HDFC Life Sanchay Plus is a Non-participating traditional life insurance plan. That means the payouts are guaranteed. There is no market risk or risk associated with varying annual bonuses. You know upfront what you are getting into. Moreover, it is a deferred payout plan i.e. maturity value is paid over a period of time.
Let’s find out more about HDFC Life Sanchay Plus and figure out if this plan should find a place in your insurance and investment portfolio.
HDFC Life Sanchay Plus comes in multiple variants
- Guaranteed Income: Guaranteed income for a few years
- Guaranteed Maturity: Lumpsum at maturity
- Life Long Income: Guaranteed income till the age of 99
- Long Term Income: Guaranteed income for 25 or 30 years
Here are a few snapshots from the product brochure about the important features of each variant.
HDFC Life Sanchay Plus: Death Benefit
Death benefit is the same for all the plans and is payable only if the demise happens during the policy term.
It is the highest of the following:
- 105% of the total premiums paid
- 10 times the annualized premium
- Guaranteed Sum Assured on Maturity (total premiums payable under the policy)
- Sum Assured (Death Multiple times Annualized premium). Death multiple depends in your entry age.
For Guaranteed Income, Long Term Income and Life Long Income, there is an additional parameter. Premium paid with 5% interest, compounded annually.
You can see the life cover depends on your age. Instead of varying returns based on your age, they have varied the life cover based on your entry age. Not bad since they are projecting this plan as an investment plan. Therefore, everyone who purchases the plan will get the same return irrespective of entry age (except in guaranteed maturity benefit). The life cover will vary based on the entry age.
By the way, Death benefit of 10 times annual premium ensures that the maturity amount or any amount paid by the insurance company is exempt from tax.
HDFC Life Sanchay Plus: Maturity Benefit
Variant 1: HDFC Life Sanchay Plus: Guaranteed Maturity Benefit
There are three premium payment term (PPT) options. 5 years, 6 years or 10 years.
Policy terms will be 10 years (5 year PPT), 12 years (6 year PPT) and 20 years (10 year PPT).
Maturity amount shall be paid at the end of policy term.
Maturity Benefit = Guaranteed Sum Assured on Maturity + Guaranteed Additions.
Guaranteed Sum on Maturity is nothing but total annualized premiums paid (net of taxes and underwriting premium).
Guaranteed Additions shall be applicable as follows.
Let’s take an example.
You are 30 years old. You purchase a variant with 10-year payment term and 20-year policy term.
You pay an annual premium of Rs 1 lac. Including GST, you will pay Rs 1,04,500 in the first year and Rs 1,02,250 in the subsequent years. You will get the maturity amount on completion of 20 years.
In this case, Guaranteed Sum Assured on Maturity is Rs 10 lacs.
At maturity (completion of 20 years), you will get Rs 10 lacs + Rs 14 lacs = Rs 24 lacs. (this amount is exempt from tax).
IRR comes out to 5.56% p.a.
Additionally, in this variant, the return will depend on your age. If you are 57 at the time of purchase, your return will only be 5.27% p.a.
Not good.
Variant 2: HDFC Life Sanchay Plus: Guaranteed Income
Two premium payment term (PPT) options: 10 years and 12 years
Policy Term: 11 years (10-year PPT) and 13 years (12 year PPT)
Under 10-year PPT variant, payout starts from the end of 12th year until the end of 21st year.
Under 12-year PPT variant, payout starts from the end of 14th year until the end of 25st year.
Let’s consider an example.
You are 30 years old. You purchase a variant with 10-year payment term. You pay an annual premium of Rs 1 lac. Including GST, you will pay Rs 1,04,500 in the first year and Rs 1,02,250 in the subsequent years.
From the end of 12th year till the end of 21st year, you will Rs 2 lacs per annum. That makes it 10 instalments of Rs 2 lac each. All these instalments shall be exempt from tax.
In the event of death of the policyholder, the payments will continue to the nominee.
That is an IRR of 5.73% p.a.
Again, not good enough.
Variant 3: HDFC Life Sanchay Plus: Long Term Income
Premium payment term (PPT) options: 5 years or 10 years
Policy term: 6 years (5 year PPT) or 12 years (10 year PPT)
Under 5-year PPT variant, payout starts from the end of 7th year until the end of 36th year.
Under 10-year PPT variant, payout starts from the end of the 14th year until the end of the 36th year.
Let’s consider an example.
You are 30 years old. You purchase a variant with a 5-year payment term. You pay an annual premium of Rs 1 lac. Including GST, you will pay Rs 1,04,500 in the first year and Rs 1,02,250 in the subsequent years.
