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Investment Plans 705 views December 1, 2020
People work hard to achieve their life goals, but an unknown financial problem arises from somewhere and prevents them from achieving the same. To cope with such situations and live a worry-free retirement life, Kotak Life provides you the “Kotak SmartLife Plan”, a limited pay participating endowment plan that can give you an option of cash bonus payouts every year right from the end of the 1st policy year. Read this article to get more information on Kotak SmartLife Plan.
Table of Contents
This benefit is for the policyholder and will depend on the options you choose at the time of policy inception.
Cash Bonus Payout: From the end of the first policy year, a Cash Bonus will be declared and paid to the life assured till the end of the policy term, death or surrender, whichever is earlier.
Paid-Up Addition option: From the end of the first policy year, a Cash Bonus will be declared to purchase Paid-Up Additions (also called additional Sum Assured). Paid-Up Addition is an additional guaranteed benefit payable on death or maturity. It is calculated as follows: [Paid-Up Addition Factor for the attained age x Cash Bonus].
Note – Cash Bonus for the Basic Sum Assured and Paid-Up Additions will be declared separately.
If you have survived till the end of the policy term and all due premiums are paid, you are eligible for the following Maturity Benefit.
For Cash Bonus Payout – Basic Sum Assured + Cash Bonus + Terminal Bonus (if any)
For Paid-Up Addition – Basic Sum Assured + Cash Bonus + Accrued Paid-up Addition + Terminal Bonus (if any)
The death benefit will be paid to the nominee or beneficiary only if all the due premiums have been paid till the date of death. Let’s see what benefits will your nominee get as per your chosen option if you die during the policy term –
Cash Bonus Payout – Sum Assured on Death + Interim Bonus + Terminal Bonus (if any)
Paid-Up Addition – Sum Assured on Death + Accrued Paid-up Additions + Interim Bonus + Terminal Bonus (if any)
Sum Assured on Death will be the higher of the following:
Note – If the insured dies during the grace period, if there is any due premium till the date of death, it will be deducted from the death benefit. When the insured uses the no-annual Premium Payment mode in the policy, the balance for that year will also be deducted from the Death Benefit.
If you need more protection under Kotak SmartLife Plan, you can choose an optional rider from the wide range mentioned below:
Kotak Term Rider: An additional death cover over and above the Kotak SmartLife Plan Death Benefit.
Kotak Accidental Death Benefit: A lump sum amount will be paid on the accidental death of the Life Insured in addition to the Death Benefit of the base plan.
Kotak Permanent Disability Benefit: If Life Insured becomes disabled due to an accident, the company will pay a monthly installment to him/her.
Kotak Life Guardian Benefit: The future premiums will be waived if the policyholder dies, and the base plan will continue without any change.
Kotak Accidental Disability Guardian Benefit: If an accident causes disability, future premiums will be waived, and the base plan will continue without any change.
Kotak Critical Illness Plus Benefit: Your Rider Sum Assured becomes payable if any one of the 37 covered critical illnesses arises.
Kotak SmartLife Plan acquires a Guaranteed Surrender Value (GSV) if you have paid full premiums for two consecutive years. And as per your chosen option, the Guaranteed Surrender Value(GSV) will be as follows:
Cash Bonus Payout: Percentage of the Total PaidPremiums excluding the applicable GST and Cess and Rider premium (if any) + Interim Bonus + Terminal Bonus (if any) – Total Applicable Survival Benefit.
Paid-Up Additions: Percentage of the Total Paid Premiums excluding the applicable GST and Cess, and Rider premium + Cash Value of Paid-up Additions + Interim Bonus + Terminal Bonus (if any) – Total Applicable Survival Benefit.
Kotak SmartLife Plan Total Applicable Survival Benefit is:
Cash Value of Paid-Up Addition is calculated using the formulae: [Accrued Paid-Up Addition x Cash Value Factor for Paid-Up Addition]
Kotak SmartLife Plan Guaranteed Surrender Value cannot be less than zero. On the policy surrender, a higher SSV or GSV will be payable to the policyholder. And this will be paid in a lump sum.
If your Kotak SmartLife Plan acquires a Surrender Value, and the subsequent premiums are not paid within the grace period, your policy will be converted into a Reduced Paid-Up. It will no longer be eligible for any future Cash bonus. However, the Rider benefits are available as per the Basic Sum Assured of the reduced paid-up policy.
Kotak SmartLife Plan Basic Sum Assured is reduced to Reduced Paid-Up as follows:
Basic Sum Assured x [(Total paid premiums/ Total payable premiums during the policy term)]
The Sum Assured on Death will also be reduced to Reduced Paid-Up as follows:
Sum Assured on Death on Reduced Paid-Up x [(Total paid premiums/ Total payable premiums during the policy term)]
Reduced Paid-up Policy Surrendered – The surrender value is calculated as per the value mentioned under the ‘Surrender’ section of your policy document.
Death Benefits of the Reduced Paid-up Policy
Maturity Benefit of the Reduced Paid-up Policy
Your Reduced Paid-Up policy can be revived within 5 years from the due date of the first unpaid premium. If the policy is not revived, it will continue as Reduced Paid-Up until maturity.
You have a free look period of 15 days for a policy except for Distance Marketing Channel for which you have 30 days from the date of receipt of the policy. In this period, you can return the Kotak SmartLife plan if you don’t agree to its terms and conditions.
If you return the policy, you will be entitled to a refund of the paid premium after adjustment for the medical examination, stamp duty, and proportionate risk premium. If you get the policy through the insurance Repository (IR), the free look period is applicable from the date of the email sent by the IR.
Distance Marketing includes the sourcing of policies via Voice mode, Short Messaging Service (SMS), E-mail, Television (DTH), direct postal mail, newspaper and magazine inserts.
Under the policy, you can avail of tax benefits under Section 80C and Section 10(10D) of the Income Tax Act, 1961. The tax benefits are subject to change, so it is advised to consult your Tax Advisor first.
Discount on High Sum Assured and Female Lives Premium Payment
A discount on premium rates will be offered for high Basic Sum Assured and female life insured. The Discounted Premium is determined as follows:
An additional discount of INR 1 per 1,000 Basic Sum Assured is available for female lives.
If the life insured dies due to suicide within 12 months from the date of risk commencement, 80% of the total paid premiums will be payable to the nominee. In the case of suicide after 12 months from the date of risk commencement, the following will apply:
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