Kotak Wealth Insurance Plan Review

8/6/2019 Kotak Wealth Insurance Plan Review

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Kotak Wealth Insurance Plan Review

Kotak Wealth Insurance Plan is a unit linked insurance plan (ULIP) such that if the Life Insured dies within the

policy tenure, the nominee would receive Triple Death Benefit. The nominee would receive Sum Assured, Fund Value

and Lump Sum Benefit of all future premiums paid.

Our Advice This plan has the unique feature of Death Benefit payment when the Life Insured and the

Policyholder dies, in case they are separate. So for example, if a person takes the policy for his wife, then he is the

policyholder who pays the premium and his wife is the Life Insured, on whose name the policy has been issued. Now,

if he dies within the policy tenure, then a Lump Sum Benefit would be paid since the payor is not alive anymore. And

in case, if the Life insured, i.e. the wife dies, then the beneficiary would get Sum Assured plus Fund Value as Death

Benefit of the Life Insured.

Key Features of Kotak Wealth Insurance Plan

y Unit linked insurance plan where the investment risk is borne by the policyholder

y Offers a unique feature of Triple Death Benefit

y Death Benefit is available even on death of the policyholder if different from the life insured.

y Comes with option of shorter premium payment term

Benefits you get from Kotak Wealth Insurance Plan

Death Benefit There is Triple Death Benefit under both options of this policy:

If the Life Insured and the Policyholder are the same, then death benefit is Sum Assured plus Fund value plus

Lump Sum Benefit of all future premiums that are due.

If Life Insured and Policyholder are not the same, then

On Death of the Life Insured, Death Benefit is Sum Assured plus Fund value

On Death of the Policyholder, Lump Sum Benefit of all future premiums that are due would be paid

Maturity Benefit On maturity, the Fund Value is paid to the policyholder.

Income Tax Benefit - Life Insurance premiums paid up to Rs. 1,00,000 are allowed as a deduction from the taxable

income each year under section 80C


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Eligibility conditions and other restrictions in Kotak Wealth Insurance Plan

Minimum Maximum

Sum Assured (in Rs.)

Higher of (10 X Annual

Premium)Or

(0.5 X Policy Term X Annual

Premium)

25 X Annual Premium

Policy Term (in years)10 years 30 years

Premium Payment Term (in years) 5 years / 10 years Equal to policy term

Entry Age of Policyholder(in years) 0 65

Age at Maturity (in years) 18 75

Single Premium (in Rs.) NA NA

Payment modes Only Yearly

Sample illustration of premium amount in Kotak Wealth Insurance Plan

Age = 35 years

Premium = Rs.50,000

Sum Assured = Rs 12,50,000

Policy Term = 20 yrs

Total Investment =Rs 50,000 X 20 years= Rs 10,00,000

Additional Features and Benefits of Kotak Wealth Insurance Plan


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Riders There are 3 riders available in this policy

1. Kotak Accidental Disability Guardian Benefit (ADGB)

2. Kotak Critical Illness Benefit (CIB)

3. Kotak Accidental Death Benefit (ADB)

Investment Fund OptionsIn this plan there are 8 Investment Fund Options

1. Classic Opportunities Fund

2. Frontline Equity Fund

3. Balanced Fund

4. Dynamic Floor Fund II

5. Bond Fund

6. Floating Rate Fund

7. Gilt Fund

8. Money Market Fund

Top-up

You can invest additional premiums as top-up premiums anytime except in the last five policy years.

The minimum top-up premium is Rs. 10,000.

Every Top-up premium shall have an Additional Sum Assured which will be 1.25 times or 1.1 times of the Top-up

premium paid. This Additional Sum Assured will be in addition to the life cover

Switching

You have the flexibility to switch investments from one fund to the other any time during the policy term.

First 4 switches are free in every policy year.

Partial Withdrawal

You are allowed to make partial withdrawals in this policy after 5 complete policy years

The minimum amount of partial withdrawal should be Rs. 10,000 such that one annual premium should be

maintained after Partial Withdrawal

What happens if?

You stop paying the premium before 5 years - If the policy holder stops paying the premium, the insurance cover

will cease and the fund value net of any discontinuance charge will be transferred to the Discontinued Policy Fund.