From the end of 7th year till the end of the 36th year, you will get Rs 36,000 per annum. That makes it 30 installments of Rs 36,000 each. At the end of the 36th year, you will be returned all the premiums paid too. All these installments shall be exempt from tax.
That is an IRR of 5.53% p.a. Not good enough.
In the event of death of the policyholder during pay-out terms, the payments will continue to the nominee. I am not very clear if the nominee will get the premium payments back or not.
Variant 4: HDFC Life Sanchay Plus: Life Long Income Option
You have an option to pay premium for 5 years or 10 years.
Under the 6-year premium payment option, you get life cover for 6 years. The insurance company pays 35% of the annualized premium from the end of 7th year till such time you turn 99. On completion of 99 years, the insurance company will return all the premiums paid.
Under the 10-year premium payment option, you get life cover for 11 years. The insurance company pays 100% of the annualized premium from the end of 12th year till such time you turn 99. On completion of 99 years, the insurance company will return all the premiums paid.
What are the returns like?
Example 1
You are 50 years old.
You will pay Rs 1.045 lacs as the first-year premium. This includes 4.5% GST. From the second until the 10th year, you will pay Rs 1.0225 lacs every year (includes GST of 2.25%).
You will get Rs 1 lac each from the end of 12th year till the end of the 49th year (you turn 99). That is 38 installments of Rs 1 lac each. Additionally, when you complete 99 years, you will get an additional Rs 10 lacs back.
If you work out the IRR using excel, the return is 6.92% p.a.
Example 2
You are 60 years old.
10-year policy term. First-year premium: Rs 1.045 lacs, Subsequent premiums: Rs 1.0225 Lacs
You will get Rs 1 lac each from the end of 72nd year till the end of the 99th year. That is 28 installments of Rs 1 lac each. Additionally, when you complete 99 years, you will get an additional Rs 10 lacs back.
IRR will be 6.72% p.a.
There is a caveat though
If the demise happens during the payout term (after policy term), the payouts will continue to the nominee till the end of the payout period (till such time the policyholder would have turned 99). However, as I understand, the nominee will not be returned the premiums paid. I could not find anything in the policy wordings that ensured that premiums will be returned to the nominee too. Had the policyholder survived till the age of 99, he would have got the premiums back.
Now, 99 is a fairly high age. Unless there are some major advances in medical science, not many policyholders will survive till the age of 99. If the policyholder were to pass away before the age of 99, there won’t be any return of premium.
What will be the net return to the family in that case?
6.6% if you bought as a 50-year-old.
6.04% if you bought as a 60-year-old
Again, these are post-tax returns. But clearly less attractive than before.
Where HDFC Life Sanchay Plus scores well?
This plan is easy to understand. You know what you are getting into. I am sure many investors will appreciate that. Whether the returns are good or bad is a different matter altogether.
The USP of these plans is that the payout from these plans will be exempt from tax. All the pay-outs from the insurance company will be exempt from tax. Remember these pay-outs are guaranteed. Contrast this with an annuity plan such as LIC Jeevan Shanti. Annuities also provide guaranteed pay-outs. However, the payment from an annuity plan is taxable at your marginal tax rate. Now, this may make HDFC Sanchay Plus (or any similar life insurance product) very attractive to retirees.
You may be able to lock-in the rate of interest for a very long-term using Government bonds. However, with Government bonds too, interest is taxed at your marginal rate. No other income strategy can lock-in the interest income for such long tenure.
These plans also provide insurance during the policy term. Annuity plans don’t provide any insurance.
Your annual premium may be hiked if your health condition is not good at the time of purchasing the plan for the first time. Remember, if your premium is hiked due to an illness, it does not add to your pay-outs from HDFC Life Sanchay Plus. This is a problem with any investment and insurance combo product.
Should you invest in HDFC Life Sanchay Plus?
Firstly, you need to see why you are even contemplating investing in this plan.
If you are looking at wealth creation, this is clearly not the right product. For a long term investment, 5-7% p.a. is clearly not something you must settle for. PPF or EPF will give you much higher returns. You may argue that the PPF interest rate keeps changing. However, 5.56% p.a. is still very low. You can expect much higher returns in equity funds too.
If you are looking to add to your life cover, HDFC Life Sanchay Plus is again not a good choice. A life cover of 10 to 15 times annual cover will not do much for your insurance portfolio.
