HDFC Standard Life offers loan protection plan called HDFC Loan Cover Term Assurance Plan. It provides a lump sum on death of the life assured during the term of the plan. Under this plan, the lump sum will be a decreasing percentage of the initial sum assured. As the outstanding loan decreases as per the loan schedule, the cover under the plan also decreases as per the plan schedule. Since this is non-participating pure risk cover plan, no survival benefit is payable at the end of the policy term.
This plan is specially designed to provide cover on home loan. In case of unfortunate death of the life assured, this plan covers the entire home loan amount. This means no more financial burden to insured's family to repay the outstanding loan amount.
The plan can be taken on single life basis or joint life basis (first claim basis). If the policy is taken on joint life basis, the benefit will be paid out on the death of any one of the lives assured under the plan. There is a option of paying single premium and regular premium. The minimum entry age is 18 years and maximum age is 55 years for regular premium and in case of single premium maximum age is 60 years. The policy term ranges from 10 years to 30 years for regular premium payment and for single premium payment is 5 years to 15 years. The premium paying term is 2/3 rd of the policy term.
The plan also offers Accelerated Sum Assured (ASA) Benefit at a nominal extra cost. It pays an amount equal to the sum assured selected under this benefit, on diagnosis of any one of the specified critical illnesses.
Tax benefit-
Premium paid is eligible for tax benefit under section 80C and benefit received under this plan is exempt from tax under section 10(10D) of the Income Tax Act, 1961. Premium paid for the Accelerated Sum Assured (ASA) Benefit is eligible for tax benefit under section 80D.