Kotak Headstart Child Assure Plan

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Kotak Headstart Child Assure - Overview

Kotak Headstart Child Assure is a unit-linked life insurance plan. This popular child plan is designed for the benefit of the child where the parent is the life insured. It offers dual benefits of protection and wealth creation. The plan helps in systematic investment to build a corpus for the child’s future. It helps the child realise his/ her dreams even in a scenario where the parent is not alive. The child plan offers financial security to the child through ‘triple benefit’ in the event of the death of the life insured parent. 

Kotak Headstart Child Assure - Key Features

  • Protection and Investment in One Plan: This unit-linked insurance plan offers the unique combination of protection through a life insurance cover and wealth creation through investment in funds in a single product
  • Triple Benefit:A triple benefit ensures the financial security of the child when the life insured parent dies during the policy term. It reduces the financial burden on the family including the child. The triple benefit consists of the following:
    • Immediate payment of the Basic Sum Assured
    • Premium Waiver – all future premiums are waived off and added to the Fund Value
    • Continuation of policy and payment of the Fund Value at policy maturity
  • Wealth Creation for Child's Future Needs: This plan assists in the creation of wealth through investment in funds for a time when the child comes of age. It helps in making funds available for the child’s higher education, marriage etc. and ensures that the child is able to realise his/ her dreams.
  • Choice of 7 Investment Funds:The plan offers 7 funds to suit the risk taking capacity of all kinds of investors. Investment in these funds helps in building a corpus for the future. Each fund has a unique investment objective and risk-return profile based on the allocation in equities, debt and money market instruments. Funds with an aggressive profile have a high equity exposure, while those with a secure or conservative profile invest in debt and have zero exposure to equities.
    • Classic Opportunities Fund
    • Frontline Equity Fund
    • Balanced Fund
    • Dynamic Bond Fund
    • Dynamic Floating Rate Fund
    • Dynamic Gilt Fund
    • Money Market Fund
  • Flexible Withdrawals: Since the financial requirements of the child change from time to time, this plan allows access to funds after completion of 5 policy years by way of partial withdrawals
  • Flexible Premium Payment Period: The plan allows payment of insurance premium for the entire policy term (Regular Pay) or for a limited period (Limited Pay)
  • Switching: The plan allows switching between investment funds to adjust investments according to the prevailing market conditions
  • Premium Redirection: The future premium allocation can be altered based on the needs and investment objectives of the policyholder 

Kotak Headstart Child Assure - Benefits

  • Death Benefit: In the event of the passing away of the life insured during the tenure of the plan, provided all premiums have been paid, the Death Benefit is paid to the nominee. 

Death Benefit is higher of the following:

  • Basic Sum Assured
  • 105% of the total premiums paid 

The future premiums are waived off and added to the Fund Value. The policy continues and the Fund Value is paid at maturity.

  • Maturity Benefit: The full Fund Value is paid as Maturity Benefit on policy maturity
  • Tax Benefits: Tax benefits can be availed under Section 80C and Section 10(10D) of the Income Tax Act, 1961 

Kotak Headstart Child Assure - Product Specifications 

 

Minimum

Maximum

Entry Age (last birthday)

18 years

60 years

Maturity Age (last birthday)

28 years

70 years

Policy Term

-10 years, 15 to 25 years 

The minimum policy term is greater of:

-10 years
-18 years minus age on last birthday of the beneficiary, on the date of commencement

To ensure that the policy matures when the beneficiary has attained the age of majority. Where 18 minus age on last birthday on the date of commencement lies between two available policy terms, the next higher policy term is offered.

Basic Sum Assured

If the entry age is less than 45 years, the minimum Basic Sum Assured is higher of:

         -10 x Annual Premium
         -0.5 x Policy Term x Annual Premium 

If the entry age is 45 years or above, the minimum Basic Sum Assured is higher of:

       -7 x Annual Premium
       -0.25 x Policy Term x Annual Premium

25 x Annual Premium

Premium Payment Term

      Regular: Equal to the policy term
      Limited:

                -5 years for a 10 year policy term
                -10 years for a policy term of 15 to 25 years

Premium Payment Mode

      Annual and Semi-Annual

Premium Amount

      Regular Premium: Rs. 20,000 per annum
      Limited Premium:

                    -For a 5 year premium payment term: Rs. 50,000 per annum
                    -For a 10 year premium payment term: Rs. 20,000 per annum

-

 

Details About Premium

Benefit illustration @8%

Age (Yrs)

Policy Term (Yrs)

Annual Premium (Rs.)