If you are looking for income during retirement, Life long income can be an interesting choice for those investors who are looking for guaranteed returns and are also expected to fall in the higher tax bracket. The insurance component, though unnecessary for such investors, is required to make the proceeds tax-free under the extant tax laws. At the same time, you also need to contrast against other retirement income options such as PPF, SCSS, Fixed deposits, PMVVY, Government Bonds, annuities and even Systematic withdrawals from mutual funds.
Apart from Government Bonds and annuities, you cannot lock-in the rate of interest for the long term. HDFC Life Sanchay Plus lets you do that. However, you also need to see if the guaranteed rate is high enough. Between 6% and 7% p.a., it is clearly not shooting through the roof (at least for now).
With SCSS and PMVVY, you will get a higher rate but you bear reinvestment risk since the interest rate is locked in for only 5 and 10 years respectively. Moreover, interest from SCSS and PMVVY is taxable too.
With PPF too, there is some interest rate risk involved. However, for the moment, PPF offers a much higher return than what HDFC Life Sanchay has to offer. Therefore, there is a clear margin that you have. PPF interest is exempt from tax. And PPF is way more flexible than this HDFC life product.
There is no one-size-fits-all solution when it comes to a retirement income strategy. So, you need to look at your requirements and your portfolio to make a choice. If you still can’t make up your mind, seek professional assistance from your financial planner or SEBI registered investment adviser (SEBI RIA).
For my portfolio or the portfolio of my clients, I would stay away from such products. I would rather invest in a diversified portfolio depending upon the clients’ risk profile. Systematic withdrawal from an MF portfolio is a good option. For somebody who wants guaranteed income during retirement, I would prefer to stagger annuity purchases during the course of retirement. With this, you retain greater flexibility with your retirement corpus and potentially higher income by purchasing annuities without return of purchase price.
Additional Read
HDFC Life Sanchay Plus page on HDFC Life website
All the images have been taken from HDFC Life Sanchay Plus brochure.
56 thoughts on “Review: HDFC Life Sanchay Plus: The good and the bad”
Thank you for the vast analysis on this product!!! My views on this plan are now clear. Not buying it.
Thanks Jaipal!!!
Excellent Analysis, although it looks attractive from guaranteed returns perspective but offered IRR is not exciting. Moreover money will be blocked for 20 years.
Better to invest in MF/FD/SIP for more flexibility.
Thanks Prashant!!!
Quite a thorough anaysis Deepesh. I was in dilemma to buy this product but IRR is clealy very low. Sanchay Plus is certainly not suitable for long term income generation.
Diversified MF portfolio is a better option.
Thanks again.
Thanks Anshuman!!!
Please suggest me where to invest for 10 years where I get a better return..?
This is one of the best commentary I have read on a HDFC product. Very well return and also for free :-). Thanks a lot for your service.
Kartik
Thanks for the kind words, Kartik.
Please share with your friends and family too.
I have taken policy of 10 years…1 lacs to be paid per year for 10 years plesse help me with benefits taken this policy on march 2019 my age was 23…. What if I wanna discontinue
Thank you for writing this article. I am 38yrs old and if I take 10yrs x 5LPA policy with payout till 99 years age, how much will be the rate of return (for an abc 70-75yrs life span)?
I see you gave an example of 60yr old but would it return better for someone investing when nearing 40?
Also what are better alternatives to this ?
Thank you
Thanks Saj.
The rate of return does not change in event of the demise of policyholder at the age of 75 because the policy term would have ended by then. The nominee will keep getting the payouts. Btw, I am not very sure if the nominee will be returned the premiums.
There are many alternatives. The choice will depend on your risk appetite and requirements.
Suggest you talk to an investment adviser.
This is the one of best article written with genuine advise. The society needs you Deepesh kind of Advisers.
Thank you once again.
Tarakesh
Thanks Tarakesh!!!
Do share with your friends and family too.
It really elaboration n transparent analysis Deepesh. In fact the HDFC guyz are chasing us to invest in this plan. Thx for the insides, helps to take a decision going forward.
R,
Mangesh
Thanks!!!
Please share with your friends and family too.
Deepesh,
Thanks for your details analysis.
Can you suggest which can be alternate and better plan to invest?
Hi Sankar,
Would suggest that you segregate the accumulation and withdrawal phase.
Accumulation: You can pick up mutual funds, EPF, PPF, fixed deposits etc.
Withdrawal strategies can be decided based on your needs and income requirement.
Thank you Deepesh. This is really helpful. Hope to read your other articles as well.