The Discontinued Policy Fund will be credited with a minimum interest rate of 3.5% p.a. and the proceeds from this

will be payable after the fifth policy anniversary. In case of death of the Life Assured during this period, only the

accumulated fund value will be payable to the nominee.


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You stop paying the premium after 5 years - If the policy holder stops paying the premium after 5 years, then the

accumulated policy fund amount till the date of discontinuance shall be paid to the policy holder and the policy will

terminate immediately.

You want to surrender the policy If the policy holder wants to surrender the policy before completing 5 years,

then the insurance cover will cease and the fund value net of any discontinuance charge will be transferred to the

Discontinued Policy Fund. The Discontinued Policy Fund will be credited with a minimum interest rate of 3.5% p.a.

and the proceeds from this will be payable after the fifth policy anniversary . In case of death of the Life Assured

during this period, only the accumulated fund value will be payable to the nominee.

If the policyholder surrenders the policy after completion of 5 policy years, then the insurance cover will cease and

your fund value shall be paid immediately and the policy would be terminated.

You want a loan against your policy - Loans shall be granted against the policy once two years' premiums have

been paid. The rate of interest shall be determined by the Company from time to time.

The maximum loan value is 40% of the Fund Value of the policy at that time

Kotak Life Secure Invest Insurance Plan Review

Kotak Secure Invest Insurance is a unit linked insurance plan (ULIP) with Capital Guarantee. This means that if the

market value of units on maturity is higher, then you get fund value based on the same. And in case if the marketperformance is poor, then your investment is protected by Capital Guarantee

Our Advice Any investment product carries a risk element and in ULIP products the insurance company passes

the risk on to the customer. In hope for good returns, customers also take such risks but end up exiting the policy

when they see the slightest volatility in the market. By providing the capital guarantee feature, Kotak Secure Invest

Insurance offers a safety net for amature ulip policy holders.

Key Features of Kotak Secure Invest Insurance

y Unit linked insurance plan with a capital guarantee

y Inbuilt investment advice so as to assist capital appreciation

y Option of shorter premium payment terms


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Benefits you get from Kotak Secure Invest Insurance

Death Benefit In case of death of the Life Insured, the nominee would get higher of Sum Assured or Fund Value.

Maturity Benefit On maturity, the Fund Value is paid to the policyholder.

Income Tax Benefit - Life Insurance premiums paid up to Rs. 1,00,000 are allowed as a deduction from the taxable

income each year under section 80C

Eligibility conditions and other restrictions in Kotak Secure Invest Insurance

Minimum Maximum

Sum Assured (in Rs.)

For age< 45 yrs: Higher of (10 X Annual Premium) OR (0.5 X

Policy Term X Annual Premium)

For age>= 45 yrs: Higher of (7 X Annual Premium) OR (0.25 X

Policy Term X Annual Premium)

Policy Term (in years) 10 30

Premium Payment Term (in years) 5 years / 10 years Equal to Policy Term

Entry Age of Policyholder 0 60

Age at Maturity 18 75

Regular Pay premium (in Rs.) 20,000 1,50,000 p.a.

Limited Pay premium (in Rs.) 50,000 1,50,000 p.a.

Payment modes Only Yearly

Sample illustration of premium amount in Kotak Secure Invest Insurance

Premium = Rs.1,00,000

Age = 35 years

Policy Term = 20 years

PPT = Regular Pay

Total Investment = Rs. 1,00,000 x 20 years = Rs.20,00,00


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Additional Features and Benefits of Kotak Secure Invest Insurance

Riders There are 6 riders available in this policy

1. Kotak Term / Preferred Term Benefit (KTB/KPTB)

2. Kotak Accidental Death Benefit (ADB)

3. Kotak Permanent Disability Benefit (PDB)

4. Kotak Critical Illness Benefit (CIB)

5. Kotak Life Guardian Benefit (LGB)

6. Kotak Accidental Disability Guardian Benefit (ADGB)

Investment Fund OptionsThere are 3Investment Funds available

1. Guarantee Fund

2. Money Market Fund

3. Frontline Equity Fund

Top-up

Not Allowed

Switching

You have the flexibility to switch investments from one fund to the other any time during the policy term.

First 4 switches are free in every policy year.

Partial Withdrawal

Partial withdrawals are allowed only after completion of 5 policy years. The minimum Partial Withdrawal is Rs 10,000

such that at least one years premium remain in the Fund Value.


