HDFC Life Sanchay Par Advantage - PowerPoint Presentation

1. HDFC Life Sanchay Par AdvantageNovember 2019This presentation is strictly for internal use. This should not be used for solicitation

2. We hungrily await the delivery of foodWe cringe when a webpage takes time to loadThe need for speed...We’re always on the move and don’t like to waitWe restlessly await the arrival of a cab

3. When it comes to Life Insurance...A customer usually waits for a few years for Liquidity1234567891011121314151617181920PayReceiveEven if he were to withdraw...2 year wait in case of a Traditional policy5 year wait in case of a ULIP

4. What if... There’s a plan which offers payouts from 1st month itself123456789101112131415161718…..70PayReceiveAnd offers superior returnsUpto 7%*!*illustrated at 8%

5. Don’t you wish you could get more?With part of it being a guaranteed income* for a fixed period!12345678910111213…343536….6970PayReceive*under the deferred income option

6. Developing a plan which satisfies such needsCash Bonus for monthly payoutsPARBuilt on a PAR platform to offer superior returns through increased equity exposure* (compared to Non-Par)NewA whole life proposition* ~15-25%

7. Introducing, HDFC Life Sanchay Par Advantage7

8. Product OfferingsWhole Life Cover 01Whole Life Income 04Tax Benefits06Limited PPT03Accrue Bonuses02Payouts from 1st month05Sanchay Par Advantage

9. Key Features9Regular PayoutsCash Bonus payouts from 1st month under the Immediate Income OptionPolicy Term Whole of life (100 years)Premium Payment Term 6 | 8 | 10 | 12 yearsGuaranteed Income for 25 years (under Deferred Income)Flexibility to accrue Cash Bonus basisReverse Repo Rate

10. Plan option 1: Immediate Income10

11. Benefits – Immediate Income 11Survival Benefit: Cash Bonus payable at chosen frequency every policy yearMaturity Benefit :Sum Assured on Maturity plus Accrued Cash Bonuses (if not paid earlier) plus Interim Survival Benefit plus Terminal BonusWhere, Sum Assured on Maturity is equal to sum of Annualized premiums payable under the policyDeath Benefit : Sum Assured on Death plus Accrued Cash Bonuses (if not paid earlier) plus Interim Survival Benefit plus Terminal BonusSum Assured on Death is the highest of 10 times the Annualized Premium or Sum Assured on Maturity or Death Multiple (as mentioned in next slide) x Annualized PremiumThe minimum Death Benefit shall be 105% of Total Premiums Paid as on date of death.* Premium excluding UW extra premiums, modal loadings, taxes and rider premiums, if any

12. Death Multiple12Age at EntryDeath MultipleAge at EntryDeath MultipleAge at EntryDeath MultipleAge at EntryDeath Multiple<=5151913.63312.24710.8614.92013.53412.14810.7714.82113.435124910.6814.72213.33611.95010.5914.62313.23711.85110.451014.52413.13811.75210.41114.425133911.65310.351214.32612.94011.55410.31314.22712.84111.45510.251414.12812.74211.35610.215142912.64311.25710.151613.93012.54411.15810.11713.83112.445115910.051813.73212.34610.9>=6010

13. MATURITYPPTCash Bonus shall be payable every month till age 100Sum Assured on Maturity + Accrued Cash Bonus (if not paid earlier) + Interim Cash Bonus (if any) + Terminal Bonus (if declared)02……….61Annual PremiumCash Bonus^^The Cash Bonus payouts shown above are for Monthly payout frequency. If in case Annual payout frequency is chosen, the payouts will start from the end of 1st Year. The policyholder can also opt to avail Quarterly or Semi-Annual payout frequencyPlan Working – Immediate Income 13…………..….