Deepesh , thanks for your insight, needed advise on investment , have 5 lakhs to invest, my age is 47 , no previous investments in anything. Father to 3 kids , 15 yrs , 12 yrs , 10 yrs . What would you advise as far as investment plan for me. Thanks in advance.
Hi Deepesh,
It’s a good analysis but still i am not in a position to decide. my age is 32 now and please suggest me is it good to invest in snachay long term income gauranteed 25 years plan or not. if not please suggest other options.
Thank you.
Harsha
Hi Harsha,
In my opinion, don’t invest.
Hi Mr Deepesh,
Thanks for a detailed analysis. I think tax free income can be game changer in case of life long option
I think “reliance nivesh lakshya” can be alternative to lock-in the current yield on govt bonds for long term.
Hi Mr. Gopinath,
I agree that tax-free income is one of the best selling points of HDFC Life Sanchay. The only issue is that the returns are sub-optimal.
Have not checked Reliance Nivesh Lakshya.
Thanks a lot Deepesh. I am quiet clear now.
Hey Deepesh,
Thank you for a detailed analysis of this plan.
Was thinking of going for it.
My question is instead of investing and blocking the money in a fixed deposit, isn’t it better to invest here
Hi Dr. Dipti,
Interesting point.
If the choice is strictly between FDs and HDFC Life Sanchay plus, the insurance plan may just come out on top.
At the same time, you have a much broader range of choices.
Hope this answers your query.
Hi Dipesh
Would it better to in vest in Sanchay Plus plan with Guaranteed income option? i am thinking to invest 50k PA. i Am 30 Yrs age.
Hi Omkar,
You are 30 years old.
There are many better investments that you can make.
I am 52 years old working in a pvt firm. I want a guaranteed return on monthly basis. I thought sanchay plus was a good plan. Kindly advise
Dear Mr Deepesh,
I am 50 years old, would like to get a pension at age of 60; can invest Rs 2 LPA- 3 LPA, which will be best plan or combination of plans will be better?
Presently committed for Rs 15000/PM on Sanjay Plus for longterm option i.e upto 99 Years as it seems beneficial for more than 50years, but bothering one is 6-7% rate of interest.
Dear Mr. Rangavittal,
There is no fixed answer.
If I were you, there are instruments that I will choose to accumulate funds for my retirement, say mutual funds, PPF, EPF etc.
I will use a different set of instruments for generating income during retirement, say PMVVY, SCSS, Annuities, mutual funds etc.
Dear Sir,
Last year I took HDFC sanchay plan 500000/- and second premium due in coming july.
Please suggest me what can I do ?
Nirav,
You paid Rs 5 lacs as the premium?
I am 44 years old. Does the Critical Illness cover option with Guaranteed Income (13 years) plan help? I do not have any health insurance apart from the Corporate Health Insurance.
Secondly, I am having NPS (Tier II) and some MFs as investments. Is the plan help me for post retirement tenure ? I am more interested to get a fixed income on retirement.
Hi Abhijit,
I am not very fond of this plan.
There are other ways in which you can purchase life cover and plan for your retirement.
Suggest you work with a competent financial advisor.
Hi Dipesh,
Thanks for this analysis post..
I am 49 year old and and I am planning to invest 10 lac every year for next 10 years in this policy… From 12th Year, I am assured of getting Rs. 1075000/- per anum i.e. around 90k per month for next 25 years (tax free) and during final payout, I get 1075000 + 1 cr which is tax free… These are all I am getting without me doing any brain work or getting into any risks of market fluctuation, govt policy change on tax, ever coming down of interest rates etc.
I feel some of the positives of this policy are,
(a) Guaranteed Tax free returns for next 25 years..
(b) Insurance cover of 1 CR during premium paying period.
(c) Guaranteed payout for nominee’s and legal hiers.
Do we have any other alternatives in indian market which can keep above points
Hi Deepesh
The returns have been calculated wrong in the life long income options. It does not come out 6.9%. The returns are only 6.2%. There is a 2 years gap after premium payment term is over.
Thanks Ajay for the feedback.
I had a cursory glance at my calculations. Looked fine to me. In any case, you are saying that I have overestimated the returns.
That does not change the conclusion.:)
We are on the same page.
Hi Deepesh,
My age 57 right now , so sachay plus good for me for cover or please advise me which gives me return as well as cover
Hi Deepesh,
I am 47 now. I have to choose between long term FD and Sanchay plus. Considering 5L premium for 10 yrs. Main objective is tax free guaranteed income. Please advise.
