Kotak Preferred e- Term Plan

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Kotak Preferred e-Term Plan – Overview

Kotak Preferred e-Term Plan is an online, pure term life insurance plan that provides a high level of protection at an economical price. It helps protect the family against the uncertainties of life in the absence of the life insured. The plan secures the future of the loved ones so that they can meet their financial obligations and lead a happy life. It can be directly purchased from the website of the insurance company without any intervention of an insurance agent. A unique feature of this term plan is the inbuilt waiver of future premiums in case of total and permanent disability of the policyholder. This ensures that the family does not come under additional financial stress in such testing times. 

Kotak Preferred e-Term - Key Features

  • Term Insurance Plan: This is the purest form of insurance where a life insurance cover offers financial protection to the family of the policyholder. The nominee receives the policy benefit (Death Benefit) on the demise of the life insured.
  • Online Plan: The plan can be bought in a quick and convenient manner, directly from the website of the insurance company. This also means that one does not have to pay any additional commission as the purchase process does not involve an insurance agent. The e-advisor of Kotak Mahindra Old Mutual Life Insurance Limited – KK, provides assistance throughout the online experience.
  • 2 Plan Options:The plan offers the following customised payout options:
    • Immediate Payout: The full Sum Assured is paid to the nominee in a lump sum, immediately after the death of the life insured
    • Recurring Payout: This option provides a regular income to the family post the demise of the life insured. The nominee receives 10% of the Sum Assured on the death of the life insured as a lump sum amount. The balance is subsequently paid in monthly or yearly payouts for a period of 15 years. Recurring payout option also allows the beneficiary to receive a lump sum benefit instead of regular monthly or yearly payouts anytime after the death of the life insured. In such a case, the discounted value of the outstanding regular payouts is paid as lump sum.
  • Large Cover at Low Cost: The plan provides a high level of protection at a nominal cost. The minimum cover amount (Sum Assured) is Rs. 25 lakh and there is no upper limit. The insurance premiums are affordable.
  • Preferential Rates: The plan offers a preferential rate of insurance premium to female lives and non-tobacco users. In effect, these 2 categories of policyholders pay a lower premium for the basic Sum Assured. This encourages women to buy a term life insurance policy and people to lead a healthy lifestyle.
  • Waiver of Future Premiums on Total and Permanent Disability: If the life insured becomes totally and permanently disabled during the premium payment term, all his/ her future basic premiums are waived off and the policy continues unhindered. This is offered as a standard feature in the plan.
  • Rider:The plan offers additional protection by way of an optional rider. This can be opted for by paying a nominal extra premium.
    • Kotak e-Accidental Death Benefit Rider: This pays a lump sum benefit if the death of the life insured occurs due to an accidental in addition to the Death Benefit under the base plan 

Kotak Preferred e-Term - Benefits

  • Death Benefit: In the event of the passing away of the life insured during the policy term, the Death Benefit is paid to the nominee. 

The Death Benefit for regular and limited premium paying policies is higher of the following:

  • Basic Sum Assured
  • 10 times the Annualised Premium, excluding modal factors and extra premiums (if any)
  • 105% of all the premiums paid till the date of death, excluding extra premiums (if any) 

If the death of the life insured occurs during the grace period, the Death Benefit is paid after deducting any due unpaid premiums. Where the mode of premium payment is monthly, the outstanding premium instalments for the remainder of the policy year of death are deducted from the Death Benefit. 

The Death Benefit for single premium paying policies is higher of the following:

  • Basic Sum Assured
  • 1.25 times the Single Premium, excluding extra premiums (if any)
  • Maturity Benefit: Since this is a term insurance plan, there is no Maturity Benefit
  • Tax Benefits: Tax benefits are available under Section 80C and Section 10(10D) of the Income Tax Act, 1961 

Kotak Preferred e-Term - Product Specifications 

 

Minimum

Maximum

Entry Age (last birthday)

18 years

65 years

Maturity Age (last birthday)

28 years

75 years

Policy Term

10 years

40 years

Basic Sum Assured

Rs. 25 lakh

No limit (subject to underwriting)

Premium Payment Option

Regular, Limited and Single Pay

Premium Payment Term

  • Regular Pay: Equal to the policy term
  • Limited Pay:
    • 5 Pay: For a policy term of 10 to 40 years
    • 10 Pay: For a policy term of 15 to 40 years
    • Single Pay: Single payment

