HDFC SINGLE PREMIUM UNIT LINKED PENSION PLAN

Friends,

The above plan of HDFC STANDARD LIFE INSURANCE CO LTD has many features that are unique and very useful and cost saving. Under this plan, the charges are minimal and returns are quite rewarding, please see the charge structure and features as given below:

a) This may be taken with minimum contribution of Rs.25000/- and amounts larger than this, initial charges are 6% of premium and are reduced for premiums over 200000/- and further reduced for premiums over 500000/-.

b)You do not have to commit for paying future premiums,however,you may top up amounts (minimum at one time Rs 5000/-) any number of times at your will and be invested in funds of your choice to the extent of 97.5% in the first two years and later to the extent of 99%.

c) You will have the option to switch between the six funds with varying combination of equity and debt for 24 times in a year without any charges.

d) You will be allowed to surrender the policy after three years and obtain your fund value including returns without any charges or deduction (no TDS deduction either).

e) After the policy has run for the full term , you will be entitled to receive pension depending on the then prevailing rate of interest and if you choose you will be paid one third of the fund value in cash without any charge and without attracting any tax. The mode, period and pension for spouse after demise are all your choices to be made not now but at the time of commencement of pension.

f) Nomination facility is available as in case of any other policy.

g) This can be taken for a minimum term of five years or maximum term of 30 years but the pension receiving age should be 50 years and this factor has to be kept in mind while choosing the policy term.

You are advised to refer to companies brochures too before taking a final decision to go for this policy.

The above may seem to be theoretical discussion. I am giving you the case histories and actual performance of some policies under this plan taken at different times since 2004 by different class of people for better understanding:

1- Policy no 1000xxx3 dated Feb 04 initial payment Rs 25000/- less initial charge Rs.1500/- Net Investment 23500/- , present fund value on 04.05.07 Rs 38 K (units under Equity Managed Fund) yielding flat return of over 19% per annam - policy holder is a middle aged lady without any regular income.

2- Policy no 1000xxx1 dated Feb .04 initial payment Rs 25000/- less initial charge 1500/- , net investment 23500/-, present value on 04.05.07 37 K (units held under growth plan) yielding flat return of over 18% per annum - policy holder is a young married women with two children without any regular income.

3- Policy no 1000xxx7 dated Aug.04, initial payment Rs 25000/-, initial deduction 1500/-, net invested Rs23500/- in Balanced Fund, present value as on 04.05.07 Rs 42 K yielding flat return of above 28% per annum - policy holder is a young executive with a investment/broking firm in Lucknow, he preferred it for the simplicity and growth prospects.

4- Policy no 102xxx01 dated May 05 , initial payment Rs 25000/- , initial deduction 1500/-, net invested in Growth Plan , present value as on 04.05.07 Rs48 K yielding flat return of over 52% per annum - the policy holder is near his retirement and works with a Govt. corporation wanted parking place for funds and some pension inflow after about five years of growth taking advantage of booming markets, needless to say his strategy paid off and expertise of HDFC SLIC fund management team delivered very well.

5 - Policy no 103xxx70 dated Aug 05 , initial payment Rs25000/ , initial deduction 1500/-, net invested in Balanced Fund, present value as on 04.05.07 Rs 32 K yielding flat return of over 20% per annum - policy holder is retired Doctor and had some free funds to invest. He would not be waiting until the policy matures and would surrender and withdraw his fund value any time when needed as the lock in period of six months has passed, no deductions would be made and no TDS will be attracted.

6 - Policy no 10370xxx dated 09.09.07 , initial payment Rs25000/- and top up of Rs 25000/- within a few weeks, initial deduction 1500/- and deduction on top up amount 250/-, net invested 48250/- in Balanced fund and switched to Defensive Fund later on, the present value as on 04.05.07 stands at Rs 56 K yielding flat return of roughly 10% per annum - policyholder a middle aged housewife without regular income, but has conservative out look about money management, she would want the commencement of pension after ten years.

7 - Policy no 103xxx76 dated Aug 06 , initial investment Rs25000/- , initial deduction 1500/- , net invested 23500/- in defensive fund, present value as on 04.05.07 Rs26 K yielding a flat return of about 14% per annum - policy holder is of ripe age now and wanted some place for safe keeping of funds with moderate growth prospects and safety and the goal is fulfilled, he has option to withdraw funds by surrender of policy after lock in period of three years or go for pension on expiry of five years.

8 - Policy no 1079xxx5 dated Dec 06 , initial payment Rs 25000/- , initial deduction 1500/-, net investment 23500/- in Balanced Fund, present value as on 04.05.07 Rs 23 K and the yield has so far been negative return of about two per cent - policy holder is a house wife without regular income and the purpose of purchasing the policy is to top up monies that will be received from husband from time to time, her choice is Balanced Fund as she was explained that over long period of time and with investment from time to time the Balanced Fund would be giving better returns along with needed safety.

9 - Policy no 109xxxxx dated Mar 07 , initial payment Rs 25000/- , initial deduction 1500/- , net invested 23500/- in Growth Fund, present value as on 04.05.07 stands at 26 K yielding a return of over 60% per annum -policy holder is a Muslim businessmen who wanted the funds to meet the obligations later in life like for children education etc., he wants to top up funds every year of about one lac as and when possible to spare from business, would keep funds only in Growth Fund as the interest earning is not preferred in Islam. he has not opted for risk cover policy also due to such considerations, since policy may be surrendered any time after three years without penalty he sees no problem in meeting his future needs.

There many policies which have been given to people who have topped up large monies and have had satisfying returns but the same have not been mentioned here as the top ups have been many and varied. Since on top up only a nominal deduction of 1% (after policy has matured for two years) is attracted, the Unit Linked Plans of HDFC SLIC have a tremendous edge over the Mutual Funds , along with the free switching for 24 times in a year between six funds the advantage over MFs becomes so pronounced as to make Mutual Fund investment risky and costly. Further the dividend distribution tax is not applicable on Pension Plans and the Endowment Plans of the insurance companies the advantage is even more.

You are welcome to seek clarification regarding any aspect that may crop up in your mind.

Hari Om

Krishna Kumar Khandelwal