14. You PayINR 8,00,000Working Illustration – Immediate Income14Pays Premiums for 8 yearsINR 1,00,000 annually 3031323334353637979899100Age of the PolicyholderReceives annual Cash BonusINR 30,000* till age 100 Receives Maturity Benefit INR 1,67,64,000 *Maturity Benefit =Return of Premiums^ +Terminal Bonus +Last Cash Bonus PayoutYou GetINR 1,88,34,000*Cash BonusPremiumMaturity Benefit^excluding modal loading, rider premium, taxes*at assumed 8% investment returns

15. Illustrated Non-Guaranteed Cash Bonus* (% Annual Premium)8% Interest Rate scenarioOptionImmediate IncomeAge at Entry / PPT681012Up to 25 years22.529.53539.526 to 35 years2229353936 to 40 years2128343841 to 45 years2027333646 to 50 years1927333651 to 55 years16.52531.53356 to 60 years1321.5282861 years and above817.52423*at assumed 8% investment returnsAdditional Cash BonusPremium BandImmediate Income Option< 1 lacNIL1 lac to < 2 lacs12 lacs to < 3 lacs1.53 lacs to < 5 lacs1.5>= 5 lacs2

16. IRRs – Immediate Income16Immediate Income optionIRRs*PPT = 6 yearsPPT = 8 yearsPPT = 10 yearsPPT = 12 yearsAge \ Premium50,0001,00,0005,00,00050,0001,00,0005,00,00050,0001,00,0005,00,00050,0001,00,0005,00,0000 (30 days)6.70%6.83%6.92%6.74%6.85%6.93%6.78%6.88%6.95%6.82%6.91%6.97%206.48%6.61%6.69%6.54%6.65%6.73%6.59%6.69%6.76%6.63%6.72%6.78%256.41%6.54%6.62%6.48%6.59%6.67%6.54%6.64%6.70%6.58%6.67%6.73%306.38%6.50%6.58%6.46%6.56%6.63%6.47%6.57%6.63%6.54%6.63%6.69%356.25%6.36%6.43%6.35%6.46%6.52%6.38%6.48%6.54%6.46%6.54%6.60%406.20%6.30%6.35%6.32%6.42%6.47%6.35%6.44%6.50%6.40%6.48%6.53%456.08%6.17%6.21%6.24%6.33%6.38%6.27%6.36%6.41%6.35%6.43%6.48%505.85%5.92%5.93%5.96%6.04%6.08%6.05%6.13%6.17%6.07%6.14%6.18%555.72%5.77%5.76%5.81%5.88%5.90%5.84%5.91%5.94%5.92%5.98%6.01%605.61%5.64%5.62%5.75%5.81%5.82%5.75%5.81%5.83%5.81%5.86%5.89%655.31%5.32%5.27%5.41%5.44%5.43%5.43%5.47%5.47%5.41%5.45%5.46%*at assumed 8% investment returns

17. Surrender during the Policy TermWe understand that you may not be able to continue your policy for the entirety of its term due to unforeseen circumstances. The product has been built in a way that the customer gets decent returns even if he opts to surrender his policy anytime during the policy termFor a Male policyholder aged 30 years, opting for Immediate Income option with regular cash payouts, paying a premium of INR 1,00,000 annually for 8 years – Policy InceptionYear 20Year 30Year 40Year 50Policy MaturitySurrender Value* (INR)IRR*14,44,00020,25,00029,99,00050,39,000Maturity Value1,67,64,0005.19%5.43%5.71%6.05%6.56%Surrender in the year*at assumed 8% investment returnsSurvival benefits (Cash Bonus) paid till the date of surrender would be deduced from the surrender value

