HDFC Life Sanchay Plus Review: 3.94x Is Not the Best Option

Is HDFC Life Sanchay Plus a good plan?

It is a non-participating, non-linked savings plan, so every rupee it pays is contractual. Nothing about it is hidden, and the death benefit floor is better constructed than most.

What makes it worth a close read is that it carries four options, and they do not rank the same way depending on which number you look at. The option showing the biggest multiple is not the option paying the best rate. That is the whole case for computing the rate, demonstrated inside one product.

The four options, both ways round

From HDFC Life's own sample illustration: a healthy male aged 30, paying ₹1,00,000 a year plus taxes, surviving the term. The brochure illustrates Life Long Income at age 50 instead, so it sits below the comparable three.

Read the multiple column and Long Term Income is the clear winner of the comparable three, at 3.10 times the money paid in against Guaranteed Maturity's 2.56.

Read the rate column and that ordering reverses. Guaranteed Maturity returns 6.15% a year; Long Term Income returns 5.34%. The plan paying back the larger multiple is paying it back over a much longer stretch, and the extra years are doing the work that the multiple takes credit for.

Eight-tenths of a percentage point, compounding for two decades, is not a rounding difference. It is the entire basis on which these two options should be chosen between, and it is invisible in the multiple.

Life Long Income shows this most starkly

The Life Long Income option displays 3.94 times the premiums paid, the biggest number anywhere in the brochure. It returns 5.24% a year.

The reason is simply time: it pays ₹77,500 a year from year 12 until age 99, which from an entry age of 50 is 38 years of payments. Multiply anything by 38 years and the total looks impressive. Divide it properly by the time taken and it is a middling rate.

To be fair to the option, it is illustrated at entry age 50 rather than 30, so it is not competing directly with the other three. But the lesson transfers: the longer a plan runs, the more flattering its multiple and the less that multiple tells you.

What the spread actually is

Worth saying plainly, because it cuts both ways: all four options land between 5.03% and 6.15% a year. Nothing here is predatory and nothing is remarkable. The spread within a single product is about one percentage point.

That is the honest verdict on guaranteed savings plans generally. They pay what they pay, the figure is knowable in advance, and the decision is whether that rate is one you want for the next two or three decades. Our guide to reading a benefit illustration sets out how to run this on any quote you are handed.

The death benefit is well built

This is the part of the filing that deserves credit. The death benefit is the sum assured on death plus accrued guaranteed additions, where sum assured on death is the highest of:

• 10 times the annualised premium, or 1.25 times a single premium,
• 105% of total premiums paid,
• the sum assured on maturity, or
• the absolute amount assured on death.

Taking the highest of four floors rather than a single figure is a defensive structure, and the 10x-annualised-premium leg means the early years are not thin. On a ₹1,00,000 annual premium the brochure shows a death benefit at inception of ₹12,50,000 on the Guaranteed Maturity option.

That said, the same caution applies as on every savings plan: ₹12.5 lakh is not income replacement. If people depend on your earnings, that job belongs to term insurance, and the distinction is set out in life insurance vs term insurance.

Eligibility, and who each option is built for

Entry from 301 days on the two Guaranteed options means they are sold as child plans, usually against a known future cost. Life Long Income opens at 50, which places it as a retirement-income product rather than a savings one.

Minimum instalment premium is ₹30,000 a year, or ₹15,000 half-yearly, ₹7,500 quarterly, and ₹30,000 for single pay.

What to ask before signing

1. Ask which option you are being quoted, by name. A multiple quoted from one option tells you nothing about another, and they differ by more than a percentage point.
2. Ask for the rate, not the multiple. If the answer comes back as "you get X times your money", the question has not been answered.
3. Get the illustration for your own age and premium. The published example is a 30-year-old on ₹1,00,000 a year; yours will differ.
4. Check the tax position. Maturity proceeds on a non-linked policy issued from 1 April 2023 are exempt under Section 10(10D) only where aggregate annual premiums across such policies are ₹5 lakh or less and the premium stays within 10% of the sum assured. At ₹1,00,000 against a ₹12,50,000 death benefit the example clears both, but larger cases need the arithmetic run.
5. Separate the cover question. Decide protection and saving independently, then see whether bundling still appeals.

FAQs

What return does HDFC Life Sanchay Plus give?

On HDFC Life's own published illustration for a 30-year-old paying ₹1,00,000 a year, the four options return between 5.03% and 6.15% a year. Guaranteed Maturity is the strongest at 6.15%, paying ₹25,59,350 at year 20 against ₹10,00,000 of premiums. Your own figures will differ with age, option and term.

Which Sanchay Plus option is best?

On the published example, Guaranteed Maturity returns the most at 6.15% a year, despite showing a smaller multiple than Long Term Income. That is the point worth carrying away: Long Term Income displays 3.10 times the premiums paid against Guaranteed Maturity's 2.56 times, and still returns less per year, because it takes far longer to pay out.

Why does the option with the biggest multiple return less?

Because a multiple ignores time. Life Long Income shows 3.94 times the premiums paid, the largest figure in the brochure, and returns 5.24% a year, because it pays out over 38 years. The longer a plan runs, the more flattering its multiple looks and the less it tells you about the rate.

What is the death benefit on Sanchay Plus?

The sum assured on death plus accrued guaranteed additions, where the sum assured on death is the highest of 10 times the annualised premium, 105% of total premiums paid, the sum assured on maturity, or the absolute amount assured. Taking the highest of four floors is a defensive structure, though the amounts involved are savings-plan amounts rather than income replacement.

What is the minimum premium for Sanchay Plus?

₹30,000 a year on annual mode, ₹15,000 half-yearly, ₹7,500 quarterly, or ₹30,000 as a single premium, across all four options.

Can I buy Sanchay Plus for a child?

The Guaranteed Income and Guaranteed Maturity options accept entry from 301 days, so yes, they are commonly sold as child plans against a known future cost such as education. The return is the same as it would be for any other life assured, so judge it on the rate rather than on the framing.