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What happens if?

You want to surrender the policy If the policy holder wants to surrender the policy before completing 5 years,

then the insurance cover will cease and the fund value net of any discontinuance charge will be transferred to theDiscontinued Policy Fund. The Discontinued Policy Fund will be credited with a minimum interest rate of 3.5% p.a.

and the proceeds from this will be payable after the fifth policy anniversary . In case of death of the Life Assured

during this period, only the accumulated fund value will be payable to the nominee.

If the policyholder surrenders the policy after completion of 5 policy years, then the insurance cover will cease and

your fund value shall be paid immediately and the policy would be terminated.

You want a loan against your policy - There is no loan available under this plan

Kotak Life Insurance

June 14, 2011 underLife Insurance | Comment now

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Kotak Mahindra Group is one of Indias leading companies that offer life insurance policies in

India. The company is a Joint venture between Kotak Mahindra Bank, Old Mutual PLC andaffiliates in the ratio 76 : 24. Old Mutual PLC is a wealth management and savings company

headquartered in the UK.

Kotak Mahindra Group is one of the most reputed companies in India. It is one of the leaders in

the banking and financial services sector. There are a range of services offered by KotakMahindra, such as asset management, life insurance, corporate and investment banking, stock

broking, commercial banking, personal finance and more. Kotak Life Insurancehas a largeclient base all over the country.

Kotak Life Insurance was first launched in 2001. The growth that has been seen in the

insurance sector by the product since its inception is simply remarkable.


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The employee strength is around 5, 565 people,with more than a hundred and ninety seven branches and about 5, 665 employed in various

positions.

Kotak Life Insurance offers many types of insurance plans for people. It offers insurancesolution for the individual and groups under the following categories-

Kotak Life Insurance records 42% growth in profit in FY10-11

May 10, 2011 04:31 PM |

Moneylife Digital Team

Kotak Life Insurance profit after tax for FY 2010-11 stood at Rs101 crore, up from Rs71 crore the previous

year

Kotak MahindraOld Mutual Life Insurance (Kotak Life Insurance) has announced a record profit growth of 42% in the

financial year ended 31 March 2011. The companys profit after tax for FY 2010-11 stood at Rs101 crore, up from

Rs71 crore the previous year. In FY10-11, the gross total premium received has grown to Rs2,975 crore, of which

new business premium accounted for Rs1,253 crore and renewal premium accounted for Rs1,722 crore.

The company has declared bonuses in respect of participating policies with an accumulation fund, resulting in total

returns for the year ended 31 March 2011 of 8% for annuity policies and 7% for all other policies. A reversionary

bonus of 2% has also been declared on products eligible for reversionary bonus. These bonus declarations resulted

in the value of policyholders benefits increasing by Rs26 crore, an increase of 30% over the previous year.

Pankaj Desai, managing director, Kotak Life Insurance said, As the insurance industry enters into the next phase of

consolidation, our focus clearly is on efficient management of capital, driving efficiency at the distribution level, cost

consciousness and quality in customer service. We are happy to have posted good growth despite the uncertainty the

sector witnessed the previous year and this can be attributed to our strong sales force, innovative new products and

strong relationships with intermediaries.


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Executive Summary

The service industry is one of the fastest growing sectors in India today. The upcoming sectors

which are really showing the graph towards upwards are - Telecom, Banking, and Insurance.

These sectors really have a lot of responsibility towards the economy.

Amongst the above-mentioned areas insurance is one sector, which took a lot of time in

positioning itself. The insurance business of non-life companies was not much in problems but

the major problem was with life insurance. Life Insurance Corporation of India had monopoly

for more than 45 years, but the picture then was completely different. Previously people felt

that Insurance is only for classes not for masses but now the picture is vice-versa.

The story of insurance is probably as old as the story of mankind. The same instinct that

prompts modern businessmen today to secure themselves against loss and disaster existed in

primitive men also. They too sought to avert the evil consequences of fire and flood and loss of

life and were willing to make some sort of sacrifice in order to achieve security. Though the

concept of insurance is largely a development of the recent past, particularly after the industrial

era past few centuries yet its beginnings date back almost 6000 years.