18. Plan option 2: Deferred Income18

19. Benefits – Deferred Income 19Survival Benefit: Guaranteed Income payable for 25 years as Guaranteed Income = Guaranteed Income Rate x Annualized Premium Cash Bonus payable at chosen frequency every policy yearMaturity Benefit :Sum Assured on Maturity plus Accrued Survival Benefit (if not paid earlier) plus Interim Survival Benefit plus Terminal BonusWhere, Sum Assured on Maturity is equal to sum of Annualized premiums payable under the policyDeath Benefit : Sum Assured on Death plus Accrued Survival Benefit (if not paid earlier) plus Interim Survival Benefit plus Terminal BonusSum Assured on Death is the highest of 10 times the Annualized Premium or Sum Assured on Maturity or Death Multiple (as mentioned earlier) x Annualized PremiumThe minimum Death Benefit shall be 105% of Total Premiums Paid as on date of death.* Premium excluding UW extra premiums, modal loadings, taxes and rider premiums, if any

20. MATURITYPPTGuaranteed Income payable for Guarantee Period + Cash Bonus Payable every year till age 100Plan Working – Deferred Income200134562Annual PremiumCash Bonus*Guaranteed Income*Sum Assured on Maturity + Accrued Guaranteed Income and Cash Bonuses (if not paid earlier) + Interim Survival Benefit (if any) + Terminal Bonus (if declared)*The Survival Benefit payouts shown above are for Monthly payout frequency. If in case Annual payout frequency is chosen, the payouts will start from the end of 2nd Year after the end of Premium Payment Term. The policyholder can also opt to avail Quarterly or Semi-Annual payout frequency78……….……….

21. Working Illustration – Deferred Income21Pays Premiums for 8 yearsINR 1,00,000 annually 3031323334353637979899100Age of the PolicyholderReceives annual Cash BonusINR 42,600* for 25 yearsReceives Maturity Benefit INR 62,31,000* Maturity Benefit =Return of Premiums^ +Terminal Bonus +Last Cash Bonus Payout You PayINR 8,00,000You GetINR 1,04,91,000*3839404142636465Receives Guaranteed Income of INR 28,400 annually for 25 yearsReceives annual Cash BonusINR 71,000* till age 100Cash BonusPremiumMaturity BenefitGuaranteed Income^excluding modal loading, rider premium, taxes*at assumed 8% investment returns

22. Guaranteed Income Rate (% of Annual Premium) 22Guaranteed Income Rate (as a % of Annualized Premium)Age at entryPremium Payment Term (PPT)81012Up to 25 years28%40%50.8%26 to 35 years28%40%50%36 to 40 years28%40%50%41 to 45 years28%40%50%46 to 50 years28%40%50%51 to 55 years27.6%40%50%56 years and aboveNot Available 40%50%Annualized PremiumAdditional Guaranteed Income(% of Annualized Premium)< 1 lacNIL1 lac to < 3 lacs0.4%3 lacs to < 5 lacs1.0%>= 5 lacs1.2%Guaranteed Income (for Deferred Benefit option only)

23. Illustrated Non-Guaranteed Cash Bonus* (% Annual Premium)8% Interest Rate scenarioOptionDeferred IncomeDuring Guarantee Period (25 years after the end of PPT)After Guarantee PeriodAge at Entry / PPT8101281012Up to 25 years426076.27010012726 to 35 years4260757010012536 to 40 years4260757010012541 to 45 years4260757010012546 to 50 years4260757010012551 to 55 years41.460756910012556 to 60 yearsNot Available6075Not Available100125*at assumed 8% investment returnsAdditional Cash BonusPremium BandDeferred Income OptionDuring Guarantee PeriodAfter Guarantee Period< 1 lacNIL1 lac to < 3 lacs0.613 lacs to < 5 lacs1.52.5>= 5 lacs1.83

