• Webpages
  • Documents
  • HDFC Life ClassicAssure PlusInvestment
  • HDFC Life ClassicAssure PlusInvestment
  • HDFC Life ClassicAssure PlusInvestment

For Online Policy Purchase

(New and Ongoing Applications)

Branch Locator

For Existing Customers

(Issued Policy)

Fund Performance Check

What are Unit-linked Pension Plans

November 07, 2016 2896
Everyone wants to retire in a position where they are assured of financial security and peace of mind. This is very much possible if they have planned ahead for retirement by 20-30 years in their working life. One of the ways to plan for retirement is with a unit-linked pension plan.

Unit-linked retirement plan or Pension ULIPs are market-linked pension products offered by life insurance companies. They are suitable for individuals looking for a long-term retirement plan that doubles up as an investment.

Pension plans typically did not offer a sum assured in the past. They were investment-oriented as opposed to insurance-oriented and hence did not provide a life cover.

This changed with effect from September 1, 2010 when pension plans were mandated by the IRDA (Insurance Regulatory and Development Authority of India) to provide life / health cover and a minimum guarantee of 4.5%. Unit linked insurance plans have a minimum lock-in of five years and it's no different with unit-linked pension plans.

How unit-linked pension plans work?

Pension ULIPs are different from traditional pension plans in terms of investments. While ULIPs invest in equity markets among other investments, traditional pension plans invest mainly in bond and government securities (gsecs or gilts) markets.

Expectedly returns of traditional pension plans are stable and therefore more suitable for risk adverse investors. Unit-linked pension scheme is ideal for risk-taking investors given the volatility of equities. Having said that, since equities outperform other asset classes like bonds over the long-term, the investor stands a better chance of accumulating a larger corpus over the long-term by investing in a pension ULIP.

In terms of tax benefits however, there is no difference between the two plans. Premiums paid towards the plans are eligible for tax exemption under the broader Section 80C upto a maximum of Rs 1,50,000 annually.

Calculate Premium >>

Similar Articles

Popular Insurance Definitions:


Show Full Article
Hide Full Article

HDFC Life Insurance Company Limited. CIN: L65110MH2000PLC128245, IRDAI Reg. No. 101.

Registered Office: Lodha Excelus, 13th Floor, Apollo Mills Compound, N.M. Joshi Marg, Mahalaxmi, Mumbai 400 011. Email: [email protected], Tel No: 1800-266-9777 (10 am to 7 pm). The name/letters “HDFC” in the name/logo of the company belongs to Housing Development Finance Corporation Limited (“HDFC Limited”) and is used by HDFC Life under an agreement entered into with HDFC Limited.

For more details on risk factors, associated terms and conditions and exclusions please read sales brochure carefully before concluding a sale.

  • IRDAI is not involved in activities like selling insurance policies, announcing bonus or investment of premiums. Public receiving such phone calls are requested to lodge a police complaint.