Rgds
Variant 1 of Sanchay Plus which gives lump sum payout is not available in market. Can you suggest some alternatives giving assured lump sum payout
Hi Rakesh,
Another product by HDFC Life, called HDFC Sanchay gives a guaranteed maturity benefit.
HDFC Sanchay Plus and HDFC Sanchay are Non-par traditional plans. Non-par products completely guarantee maturity benefits.
I would like to give a brief explanation of two main types of traditional insurance plans.
1. Participating plans: Here the returns are based on bonuses declared by the company which in turn is linked with investment yield generated by the insurance company. Most traditional plans currently being sold in India belong to this category.
example : HDFC Super Income plan
2. Non-participating: Returns are completely guaranteed at the time of issuance of the policy.
example:HDFC Sanchay and HDFC Sanchay plus.
Hi Deepesh,
I have been contacted with the same plan. I need one clarification. In HDFC Life Sanchay Plus – Life-Long Income Benefit and Returns(variant 3) , suppose I invest 1lakh every year for 10 yrs, the person is saying that if you want to take the maturity amount after the completion of 11 years (10 yrs premium + 1 year cooling period ) you can do so and that will be equal to maturity at the end on 30 yrs minus 9%pa i.e 25 lakh(25 years ~1lakh per year) minus 9%pa i.e nearly equal to 22 lakh by end on 11 th year . Is this correct . They also are showing the proof in the policy by referring to page 7 where its written as following –
“At the end of the Payout Period, the policy terminates by returning Total Premiums paid. On the maturity date, you shall have an option to receive the Guaranteed Sum Assured on Maturity, which under this option, shall be the present value of future payouts, discounted at a rate of 9% p.a. This interest rate is not guaranteed. However, any change in the interest rate will be subject to prior approval of the Authority and will be applicable only to the policies sold after the date of change. At any point of time during the Payout Period, you shall have an option to receive the future income as a lump sum, which shall be the present value of future payouts, discounted at a rate which is computed using the prevailing interest rates”
Can you pl enlighten me on this . Is it again a trap or they are saying correct thing
Hi Vishal,
What is being said is correct. In the future if the interest rates in the economy were to come down ( likely scenario), the discount rate would be lower than 9% and it would be higher if the scenario is opposite.
The insured will be benefited if the rate of interest for discounting is lower. Lower the rate, higher will be the amount you would get and vice-versa.
Hi Hi Deepesh, I am 51 and interested in a safe investment ..Can I invest In HDFC Sanchay Plus
Dear Sir,
I am 48 years old, govt employee in the salary bracket of 10-15 lakh PA. I have a monthly savings of about INR 40,ooo. I have a SBI PPF account which has accumulated of about 1.5 lakh. till date. I have also a LIC policy of Bima gild for 20 years with annual premium of INR 45,000. Since I joined service after 2004, therefore, I am coverd by New pension policy , which has accumulated about 35 Lakhs. Recently, I have been contacted by an HDFC agent for investing in the “HDFC Life Sanchay Plus” for 12 years for an annual premium of INR 2,04, 500, for an assured return of INR 420500 after 14th year till 25 th year. Ir is a good plan for me, given that the rate of interest is arount 6.5-7% compared to PPF (8%). Is is better to invest the amount in PPF account that in the new policy?
Eagerly waiting for your reply
Hi Shekhar,
I prefer PPF.
Now looking forward as rate of interest are decreasing on all fd, saving account, small saving scheme . And in future it will again decrease.. also mutual funds performance showing worst situation… Whether this hdfc life sanchay plan giving 6 % or 6.72 % is better??
Hi Deepesh,
Very good review of the plan and thanks for that. I would like to understand your calculation basis for IRR since my number is 8.87% approx. for IRR. Please see below assumptions and results.
Assumptions:
– 5L + GST premium (i.e. 5.22L for Year 1 and 5.11L for year 2 onwards)
– 12 year PPT / 1 year cooling / 12 year payout at 10L
– Tax bracket 30% (+ cess etc. = 31.2%)
– All proceeds tax free under 10 10 D
My value of investments:
– Non Ins Plan is compounded at 8.87% minus tax on gains @ 31.2% (tax also compounded) = 1,56 Cr
– Ins Plan return, compounded at 7% after Year 13 minus tax on 7% @ 31.2% (tax also compounded) = 1.56 Cr
FURTHER DETAILS:
A. NON INSURANCE PLAN investment – I take the amount every year and compound it by 8.87% * 69% = 6.12% since compounded interest is taxable income and tax rate is 31.2%
Year 1 = 5.22L
Year 2 = 5.11 L + 5.22L * 6.12% = 10.65L
Year 3 = 5.11 L + 10.65L * 6.12% = 16.43L
Year 25 = 1.56 Cr.
