Kotak Income Protection plan is a pure protection Life Insurance Plan by Kotak Life Insurance Company. In these uncertain times, we all want a secure future for our loved ones and make them financially secure in all circumstances. The protection plan from Kotak helps to plan a better future. The plan also has inflation covered with increasing monthly income at the rate of 6% per annum as monthly income compounding for the policy term in case of an eventuality. It also offers a lump sum death benefit to take care of immediate expenses.
The Kotak income protection plan ensures inflation protection by offering monthly income increase at 6% per annum compounding. This basically means that the monthly income offered in the plan will grow by 106% every year end from the end of the first policy year.
Female lives and non-smokers can enjoy preferred premium rates.
Policyholders have the freedom of cancelling the policy in 15 days and 30 days for a policy purchased through distance marketing channels, if they are not happy with the terms and conditions of the policy.
Optional rider benefit to enhance the protection offered in the plan.
Regular and limited pay premium payment term of 12 and 15 years.
Flexible options of premium payment mode available for annually, half-yearly, quarterly and on a month to month basis.
Grace period of 30 days grace to pay the premium due if the premium payment is defaulted. The grace period reduces to 15 days for monthly payment mode.
Limited pay policies will be converted to a reduced paid up policy on surrender.
Monthly Income increases throughout the Term
The Kotak Income Protection Plan ensures that in the unfortunate event of the policyholder’s untimely death, the family is looked after financially by providing a regular monthly income for an applicable pay-out period, subject to a minimum duration of 5 years.
The plan also ensures that the monthly income is protected against the year on year inflation, so that the family does not suffer from the cost of inflation in the future. This plan offers the benefit of Increased Monthly Income every year, where Increased Monthly Income is Initial Monthly Income growing every year at the rate of 6% compounding, i.e. every year the Monthly Income will grow to a 106% of the previous year’s Monthly Income from the end of first Policy year onwards.
For example:
Guaranteed pay-out period of Monthly Income:
The Kotak Income protection plan offers a minimum guaranteed pay-out period for the monthly income of 5 years, in case the balance Policy Term is less than 5 years. Thus, under any circumstance the monthly income pay-out period will be higher of - Balance Policy Term (Policy Term less year of death) Or 5 years.
Assured Benefit as lump sum on Death:
In the unfortunate event of death of the policyholder, an assured benefit is paid to the family to ensure that the family has adequate financial resources to meet the immediate expenses. The lump sum pay-out, which is the assured benefit, will be equal to 12 times of the increased monthly income in that present policy year.
For example – If the policyholder had chosen an Initial Monthly Income of INR 50,000 and he/she unfortunately dies in the third Policy Year, then the assured benefit will be-
12 X Increased Monthly Income in the third Policy Year = 12 X 56,180 = INR 674,160
Death Benefit
In the unfortunate event of the death of the policyholder, the beneficiary will receive the following: Assured Death Benefit (which is payable in lump sum) plus
Monthly pay-outs of Increased Monthly Income for the balance of the policy term, subject to a minimum of five years.
Maturity Benefit
Kotak Income protection plan is a pure death risk plan and the premium paid towards it is completely invested in providing the life risk. This is the basic reason that it does not offer any maturity benefit if the policyholder survives the plan term.
Rider Benefit
Optional Rider - Kotak Accidental Disability Guardian Benefit Rider
In case of an accident of the policyholder resulting in total and permanent disability, this rider benefit will be activated. All the future premium payable will be waived off and the policy will stay in force with its base benefits.
Tax Benefit
The premium payable for this plan is subject to tax benefit as per the conditions mentioned under Section 80C of the Income-tax Act, 1961. The amount paid on death is also tax free in the hands of the nominee under Section 10(10D) of the Income Tax Act, 1961. Please do note the tax laws are subject to change from time to time and it is recommended to speak to a tax consultant on the present applicable laws. GST will be levied as applicable as per the present applicable tax laws.
| Age of entry | Minimum 18 years | Maximum 60 years |
|---|---|---|
| Maximum age at maturity | 70 years | 70 years |
| Premium paying term | Regular and limited pay of 12 years | 15 years |
| Premium paying term | Monthly, quarterly, half yearly | Yearly |
| Particular | Minimum | Maximum |
|---|---|---|
| Monthly Income Level | INR 20,000 | No limit* |
| Premium Payable | It is totally dependent on Monthly Income Chosen, Age and gender of the applicant, life style habits, Policy Term and the Premium Payment Option chosen | No limit* |
| Policy term | 10 to 30 years for regular pay | |
| 17 to 30 years for 12 year pay term | ||
| 20 to 30 years for 15 year pay term | ||
| Rider option | Yes | |
| Preferential rates for females and non-smokers | Yes | |
| Premium paying term | Annually , Half yearly, Quarterly and Monthly | |
| Premium modal factor | Annually | 100% |
| Half yearly | 51% | |
| quarterly | 26% | |
| quarterly | 9.80% | |
List of documents which are required to buy Kotak Income Protection Plan:
The list of documents required for purchasing the Kotak Income Protection Plan is as follows -
If the applicant is purchasing the policy online, they may have the option to upload the attested copy of the above mentioned documents.
Grace Period:
If the policyholder defaults in paying the premium, then a grace period of 30 days is given to pay the premium. If the policyholder chooses monthly payment mode, then a grace period of 15 days is given. During the grace period, the policy will function as normal and any claim raised during the grace period will be accepted by the company as per the terms and conditions. If the policyholder does not pay the premium due in grace period, then the policy will lapse and the protection offered in the policy will cease.