24. IRRs – Deferred Income24Deferred Income optionIRRs*PPT = 8 yearsPPT = 10 yearsPPT = 12 yearsAge \ Premium50,0001,00,0005,00,00050,0001,00,0005,00,00050,0001,00,0005,00,0000 (30 days)6.56%6.80%6.92%6.54%6.79%6.91%6.82%6.98%7.07%206.53%6.73%6.83%6.57%6.76%6.86%6.79%6.92%7.01%256.53%6.72%6.82%6.58%6.76%6.86%6.78%6.91%6.99%306.53%6.71%6.80%6.59%6.75%6.84%6.80%6.92%7.00%356.51%6.68%6.78%6.58%6.73%6.83%6.79%6.90%6.97%406.49%6.65%6.74%6.57%6.71%6.80%6.76%6.86%6.94%456.44%6.59%6.68%6.53%6.66%6.75%6.70%6.81%6.88%506.35%6.50%6.58%6.46%6.59%6.67%6.61%6.71%6.78%556.23%6.37%6.46%6.35%6.48%6.56%6.47%6.57%6.64%60Not Available6.22%6.34%6.42%6.29%6.39%6.46%*at assumed 8% investment returns

25. Surrender during the Policy TermWe understand that you may not be able to continue your policy for the entirety of its term due to unforeseen circumstances. The product has been built in a way that the customer gets decent returns even if he opts to surrender his policy anytime during the policy termFor a Male policyholder aged 30 years, opting for Deferred Income option with regular payouts, paying a premium of INR 1,00,000 annually for 8 years – Policy InceptionYear 20Year 30Year 40Year 50Policy MaturitySurrender Value* (INR)IRR*18,19,00019,98,00023,42,00030,12,000Maturity Value62,31,0005.96%5.23%5.45%5.86%6.71%Surrender in the year*at assumed 8% investment returns. Survival benefits (Cash Bonus + Guaranteed Income) paid till the date of surrender would be deduced from the surrender value

26. Eligibility 26

27. Plan Eligibility27CriteriaMinimumMaximum Entry Age 30 daysImmediate Income – 65 years (PPT: 6/ 8/ 10/ 12)Deferred Income – 55 years (PPT: 8) 60 years (PPT: 10/ 12)Maturity Age100 yearsPremium Payment Term (PPT)Immediate Income – 6, 8, 10, 12 yearsDeferred Income – 8, 10, 12 yearsPolicy Term (PT)100 years – Entry AgeSum Assured on MaturityINR 3,00,000No LimitPremiumINR 25,000No Limit

28. Understanding Cash Bonus28

29. Cash Bonus29 Participating policies take part in the investment profits of the par fund which is shared with the policyholders in the form of bonus payments. Bonuses declared at the end of every financial year are accrued to the policy and are payable at the time of a claim (death/ surrender/ maturity) Cash bonus is different from other bonuses as this bonus is payable on a yearly basis rather than at the time of a claim and hence acts as a source of regular income Sanchay Par Advantage allows cash bonus payouts at chosen frequency Cash Bonus can be calculated as follows: Cash Bonus = Cash Bonus Rate x Annualized Premium Instead of cashing out, the policyholder can choose to accrue the cash bonus payouts with us and earn additional interest on them

30. Flexibilities offered under the plan30

31. Accrual of Survival Benefit payouts31The policyholder shall have an option to defer the Survival Benefit(s), arising out of declared Cash Bonuses and/ or Guaranteed Income and accrue them insteadThis can be opted for anytime during the policy term and for any number of timesThe accrued Cash Bonuses and/ or Guaranteed Income payouts will be accumulated monthly at Reverse Repo Rate The policyholder can withdraw the accrued Cash Bonuses/ Guaranteed Income partly/ fully at any point during the policy termIf the unpaid Survival Benefits are not taken by the policyholder during the policy tenure, the same shall be payable along with benefits payable at the time of termination of the policy in the form of death, maturity or surrender

32. Working – Accrual of Survival Benefit Payouts32MATURITYPPTCash Bonus shall be payable every year till age 100Sum Assured on Maturity + Accrued Cash Bonus + Interim Cash Bonus (if any) + Terminal Bonus (if any)0134562Annual PremiumCash Bonus^Cash Bonus, supposed to be paid out every policy year, is instead accrued at Reverse Repo Rate# and paid out at Maturity. The policyholder can opt to withdraw this partially/ fully anytime during the policy term. #based on the prevailing rates