Premium Payment Mode

Yearly and Monthly

Premium Modal Factor

The following modal loadings are used to calculate the instalment premium:

  • Yearly: 100%
  • Monthly: 8.8%

Premium Amount

Determined on the basis of chosen premium payment option and chosen plan option i.e. recurring or immediate payout, basic Sum Assured, age, gender, smoking status and policy term

No limit (subject to underwriting)

 

Details About Premium

Details of premium for 30 year old male. Non- tobacco user

Age (Yrs)

Policy Term (Yrs)

Premium Payment Term (Yrs)

Sum assured (Rs.)

Premium amount for Immediate Payout (Rs.)

Premium amount for Recurring Payout (Rs.)

30

10

10

2500000

3164

2537

30

10

5

2500000

5045

4019

30

10

Single Premium

2500000

23171

18297

For Recurring Payout - 250000 paid as lumpsum benefit at the time of claim settlement and Rs. 150000 will be paid annually or Rs. 12330 will be paid monthly for the next 15 years dependin on the option chosen at the time of claim settlement.

Details of premium for 30 year old female. Non- tobacco user

Age (Yrs)

Policy Term (Yrs)

Premium Payment Term (Yrs)

Sum assured (Rs.)

Premium amount for Immediate Payout (Rs.)

Premium amount for Recurring Payout (Rs.)

30

10

10

2500000

2907

2309

30

10

5

2500000

4589

3648

30

10

Single Premium

2500000

20862

16331

For Recurring Payout - 250000 paid as lumpsum benefit at the time of claim settlement and Rs. 150000 will be paid annually or Rs. 12330 will be paid monthly for the next 15 years dependin on the option chosen at the time of claim settlement.

 

Kotak Preferred e-Term - Policy Details

Grace Period: There is a limited timeframe of 30 days from the due date of the unpaid premium to pay all dues for yearly and monthly modes.

Policy Termination or Surrender Benefit: There is no Surrender Value for policies that are under Regular payment mode. For the Limited payment mode, the policy may be surrendered after payment of 2/3 years of full policy premium payment. The Surrender Value is immediately available after the receipt of the Single Premium. If the policy is not reinstated within the revival period, the policy is terminated. Termination of the policy also occurs on payment of the Death Benefit.

Free Look Period: Policyholders have a limited free look period of thirty 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 a refund of the premium paid 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

  • For Limited premium payment modes if for a PPT of ten years if premiums for the first two policy years are not paid within the Grace Period, the policy will lapse. While for a PPT of more than ten years modes if premiums for the first three policy years are not paid within the Grace Period, the policy will lapse.

Additional Features or Riders

  • If the Life Insured wishes to have their premiums waived in the case of total and permanent disability, they have to be examined by a medical examiner sent by the company.  Furthermore, the company has to be informed of the total and permanent disability of the Life Insured within 150 days of the occurrence of the disability, giving sufficient evidence and details of the same.
  • The revival of a lapsed 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.
  • The policyholder has the option to decrease the Sum Assured if the need for protection decreases.
  • The policy acquires Reduced Paid-up Value if subsequent premiums are not paid within the Grace Period after the policy acquires Surrender Value. Paid-up Value is not applicable on Regular payment policies as they do no acquire Surrender Value.

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 or reinstatement. The company will refund 80% of the premiums paid until the date of death, to the nominee. In case the Life Insured commits suicide within a year of Minor Revival, the nominee will receive the Death Benefit. If the Life Insured commits suicide within a year of Major Revival, the nominee will receive the higher of 80% of the premiums paid or Surrender Value.
  • The Total and Permanent Disability is not applicable if the disability was caused directly or indirectly by alcohol or drug abuse, failure to seek or follow medical advice, engaging in racing of any kind excluding athletics and swimming, any kind of war or riots, nuclear contamination, participation in hazardous pastimes, any mental or functional disorder, attempted suicide or self injury, etc.

Documents Required

The policyholder has to fill up an online ‘Application form’ with photo identity proof (Passport, PAN Card or Driving License) and income proof in the form of a copy of the latest ITR or Form 16 or copies of the last three months salary slips.

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