HDFC Standard to adopt unit-linked model

HDFC Standard Life Insurance Company will gradually offer all its existing insurance schemes on a unit-linked platform in addition to the traditional means of sales.

The life insurer today launched its first two individual unit-linked plans: endownment and pension.

The company is maintaining a floor premium of Rs 10,000 per annum for investment made to unit-linked plans.

"Unit-linked products are for the sophisticated and financially savvy individual," said HDFC Standard Life managing director & CEO Deepak Satwalekar.

This will ensure that the individuals buying the product are not just trying to cash in the stock market boom without understanding the possibility of the bubble bursting.

"Going forward all our products will also be available on the unit-linked platform," said Satwalekar.

While HDFC Standard Life is a late entrant in launching unit-linked plans, the company boasts of having the lowest annual charges of 0.8 per cent in the industry. "Over a long time horizon, this will make a difference to the returns," Satwalekar said.

The endownment product offers five different investment options varying between 100 per cent investment in debt to 100 per cent investment in equities.

Under the pension unit-linked plan, there are four options as the Irda has restricted insurers from pension options with 100 per cent investment in equities. The maximum investment in equities for HDFC Standard Life unit-linked pension plan is at 60 per cent.

HDFC Standard Life allows for free switches from one fund option to the next. Said Satwalekar: "As few policyholders are likely to exercise their option to switch funds, it is not fair to penalise all the policy holders."

Meanwhile, the company has seen more than 100 per cent growth in premium income this fiscal as it consolidates its position.