33. Non Deferred:INR 1,88,34,000*You PayINR 8,00,000Working Illustration – Deferral of Survival Benefit Payouts33Pays Premiums for 8 yearsINR 1,00,000 annually 3031323334353637979899100Age of the PolicyholderAccrues the annual Cash Bonus payouts of INR 30,000* till age 100 Accrual done at Reverse Repo Rate (5%)#Receives Maturity Benefit INR 3,54,24,976*Maturity Benefit =Return of Premiums^ + Accrued Cash Bonus +Terminal Bonus +Last Cash Bonus PayoutYou GetINR 3,54,24,976*Deferred Cash BonusPremiumMaturity Benefit^excluding modal loading, rider premium, taxes*at assumed 8% investment returns#based on the prevailing rates

34. Choose Survival Benefit Payout Date34Survival Benefits will be paid on policy anniversaries by default. Alternatively, the policyholder can choose to receive the survival benefits on any one date as per their choice – birthdays, anniversaries, loan instalment payment dates, etc.

35. Why should someone buy Sanchay Par Advantage?35

36. Why should you buy Sanchay Par Advantage?36Benefits of HDFC Life Sanchay Par Advantage:Survival Benefit payouts help create an alternate source of incomeFlexibility to defer benefit payouts can be used with future financial needs in perspectiveThe plan can be used as a tool to create a legacy for the next generationThe plan can be used to avail regular income for whole of life (till age 100 years)Protect the family against financial distress in case of unfortunate death Provides Tax Free income!

37. Suitable for all Life StagesRegular Income can be used to pay for educationRegular Income to support college expenses and early careerBuild a corpus for your dream vacation (Accrual of payouts) Income to reduce the burden of EMIsProtection against unexpected rise in expenditure – family expenses, medical exigenciesRegular Income to maintain post retirement lifestyle

38. Other Information38

39. Other Information (1/3)39Grace Period30 days for yearly, half-yearly and quarterly frequencies15 days for monthly frequencyLapsationIn the event of non payment of premium due under the policy within the grace period, the policy will lapse if the policy has not acquired a surrender value Paid UpIf you stop paying premiums after the policy has acquired a guaranteed surrender value (GSV), your policy will be made reduced paid-up at end of the grace period.  Once a policy becomes paid-up:the guaranteed benefits, including guaranteed income under Deferred Income option, shall be computed by multiplying the guaranteed benefits as specified to the ratio of the number of premiums paid to the number of premiums payable under the policyThe Cash Bonus payouts shall also be scaled down by the ratio of the number of premiums paid to the number of premiums payable under the policyUnder Immediate Income option, once the policy becomes reduced paid-up, the Cash Bonus payouts shall be stopped immediately until the end of the premium payment term and will start again after the end of premium payment term only

40. Other Information (2/3)40RevivalThe revival period shall be of five yearsFor revival, you will need to pay all the outstanding premiums and interest on the outstanding premiums and applicable taxesSurrenderThe policy will acquire a Guaranteed Surrender Value (GSV) upon the payment of first two years’ premium, irrespective of the premium payment termExclusionIn case of death due to suicide within 12 months from the date of commencement of risk under the policy or from the date of revival of the policy, as applicable, the nominee or beneficiary of the policyholder shall be entitled to at least 80% of the total premiums paid till the date of death or the surrender value available as on the date of death whichever is higher, provided the policy is in forcePolicy LoanYou can avail Loan under the policy provided the policy has acquired a surrender value subject to the specified terms and conditions

41. Other Information (3/3)Premium/ Payout Frequency The instalment premium for the premium payment frequencies other than annual mode is arrived at by multiplying the annual premium by the conversion factors, given below: Instalments for Survival benefit for frequencies other than annual mode is arrived at by multiplying the annual Survival benefit by the conversion factor given below:FrequencyConversionSemi-annual 98% of Annual Survival Benefit x 1/2Quarterly97% of Annual Survival Benefit x 1/4Monthly96% of Annual Survival Benefit x 1/12 FrequencyConversion FactorSemi-annual 0.5100Quarterly0.2600Monthly0.0875