B. INSURANCE PLAN investment – Starting in Year 13 I take the amount every year and compound it by 7%*69% = 4.83% since compounded interest is taxable income and tax rate is 31.2%. I only assume that my investment will grow by 7% after Year 13.
Year 14 = 10L
Year 15 = 10L + 10L * 4.83% = 20.48L
Year 16 = 10L + 20.48L * 4.83% = 31.46L
Year 25 = 1.56 Cr.
Finally – since this is an insurance policy the premium can be paid by credit card, which can easily earn around 1% (or more). These rewards are tax free so effective around 1.4%. If you add that to 8.87% it comes to > 10% tax free.
What am I missing?
Thanks for your help – K
Hi Deepesh,
Thanks for the informative post. As per the current benefits on this plan, for long term income for 10 year premium payment term, if you take directly from HDFC life (no agent) then the IRR comes to exact 5.85% and is tax free.
My query is:
1. If one’s goals are all long term and money invested in HDFC sanchay plus is not large portion of overall corpus, does this product not make sense given long term rates are most likely headed in a direction where the IRR can not be more than 5.85% over 35-37 years.
2. Assuming they are investing some amount in equities and make losses in that investment. Now in other products, returns are not guaranteed and they can reduce the returns accordingly. Assuming HDFC is solvent and net net making money on other plans but has lost money on this particular plan, will they default on the guaranteed returns even if they are solvent overall?
3) If I take policy in 2020 and govt announces a new tax law in 2021 that the insurance proceeds are taxable provided the proceeds are received after 2021 even if the policies were issued before this tax law change
4) Is there any other insurance product that you would recommend to have a look at apart from this if the only and only aim is to be able to generate better tax free IRR over long term than Sanchay plus?
5) In one line, would you normally recommend this plan at current IRR of 5.85% in long term income option if the fact that investment is stuck for long term is not that big a pain since the individual has sufficient liquid funds available
Hi Harish,
I trust your calculations. I haven’t checked the latest rates for the Sanchay plus plan.
While interest rate moves in cycles, 5.85% p.a. tax-free over 35-37 years looks a fine yield at present.
With non-participating plans, the insurance company takes the risk. HDFC Life can manage in my opinion.
In your review of HDFC Sanchay Plus, you state: “‘For somebody who wants guaranteed income during retirement, I would prefer to stagger annuity purchases during the course of retirement. With this, you retain greater flexibility with your retirement corpus and potentially higher income by purchasing annuities without return of purchase price..”‘
SBI Life Annuity plus offers annuity without return of purchase price increasing at a simple rate of 3% or 5% of base annuity.. For a 66 year old (my age), the base annuity rate works out to 6.65% (counting GST as part of purchase price) in the monthly payout mode. The annuity increases @ 5% per annum from the second year. Assuming life expectancy of 80 years, this annuity returns 8.81% over the remaining 14 years of annuitant’s life, which is better than fixed annuity without return of purchase price.. Over 7, 8 and 10 years, average returns are 7.64%, 7.81% and 8.14% respectively. This beats RBI floating rate bonds, SCSS and PMVVY over their respective tenures. Should one happen to live longer, the average returns get better. Purchase price if not returned benefits the annuitant more than it would benefit the nominee 14 or more years later by which time it would have lost much of its value due to inflation. This is my take on the above annuity as a layman. In view of your expertise as a financial advisor, I shall be grateful if you could review SBI Life Annuity plus increasing annuity option.
Hi Mahavir,
I have not checked the numbers and calculated IRRs. Hence, Can’t comment.
Btw, the annuity rates keep changing. I doubt they will be offering 6.65% for return of purchase price variant at this point in time.
From the data shared, I think you are talking about return of purchase price variant.
Still, I think PMVVY and SCSS will be better because that will provide much higher flexibility. You can buy annuity after 10 years.
Hello Sir,
I have taken this policy with a premium of 1 lakh per annum for 10 years period. My age is 26 . Is this plan good for long term returns? Please tell me
Can you please advise me whether “HDFC Life C2I -N- Sanchay Fixed Maturity Plan” is a worthwhile investment?
What are the benefits and what are the drawbacks? Does the bank take a huge commission?
The bank representatives obviously paint a rosy picture but I would appreciate a totally objective viewpoint.
Thank you