Term Insurance 172 views December 18, 2020

Kotak Mahindra Life Insurance provides customers a term insurance plan with which they can protect their loved one’s future. Under Kotak Term Insurance policy, you will have long term coverage with a high level of financial protection in case you die during the policy term. And if the policyholder wants, they can customize their Kotak Term Insurance policy too. The Life Assured can also claim tax deduction under section 80C and 10(10D) of the income tax act, 1961. Let’s read this page and know about the Kotak Mahindra Term Insurance policy benefits and features.

Term Insurance

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Kotak Mahindra Life Term Insurance Plans

The following are the two Kotak Term Insurance plans that you can look forward to.

Kotak Term Plan

A pure risk cover plan is an economical option to have and get a high level of financial protection. Kotak Term Plan is a non-participating plan with no maturity benefits. The following is the key features of this Kotak Term Insurance policy:

  1. Low-cost insurance with a premium of INR 199 per month
  2. Convert your Kotak Term Plan to any of the offered Kotak Term Insurance
  3. Premium payment options of single and regular pay available
  4. You can add riders to your Kotak Term Plan

Death Benefit:– Kotak Term Plan death benefit is payable to the beneficiary, that would be Sum Assured (SA) less the balance of the premium (if any).

Kotak e-Term Plan

This is a specially Kotak Term Insurance plan that protects your loved ones. A truly economical way of getting a high level of protection with special premium rates for non-tobacco users and women. The following is the key features of the Kotak e-Term plan:

  1. Low-Cost Insurance
  2. 3 Plan Options – Life Option, Life Plus Option & Life Secure Option
  3. 3 Payout Options – Immediate Payout, Level Recurring Payout &  Increasing Recurring Payout
  4. Enhance your cover with Kotak Term Insurance Riders
  5. Enhanced Protection – Accidental Death, Critical Illness and Total Permanent Disability
  6. Special Premium Rates if you are women or a non-tobacco user

Death Benefit:– If the Life Assured dies during the policy term, any of the following death benefits will be payable to the beneficiary as per the case.

Event of DeathLife OptionLife Plus OptionLife Secure Option
Natural100% of the Sum Assured100% of the Sum Assured100% of the Sum Assured
Accident100% of the Sum Assured100% of the Sum Assured plus Accidental Death Benefit, subject to a maximum INR 1 Crore100% of the Sum Assured
Total & Permanent Disability (TPDN/AN/AWaiver of all future Premiums till the end of the policy term
Suicide80% of the Total Paid Premiums80% of the Total Paid Premiums80% of the Total Paid Premiums

Sum Assured on Death for Regular and Limited Premium is the highest of the following – Sum Assured, 11X Annualised Premium, 105% of all paid premiums

Sum Assured on death for Single Premium Sum shall be the higher of the following – Basic Sum Assured or 1.25X the Single Pai Premium.

Payout Option for Kotak e-Term Plan Death Benefit

  1. Immediate Payout:- Sum Assured on death is payable in a lump sum
  2. Level Recurring Payout:- Lump sum payment of 10% of the Sum Assured on death will be paid at the time of claim settlement, and 6% of the Sum Assured on death at the end of every year for up to 15 years, starting from the year of death.
  3. &  Increasing Recurring Payout:- Receive a lump sum of 10% of the Sum Assured on death at the time of claim settlement and get 6% of the Sum Assured on death at the end of the year, starting from the date of death. After that, the payout will continue to increase by 10% every year (at a simple interest) for a maximum of 15 years.

Under the Level or Increasing Recurring Payout option, the nominee can receive the death benefit in a lump sum instead of recurring payouts. After that, a discounted value of the outstanding payout is paid as a lump sum. However, the Accidental Death Benefit under the ‘Life Plus’ option shall be payable in a lump sum, irrespective of your selected payout option. And there is an option under the Level or Increasing Recurring Payout where the nominee can receive an annual payment in a monthly mode. These monthly payments shall be 8.22% of the annual payments.

Step-Up Option

Under this Kotak Term Insurance, you can go for the Step-Up option at the time of purchasing the policy. You can increase your sum assured for different life events. Marriage (An increase of SA by upto 50%), First House Purchase (An increase of SA by upto 50%) and Birth or legal adoption of a child (An increase of SA by upto 25%).

For this option, the following fees apply to your Kotak e-Term plan

  1. 3% of th SA (if the policy term is up to 15 years)
  2. 5% of the SA (if the policy term is above 15 years)

Step-Down Option

If your responsibilities reduce in life during the Kotak e-Term plan, you can step down to a lower amount of cover. This will provide you a minimum amount of cover, and you can exercise it anytime during the policy term. And the Step-Down shall be effective from the next premium due date.

You can do the Kotak e-Term Plan Step-Down only once during the policy term, and in such case, your premium shall be recalculated based on the revised sum assured, the age at entry and the original policy term. Pay a charge of INR 500 in case you choose to exercise the Step-Down Option.

Eligibility Criteria for Kotak Term Insurance

If you are interested in any of the above-mentioned term insurance plans, do check the below eligibility criteria before you proceed to it:

  1. Entry age 18-65 years
  2. Maturity age is a minimum of 23 years, and a maximum of 70 years (Kotak Term Plan) and 75 years (for Kotak e-Term Plan)
  3. Kotak Term Insurance policy tenure is for a minimum of 5 years, and a maximum of 30 years (Kotak Term Plan) and 40 years (Kotak e-Term Plan)
  4. You have Regular Pay, Limited Pay and Single Pay premium payment options in Kotak Term Insurance
  5. Single, Yearly, Half-Yearly, Quarterly and Monthly premium payment modes are available
  6. Free Look period of 15/30 days
  7. A grace period of 30 days for Yearly, Half-Yearly or Quarterly, and a 15-day grace period for monthly mode

Kotak Term Insurance Riders

You can avail of the following rider benefits if you pay an additional premium:

  1. Kotak Accidental Death Benefit – Provide a lump sum amount to the nominee on the accidental death of the Life Assured besides the Sum Assured on death.
  2. Kotak Permanent Disability Benefit – The company will pay installments if the Life Assured has become disabled due to an accident.
  3. Kotak Critical Illness Plus Benefit – A Rider Sum Assured becomes payable if a claim for any one of the 37 covered critical illnesses is filed by the Life Assured.

Surrender of Kotak Term Insurance

If there is a financial emergency, you can surrender your term plan if you have chosen a single premium payment option.

Surrender Value = 75% x (single paid premium) x ((policy term – 1)/Policy Term ) x (Outstanding policy term / policy term).

For Limited premium payment option

Surrender Value = 75% x (total paid premium) x ((policy term – PPT)/Policy Term ) x Outstanding Policy Term/policy term).

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