with 4% = 3,07,422
Return with 8% = 4,73,421
You can verify this data using the same calculator. Visit hdfc click 2 invest brochure for complete details.
Should I buy HDFC Life Click 2 Invest online ULIP plan?
To answer this questions one should know about how ULIP plans works and there are many disadvantages of ulip plans if you look for a short term return. HDFC Life Click 2 Invest is also not at all different from that list.
If you have noticed, one can surrender Click 2 Invest only after 5 years period. If you try before that, you have to pay 4% of annual return toward discontinuation fund charges. Now, if you are ready to bear a 5 year lock-in period, then why not try ELSS mutual fund or tax exempted FD schemes? I am sure they will give better return on investment.
Although HDFC is promising many charges are waived off, but still the fund management charges(1.35%) are higher than mutual fund charges(1.00%). If you don’t have enough knowledge on mutual fund, then spend some time and start investing in any popular or recommended ELSS fund on SIP basis.
Again, if you are looking for a life cover then do you think the life cover you will get with this plan is enough for your family? There is no alternative of a term insurance plan and one shouldn’t buy an insurance scheme when he/she is targeting for a return only.
HDFC Life Click 2 Invest : Final verdict
The very basic thing about any ULIP product is, it will take some time to get some gain from a ulip policy. In the initial years every ULIP plan has many charges to settle down and those are handled from the premium amount paid by you and me only.
So, if you are looking for a short term investment, then ulip can’t be an option for you. But in longer term E.g. more than 15 years, one can expect a moderate return of 6-7% from your ulip investment. Look for long term wealth creating by following the simple rule: buy a term plan and invest in mutual fund via SIP way. Hope this HDFC click 2 invest review is useful.