42. Competition Benchmarking42

43. Competition Benchmarking43FeatureHDFC Life Sanchay Par AdvantageAditya Birla Vision Life IncomePNB Metlife Super SaverPolicy TermWhole of LifeWhole of LifeMin Policy Term: 10y for PPT 5 & 7 | 11y for PPT 10 | 13y for PPT 12 | 16y for PPT 15 | 10,12,15 for Regular PayMax Policy Term: 20yPPT6 | 8 | 10 | 12 years8 | 10 | 12 | 15 to 40 years5, 7, 10, 12, 15 and Regular paySurvival Benefit PayoutsCash Bonus – payable from end of 1st Policy Year (from PPT+1 years in Deferred Income)Guaranteed Income for 25 years (Deferred Income option)Guaranteed Income payout as 5% of SA after end of PPLump sum Payout of accrued Bonuses after PPTBonus payouts after end of PPTUnder Liquidity option, Cash Bonus – payable after the end of PPT For Savings + Family Care option, after death of the Life Assured Cash bonus, if any, shall continue to be paid till MaturityAccrual of Cash Bonus/ Payout FrequencyOption to accrue Survival Benefit payoutsCan choose to accrue bonuses as Reversionary Bonus or choose for liquidity through cash bonus payoutsSurvival Benefit payouts on Monthly basis allowedFlexibilitiesWithdrawal of accrued Survival benefit as desired Can choose to change from immediate payouts to accrual and vice versa any number of timesOther BenefitsEnhanced benefits for high premiumPremium Discount for High SAEnhanced benefits for high premiumIRRs (Deferred Income)AP 1 lac, 30y old, 8 PPT6.71%6.57%5.5 % (A: 40y | PPT/PT 10/20y | AP = INR 50,000) Please refrain from using this slide for sales solicitation

44. Competition Benchmarking44FeatureHDFC Life Sanchay Par AdvantageMax Life Gain PremiereKotak Smart Life PlanPolicy TermWhole of Life15 | 20 | 25 yearsTill age 75 yearsPPT6 | 8 | 10 | 12 years6 | 8 (PT 15 years)6 | 8 | 10 (PT 20 years)12 (PT 25 years)6 | 8 | 10 | 12 | 15 yearsSurvival Benefit PayoutsCash Bonus – payable from end of 1st Policy Year (from PPT+1 years in Deferred Income)Guaranteed Income for 25 years (Deferred Income option)Cash Bonus – payable from end of 2nd Policy YearCash Bonus – payable from end of 1st Policy YearAccrual of Cash Bonus/ Payout FrequencyOption to accrue Survival Benefit payoutsOption to accrue Cash Bonus as PUAOption to accrue Cash Bonus as PUACan utilize the Cash Bonus to reduce payable premium amountSurvival Benefit payouts on Monthly basis allowedFlexibilitiesWithdrawal of accrued Survival benefit as desired Withdrawal of accrued PUAs as desiredCan choose to change from immediate payouts to accrual and vice versa any number of timesCan choose to change from Cash Payouts to PUAs once during PTOther BenefitsEnhanced benefits for high premiumPremium Discount for High SAPremium Discount for High SAIRRs (Immediate Income) AP 1 lac, 30y old, 8 PPT6.56%4.2%~ (PT: 25 years)4.88%Please refrain from using this slide for sales solicitation

45. Annexures45

46. GSV factors46Policy YearPremium Paying Term6 years8 years10 years12 years00%0%0%0%10%0%0%0%230%30%30%30%335%35%35%35%450%50%50%50%550%50%50%50%660%50%50%50%765%50%50%50%875%60%65%58%980%65%70%65%1080%75%75%73%1180%80%80%80%12+90%90%90%90%

47. Thank you47