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Kotak Premier Endowment Saving and Investment Life Insurance Plan and Policy

Kotak Premier Endowment Saving and Investment Life Insurance Plan and Policy - A traditional participating endowment assurance plan which focuses on turning long term savings into funds that aid in financial security and fulfilling future needs. The plan provides a life cover that ensures any exigencies are dealt with in a better manner. This plan comes with regular or limited premium payment terms and is meant for people who wish their savings to return greater profits and get a lump sum value through regular savings over a longer period.

Eligibility - Kotak Premier Endowment Saving and Investment Life Insurance Plan and Policy

The plan could be of a tenure as low as 10 years and as high as 30 years and as per those, the eligibility conditions for availing this policy can be depicted in the table mentioned below -

Parameter

Minimum

Maximum

Policy Term (Years)

10

30

Entry Age

18 years

60 years

Maturity Age

28 years

70 years

Key Features - Kotak Premier Endowment Saving and Investment Life Insurance Plan and Policy

This plan meant for financial security planning has the following salient features -

Parameters

Details

Plan Type

Traditional participating non-linked endowment assurance plan

Basis

Individual policy

Policy Term

10 years to 30 years

Policy Validity

Depends on the chosen policy term and payment term

Basic Sum Assured

Depends on premium chosen, in case of regular premium payment, the minimum possible amount would INR 63,755

Discount on Sum Assured

In case the sum assured amount is more than INR 5,00,000, a discount of Rs. 2 will be provided per 1000 of Sum Assured

Additions/Bonuses

Simple Reversionary Bonus, Interim Bonus, Terminal Bonus (if any), Accrued Guaranteed Additions

Coverage

Maturity Benefit = Sum Assured + Accrued Guaranteed Additions + Simple Reversionary Bonuses + Interim Bonus + Terminal Bonus (subject to availability)

 

Settlement Option - As per this option, the policyholder can avail 50% of the Maturity Benefit as a lump sum and the rest can be paid out in installments over a period of 5 or 10 years at a minimum frequency of monthly payouts and maximum frequency of yearly payouts. This option is also available to the nominee in case of Death Benefit

 

Death Benefit = Higher of (Sum Assured, 11 times or 7 times annualised premium and 105% of all premiums paid) + Accrued Guaranteed Additions + Simple Reversionary Bonuses + Interim Bonus + Terminal Bonus (subject to availability)

 

Surrender Benefit = Guaranteed Surrender Value or Special Surrender Value (subject to payment of premiums of 2 or 3 years)

Free look Period

30 days in case of online purchase. 15 days otherwise

Grace Period

15 days for monthly payment, 30 days for all other premium payment frequencies

Nomination and Assignment

Nomination and assignment facility available but only one can be chosen at a time

Reinstatement or revival

Policy, if not surrendered, can be revived within two years from the date of last unpaid premium for premium payment terms of less than or more than 10 years

Rider Options

There are six optional riders that can be used to make the risk cover offered by this plan more comprehensive

Benefits and Advantages - Kotak Premier Endowment Saving and Investment Life Insurance Plan and Policy

This plan from Kotak Life Insurance is aimed towards furthering long term savings and helps in building a corpus for a secure financial future. Life insurance provided by this policy throughout the policy term is an added benefit. The advantages of this plan can be outlined as the following -

  1. Life cover is present throughout the policy term
  2. Flexible long term policy tenures that aid in a better financial planning
  3. Regular additions and bonuses allow for a btter return on savings done through premiums
  4. Limited premium payment options help in case of financial constraints
  5. Applicable tax benefits can be availed as per Sections 80C, 80D and 10(10D) of the Income Tax Act