Life Insurance in its modern form came to India from England in the year 1818. Oriental Life

Insurance Company started by Europeans in Calcutta was the first life insurance company on

Indian Soil. All the insurance companies established during that period were brought up with

the purpose of looking after the needs of European community and these companies were not

insuring Indian natives. However, later with the efforts of eminent people like Babu Muttylal

Seal, the foreign life insurance companies started insuring Indian lives. But Indian lives were

being treated as sub-standard lives and heavy extra premiums were being charged on them.

Bombay Mutual Life Assurance Society heralded the birth of first Indian life insurance company

in the year 1870, and covered Indian lives at normal rates. Starting as Indian enterprise with

highly patriotic motives, insurance companies came into existence to carry the message of

insurance and social security through insurance to various sectors of society. Bharat Insurance


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Company (1896) was also one of such companies inspired by nationalism. The Swadeshi

movement of 1905-1907 gave rise to more insurance companies. The United India in Madras,

National Indian and National Insurance in Calcutta and the Co-operative Assurance at Lahore

were established in 1906. In 1907, Hindustan Co-operative Insurance Company took its birth in

one of the rooms of the Jorasanko, house of the great poet Rabindranath Tagore, in Calcutta.

The Indian Mercantile, General Assurance and Swadeshi Life (later Bombay Life) were some of

the companies established during the same period. Prior to 1912 India had no legislation to

regulate insurance business. In the year 1912, the Life Insurance Companies Act, and the

Provident Fund Act were passed. The Life Insurance Companies Act 1912 made it necessary that

the premium rate tables and periodical valuations of companies should be certified by an

actuary. But the Act discriminated between foreign and Indian companies on many accounts,putting the Indian companies at a disadvantage.

The formation of IRDA, entrance of private life insurance companies into India with one foreign

partner, compulsory training of Insurance agents etc. developments started to take place. And

this was the time when these companies started searching for proper channel partners who can

help the organization in expanding its network and business in India.

Channel partners are those who are going to be into direct selling of companys products i.e.

the insurance policies. They are the link between the customers and the management or

company. These channel partners are people with different profiles. They are selected on some

grounds like their network of people, their problem handling ability, convincing power and lot

many things.

The main idea behind companys Questionnaire Survey is to find out and analyze the proper

profile that can be recruited by company as a channel partner. Company has been focusing on

some of the profile that can be very beneficial for the company. For example Chartered

Accountants, Tax Consultants, Postal agents, Banks Daily Collection Agents etc. the main idea

behind targeting the above profile is strong client network which is really very important for an

insurance company.


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The project title is Potential of Life Insurance Industry in Surat Market. This shows the scope

for private insurance companies have great opportunities to cover the market and can insure

the customer. With the initiation of the deregulation in the Indian insurance market, the

monopoly of big public sector companies in life insurance market has been broken. New private

players have entered the market and with their innovative approaches and better use of

distribution channels and technology, they are eating in to the shares of established publicsector companies in Indian Insurance Market. Since the deregulation has been put in to place,

the market share of LIC has come down to 71.4% in life insurance market while the private

players have captured around 17% market in the general insurance segment. This report

includes the key private players in the insurance market such as ICICI Prudential, Kotak Life

Insurance Bajaj Allianz, Birla Sun life, and TATA AIG. It also includes the leading competitors in

the life insurance and general insurance segments along with their market shares.

EXECUTIVE SUMMARY

In todays corporate and competitive world, I find that insurance sector has the maximum

growth and potential as compared to the other sectors. Insurance has the maximum growthrate of 70-80% while as FMCG sector has maximum 12-15% of growth rate. This growth

potential attracts me to enter in this sector and KOTAK LIFE INSURANCE has given me the

opportunity to work and get experience in highly competitive and enhancing sector.

Companies now are tapping a lot of ways to capture the market and hence adopting different

ways to hold the large portion of the market.

My summer training learning helped me a lot to complete my project in order to learn a lot of

things of the corporate. As a project trainee the first task given to me was to understand the

basic behaviour of the consumer in order to manipulate the market according to our targetcompetition. For this I developed a questionnaire and I did my survey in Jaipur city.

This job training also helped me a lot in understanding the process of building effective

marketing channels for life insurance products by establishing network of life insurance

advisors.

Documents

Kotak Wealth Insurance Plan Review