Revival
A Lapsed or reduced Paid-Up policy can be revived within a period of two years of the first premium due upon payment of the outstanding premiums with late payment charges, which is presently at 9% p.a. of outstanding premiums. The revival of the policy is further subjected to conditions specified by the Company from time to time. If a Lapsed policy is not revived within the revival period, the policy will be terminated without paying any benefits. Also, if a reduced paid-Up policy is not revived within the revival period, it will continue in that mode till the end of the policy term. Revival will be based on underwriting and satisfaction of the Company.
Free Look Period:
The policyholder is offered 15 days free look period for policies sold through all Channels, other than distance marketing channel, which has a 30 days free look period from the date of receipt of the policy. The policyholder may choose to return the policy stating the reasons for cancelation within the free look period if he/she is not agreeable with any of the terms and conditions of the policy. Subsequent to return of the policy, the policyholder shall be entitled to refund of the premium paid after adjustment for expenses on medical examination, stamp duty and proportionate risk premium for the period of cover. A policy once returned cannot be revived, reinstated or restored at any point of time and a new proposal will have to be made, if the policyholder wants to reapply for the same policy.
Surrender:
No Surrender Value is applicable for regular premium term. In Limited premium term, the policy will obtain a Guaranteed Surrender Value (GSV) after payment of full premiums for three successive policy years. Guaranteed Surrender Value will be calculated as per calculation mentioned below:
60% x (Total premiums paid to date) x (Policy Term- PPT)/Policy Term x (Outstanding Policy Term/Policy Term).
Nomination:
The policyholder can put the name of the nomination in the policy as per the provisions of Section 39 of the Insurance Act, 1938 as revised from time to time.
Assignment:
The assignment will be allowed as per the provisions of Section 38 of the Insurance Act, 1938 as amended from time to time in the plan.
Policy Alteration:
The plan does not allow any alterations pertaining to Monthly Income, Premium, Policy Term or Premium Payment Term (PPT).
If in the case the policyholder commits suicide within one year of the date of commencement of the policy, 80% of the premiums paid will be payable to the nominee, provided the policy is still in force. In the event of suicide after one year from the date of start of the policy, the following will be applicable:
In case of suicide within one year of the date of revival of the policy when the revival is done within 6 months from the date of first unpaid premium, Suicide Exclusion will not get applicable and the Death Benefit under the plan will be payable. However, in case of suicide within 1 year of the date of revival, when the revival is done after 6 months from the date of first unpaid premium, higher of 80% of the premiums paid or Surrender Value, if any at the date of claim event shall be payable.
Kotak Income Protection plan is a pure protection plan from Kotak Life Insurance Company. The plan has been designed to ensure the dependent family members continue to receive monthly income to sustain the current lifestyle, in case of the death of the breadwinner of the family aka the policyholder. The income protection plan has been cleverly designed to ensure it beats the inflation by increasing at the rate of 6% every year compounding for the remainder duration of the policy. The minimum monthly income level has been kept at a decent amount of INR 20,000 and there is no limit for maximum.
This ensures that people of different income groups can take the benefit of enrolling in this plan. The protection in the plan can be enhanced by adding an accidental disability rider to ensure the plan does not lapse in case the policyholder loses a source of income due to an accident. If the accidental disability rider is activated, it will take care of all future premiums and the plan will continue to remain active. In an event of unfortunate death, the nominee gets equal to 12 times of increased monthly income as assured lump sum benefit and the monthly income starts in the plan for the remainder of the policy term, subject to a minimum of 5 years which ensures comprehensive financial protection for the family members.
The plan also rewards female lives and non-smokers with low premium rates. Apart from offering all the financial protection to the family members, the policyholder can also claim tax benefits on the premium payments. Kotak Income Protection Plan is a complete protection plan which is designed very well to take care of the financial requirements of the family members in case of an eventuality. Kotak Life Insurance has one of the best claim settlement ratios in the industry and this income protection plan will serve as a good option for anyone looking to secure the financial future of their family.
Does an applicant who is non-smoker get a favourable premium rate for this plan?
Yes, the life insurance company rewards applicants who are non-smokers with a low premium rate than applicants who smoke. This does not mean that smokers can’t apply for this plan. The only thing to note is to make a correct and honest declaration in the applicant so avoid claim rejections or complications later.
Is there an option to enhance the protection in the plan with a rider?
Yes, the Kotak Income Protection plan offers an Accident disability benefit rider which can be purchased for an extra premium. If the policyholder gets disabled due to an accident, all future premiums in the plan are waived off, but the policy continues to be in force.
What are the different policy terms offered in the Kotak Income Protection plan?
The policy term offered in the Kotak Income Protection plan for regular pay is 10 to 30 years. The policy term for 12 pay term options is 17 to 30 years and for 15 pay term option is 20 to 30 years.
What is the minimum monthly income level offered in the Kotak Income protection plan?
The minimum monthly income level offered in the Kotak Income protection plan is INR 20,000. There is no maximum limit and is subject to underwriting of the policy.
Can I convert this plan to a reduced paid-up plan?
Yes, there is an option to convert this plan to reduced paid-up policy after it attains a surrender value under the limited premium payment mode.
Can I surrender the Kotak Income Protection Plan policy?
Yes, the policyholder can surrender the policy if he/she has chosen the limited premium payment option at the time of buying the policy.
Is the claim settlement of the Kotak Life Insurance Company good?
Kotak Life Insurance enjoys a healthy claim settlement ratio of 93.72% as of 2017-18. This shows the claim settlement process is customer friendly and simple to understand. Having a healthy claim settlement also ensures that if the claim is as per the terms and conditions of the policy, it is likely to settle successfully and quickly as per the time frame. Hence, the policyholder can be at peace that the claim will be settled and the family members will be financially secure in case of an eventuality.