The key benefits under this policy can be explained as below -

  1. Maturity Benefit - After the policy tenure is over or it reaches the maturity age, this amount can be paid to the policyholder or nominee. The maturity benefit includes the Sum Assured along with the accrued Guaranteed Additions and if applicable, accrued Reversionary Bonuses, Interim Bonus and Terminal Bonus
  2. Death Benefit - In case of the death of the insured life, the Minimum Death Benefit will be payable to the nominee. Accrued Guaranteed Additions, Reversionary Bonuses, Interim Bonus and Terminal Bonus if any, will also be payable. The Minimum Death Benefit (MDB) is calculated as per two different options -
    1. If Entry Age is less than 45 years, the MDB will be the higher of sum assured, 11 times annualised premium or 105% of the total premiums paid till the date of demise
    2. If Entry Age is more than or equal to 45 years, the MDB will be the higher of sum assured, 7 times annualised premium or 105% of the total premiums paid till the date of demise
  3. Policy Loan - Once the policy has attained a surrender value, post premium payment of 2 years or 3 years (as the case may be), a loan of up to 80% of the surrender value can be availed
  4. Surrender Benefit - In case 2 or 3 years’ premiums have been paid in full, the policy would acquire a Guaranteed Surrender Value and the same will be paid to the policyholder. If a Special Surrender Value decided by the insurer is higher than the GSV, the policyholder would be entitled to the same
  5. Tax Benefit - The contributions made towards the premiums of this policy can be tax deductible as per Sections 80C, 80D and the received benefits can fall under Section 10(10D). These benefits are dependent on the prevailing tax laws

Policy in Action - Kotak Premier Endowment Saving and Investment Life Insurance Plan and Policy

Ankit, aged 35 years, decides to go for a 15 years term of Premier Endowment Policy. He opts for a regular premium payment term and thus needs to pay the premium for a period of 15 years regularly for a Basic Sum Assured of INR 5,00,000. The following table illustrates the various benefits that would be payable for the policy under the given terms and conditions -

Age of Ankit (in years)

Policy Years Progression

Cumulative Annualised Premium

Accrued Guaranteed Additions

Total Maturity Benefit

 

Guaranteed Death Benefit

       

At 4%

At 8%

 

36

1

Rs. 40,460

Rs. 25,000

N/A

N/A

Rs. 5,25,000

40

5

Rs. 2,02,300

Rs. 1,25,000

N/A

N/A

Rs. 6,25,000

45

10

Rs. 4,04,600

Rs. 1,25,000

N/A

N/A

Rs. 6,25,000

50

15

Rs. 6,06,900

Rs. 1,25,000

Rs. 6,97,063

Rs. 9,12,500

Rs. 7,62,245

As can be seen from the table above, for a sum assured of Rs. 5,00,000, Ankit will need to pay an annual premium of Rs. 40,460. All the figures mentioned in this example are exclusive of taxes and charges that might be added by the insurer.

Optional Riders under Kotak Life Premier Endowment Plan

The following riders can be availed optionally under the Premier Endowment Policy so as to get a more comprehensive coverage.

Rider Name

Details

Kotak Term/Preferred Term Benefit

An additional cover that is a protection over and above the Minimum Death Benefit

Kotak Accidental Death Benefit

Adds an Accidental Death Benefit to the policy by providing a lump sum amount

Kotak Permanent Disability Benefit

Provides installment payment on acceptance of claim of disability due to accident

Kotak Critical Illness Benefit

Allows payment of a maximum of 50% of basic sum assured on diagnosis of critical illness as defined by the insurer

Kotak Life Guardian Benefit

Pays the pending premiums on behalf of the policyholder in case of his/her death

Kotak Accidental Disability Guardian Benefit

Pays the pending premiums on behalf of the policyholder in case of his/her accidental disability

Premium Payment - Kotak Premier Endowment Saving and Investment Life Insurance Plan and Policy

The details of premium payment for this plan can be summarised in the table below -

Premium Parameter

Details

Premiums

Minimum of Rs. 8,000 per annum for regular pay modes, Rs. 15,000 per annum for all limited pay modes and no maximum limit

Premium Paying Term (PPT)

Regular and limited premium payment term are available. Limited pay is available for tenures of 5 years, 7 years, 10 years and 15 years

Premium Paying Frequency

Premiums can be paid in monthly, quarterly, half-yearly and yearly frequencies

Premium Modal Factor

With frequencies shorter than a year, modal factor is multiplied to indicate the applicable premium for the payment frequency. Modal factors for this policy are - Half-yearly - 51%, Quarterly - 26%, Monthly - 8.8%

Premium Paying Modes

ECS, debit cards, credit cards, cheques and other acceptable modes

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