HDFC Life Click 2 Wealth Review: The Wrapper Costs 1%

Is HDFC Life Click 2 Wealth a good ULIP?

It is meaningfully cheaper than the products that gave ULIPs their reputation. There is no premium allocation charge, the mortality charges are refunded at maturity, and a small special addition is credited for the first five years.

The way to check that claim is not to read the feature list but to run the brochure's own illustration as a rate. Do that and the answer is clean: an assumed 8% gross return becomes 6.99% net. The wrapper costs about one percentage point a year.

What the illustration says, and what it means

From HDFC Life's own sample illustration:

Converted to annual returns on those exact cash flows:

The drag is about one percentage point a year and it is consistent across options and scenarios. That is the number to carry away, because it is the thing a ULIP actually costs you. Premium Waiver costs a little more, which is the extra mortality charge for waiving premiums on the proposer's death.

The 8% and 4% are the IRDAI-prescribed illustration scenarios, not predictions, and the brochure states that plainly. They exist so plans can be compared on identical assumptions. Our guide to reading a benefit illustration covers how those scenarios work.

The illustration uses the cheapest fund in the plan

This is the caveat that changes how you read the table above. The brochure states the illustration assumes 100% of the premium invested in the Liquid Plus fund.

That matters twice over:

• Liquid Plus carries a 0.80% fund management charge. The equity and hybrid funds - Diversified Equity, Blue Chip, Flexi Cap, Midcap Momentum and the rest - carry 1.35%, which is the regulatory cap of 135 basis points. So the one-point drag shown is close to a best case. On an equity fund the charge is 0.55 points higher.
• A liquid fund is a money-market-style fund. Pairing it with an 8% assumed gross return is a mismatch: the 8% is a regulatory scenario applied to whatever fund you choose, and it is not a claim about what a liquid fund does.

None of that is a rule breach; the brochure discloses the fund used. But if you are shown the ₹21,90,010 figure, ask for the illustration on the fund you would actually hold.

Golden Years shows 29.63 times, and returns 6.97%

The Golden Years option displays a maturity value of ₹5,18,47,753 on ₹17,50,000 of premiums at the 8% scenario. That is 29.63 times the money paid in - the largest multiple in any brochure we have reviewed.

It returns 6.97% a year, because it runs for 64 years.

This is the same lesson as Sanchay Plus, where the option with the biggest multiple was not the one with the best rate. A multiple is a rate multiplied by time, and over 64 years time does nearly all the work. A number that large should prompt you to check the term, not to be impressed.

Return of mortality charges: real, and conditional

This is the plan's most distinctive feature and it is genuinely good. At maturity, all mortality charges deducted over the policy are added back to your fund value. Combined with no allocation charge, the surviving cost is essentially the fund management charge.

The conditions are where care is needed. The refund is not paid where the policy is:

• surrendered,
• discontinued, or
• made paid-up,

and it requires that all due premiums have been paid. It is also unavailable where the premium-waiver benefit was triggered by the proposer's death.

So it is a retention device as much as a benefit. Stop paying in year eight of a twenty-year policy and you lose every rupee of it. That is worth knowing before you rely on it, because it converts a headline feature into a reason you cannot afford to stop.

On the Golden Years option, which runs to whole of life, the refund is credited at the end of the policy year coinciding with or following the life assured's 70th birthday rather than at maturity.

The rest of the structure

Special addition: 1% of the annualised premium is added to the fund at allocation for the first five policy years, on regular and limited pay, and 1% of a single premium at allocation. Small, but it is additive rather than deducted.

Lock-in: five years, as on every ULIP. Exit before it ends and the proceeds move to a discontinuance fund, where only the fund management charge applies, until the period is over.

Entry age: from 30 days on Invest Plus, to 65. Maturity from 18 to 75, and to 99 on Golden Years. Minimum half-yearly premium is ₹6,000.

Three options: Invest Plus is straight investment with cover. Premium Waiver waives future premiums on the proposer's death and keeps the fund growing for the life assured, which is the child-plan use. Golden Years is the whole-of-life retirement version.

Who it suits

Someone who wants market-linked growth inside an insurance wrapper, will hold to maturity, and has looked at the one-point drag and decided it is acceptable for what the wrapper gives them - the tax treatment, the waiver option, the discipline.

It does not suit someone who may need to stop paying. The lock-in is five years and the mortality refund is lost on surrender, discontinuance or paid-up status.

And it is not life cover. A ₹5,00,000 sum assured on a ₹50,000 premium is ten times the annual premium, which is the regulatory minimum rather than income replacement. That job belongs to term insurance, and the distinction is in life insurance vs term insurance.

FAQs

What return does HDFC Life Click 2 Wealth give?

It depends on the funds you hold, because it is unit linked and nothing is guaranteed. On the brochure's own Invest Plus illustration, an assumed 8% gross return produces a net 6.99% a year and an assumed 4% produces 3.03%. Those two rates are IRDAI-prescribed comparison scenarios rather than forecasts.

What are the charges in Click 2 Wealth?

Fund management and mortality only, with no premium allocation charge. The fund management charge is 0.80% a year on the Liquid, Bond Plus and Secure Advantage funds and 1.35% on the equity and hybrid funds, which is the regulatory cap. Mortality charges are refunded at maturity subject to conditions. On the brochure's illustration the total drag works out at about one percentage point a year.

Is the return of mortality charges guaranteed?

It is contractual but conditional. The refund is not paid if the policy is surrendered, discontinued or made paid-up, and it requires all due premiums to have been paid. It is also unavailable where the premium-waiver benefit was triggered by the proposer's death. Treat it as a benefit for people who will hold the policy to the end.

Why does the illustration show such a large maturity value on Golden Years?

Because it runs 64 years. The ₹5,18,47,753 figure at the 8% scenario is 29.63 times the premiums paid, and works out at 6.97% a year. A long term makes a multiple look dramatic without changing the rate, so the term is the first thing to check when a projected value looks unusual.

Which fund does the brochure illustration assume?

The Liquid Plus fund, at 100% of premium. That fund carries the lowest fund management charge in the plan at 0.80%, against 1.35% on the equity funds, so the charge drag shown is close to a best case. Ask for an illustration on the fund you would actually hold.

What is the lock-in period for Click 2 Wealth?

Five years, as on every ULIP in India. If you exit before it ends, the proceeds move to a discontinuance fund where only the fund management charge is deducted, and are released when the lock-in period is over.