Premium Allocation Charge (Rs.)

Mortality Charges (Rs.)

Policy Admin Charge (Rs.)

Fund Management Charge (Rs.)

Fund at the end (Rs.)

Surrender Value (Rs.)

Death Benefit (Rs.)

30

1

80000

4800

1457

2400

805

74954

70457

1194954

31

2

80000

2400

1353

2400

1672

157960

154760

1197960

32

3

80000

2400

1275

2400

2598

246606

244206

1206606

33

4

80000

2400

1205

2400

3586

341259

339659

1221259

34

5

80000

2400

1140

2400

4642

442315

442315

1242315

35

6

0

0

1197

2400

4907

467630

467630

1267630

36

7

0

0

1265

2400

5189

494556

494556

1294556

37

8

0

0

1345

2400

5489

523188

523188

1323188

38

9

0

0

1437

2400

5807

553625

553625

1353625

39

10

0

0

1541

2400

6146

585973

 

 

 

Kotak Headstart Child Assure - Policy Details

Grace Period: The policy gives policyholders thirty days to pay all due premiums. This timeframe is reduced to 15 days in case of premiums being paid via monthly mode. The policy will acquire a “Discontinued” status if payment is not made within the applicable timeframe.

Policy Termination or Surrender Benefit: If the policy is surrendered before the completion of 5 years, then the insurance cover ceases, and the Fund Value will be transferred to the Discontinued Policy Fund. Proceeds from this will be payable only after the fifth policy anniversary. In case of the death of the Life Assured during this period, only the accumulated fund value will be payable to the nominee. After completing five policy years, if it is surrendered, then there is no Surrender/Discontinuance Charges, the Fund Value is paid to the policyholder, and the policy will terminate immediately. If the policy is not reinstated within the revival period, the policy is terminated. Termination of the policy also occurs on payment of the Maturity benefit or the Death Benefit.

Free Look Period: Policyholders have a limited free look period of 15 days from the date of receiving policy documents to review the policy. If the policyholder does not wish to continue with the policy, then he or she can cancel the policy. The customer will receive the Fund Value plus the unallocated premium minus a proportionate premium for the risk borne by the company, including as any extra expenses, such as towards a medical examination or stamp duty charges.

Inclusions

  • The policyholder may switch between the seven unit-linked funds at any point of time during the policy term.
  • Policyholders may opt to change the allocation of future premiums with the Premium Redirection facility.
  • The policyholder can choose to receive the maturity benefit as an immediate lump-sum payout or through pre-selected installments via yearly, half-yearly or quarterly modes for a period of up to five years after the maturity date. The policyholder may also receive the maturity benefit as a part lump-sum amount and the rest via installments.

Additional Features or Riders

  • The revival of a lapsed or discontinued policy is possible if the policyholder submits a request for reinstatement within a timeframe of two years from the date of the first unpaid premium and pays all due premium.
  • Various charges apply to this policy. They are as follows:
  1. Premium Allocation Charge, which is deducted from the Premium paid by the customer. The balance is invested in the investments chosen by the policyholder
  2. Policy Administration Charge is deducted at the start of each month.
  3. Fund Management Charges are deducted daily while calculating the NAV of the funds.
  4. At the beginning of each month, Mortality Charges are deducted by the cancellation of units from the fund value.
  5. Switching Charge – There is a limit of four free switches allowed in a single policy year. Subsequently each switch is charged at Rs. 500 per switch.
  6. Partial Withdrawal Charge is Rs.500 per withdrawal.
  7. Miscellaneous Charges – for policy alteration and alteration in Basic Sum Assured Rs. 500 is charged, while Rs. 100 is charged for premium redirection.
  8. A Discountenance Charge is levied on policies that are discontinued before the end of the lock-in period of the first five years.

Exclusions

  • The term insurance cover is void if the person insured, whether sane or insane at the time, commits suicide within one year from the start of the policy cover. The company will refund the Fund Value as on the date of death. If the person insured commits suicide within one year of policy reinstatement when the revival has been done within six months from the date of discontinuance the Death Benefit is paid to the nominee. . If the person insured commits suicide within one year of policy reinstatement when the revival has been done after six months from the date of discontinuance, the Fund Value is paid to the nominee

Documents Required

The policyholder has to fill up an ‘Application form ’with identity proof, bank account proof, address proof and a recent photograph. Select cases may require income proof and medical examination.

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