Kotak Life Insurance Annuity Plan

What is a Kotak Life Insurance Annuity Plan?

A Kotak Life Insurance Annuity Plan is a financial instrument that will turn a lump sum into a guaranteed regular income that is guaranteed. It is either payable on an immediate basis or after a deferral. As an illustration, the Kotak Assured Pension annuity plan guarantees a continuous stream of income throughout life or upon deferral.

As an investor, you can choose to invest through either:

1. A lump-sum payment (for an immediate annuity income)
2. A deferred arrangement available only in the Assured Pension plan, where income begins after a specified deferment period of 1 to 10 years.

Types of Kotak Life Insurance Annuity Plans

Kotak Life Insurance in India has various annuity plans to provide people with lifetime financial security and consistent income at retirement. These plans offer flexible payouts and meet personal and group requirements, and offer two types of annuity plans with their unique features and eligibility requirements:

1. Kotak Assured Pension: It is a non-linked, non-participating general annuity that is used to ensure a steady flow of income at the time of retirement or upon a deferral arrangement. It offers 8 immediate and 2 deferred variants. It has monthly, quarterly, half-yearly, or annual modes of payment. It may be 1 to 10 years, depending on the payment option (single, limited, or regular).
   
   
2. Kotak Lifetime Income Plan: This is a non-linked, non-participating, one-premium immediate annuity plan that commences payment as soon as it is purchased. It has 6 types of annuity like Lifetime Income, Lifetime Income with Cash-back, and Joint Life with 50% or 100% continuation choices. It has payout frequencies monthly, quarterly, half-yearly or annually and no deferment period.

Kotak Assured Pension

Kotak Assured Pension is a non-participating, non-linked general annuity plan that provides a guaranteed stream of income throughout your lifetime. It offers immediate and deferred annuity options with annuity rates guaranteed for the lifetime of the annuitant and up to 10 annuity choices. Policyholders can select a deferment period between 1 to 10 years and enjoy higher annuity rates for higher premium bands.

1. Key Features of Kotak Assured Pension

   Parameter	Details
   Plan Type	Individual, Non-Participating, Non-Linked, General Annuity Plan
   Annuity Type	Immediate and Deferred Annuity Options
   Number of Annuity Options	8 (Immediate) + 2 (Deferred)
   Entry Age (Last Birthday)	Existing Kotak Life policyholders: Minimum 18 years New customers: Minimum 40 years QROPS customers: Minimum 55 years Maximum age: 85 years (Immediate options), 80 years for Option 6b, and 70 years for Deferred options
   Deferment Period	1 – 10 years (Single Pay) / 5 – 10 years (Regular or Limited Pay)
   Premium Payment Options	Single Pay, Limited Pay (5–9 years), Regular Pay (5–10 years)
   Premium Frequency	Yearly, Half-Yearly, Quarterly, Monthly
   Minimum Annuity Amount	Monthly: ₹1,000; Quarterly: ₹3,000; Half-Yearly: ₹6,000; Yearly: ₹12,000
   Corpus Source	NPS Proceeds, KLI Pension Plan, or Superannuation Funds
   Policy Term	Lifetime

2. Sample Illustration – Kotak Assured Pension

   The following examples illustrate indicative annual annuity payouts based on a ₹10 lakh Total Premium (exclusive of GST and cess) for a 45-year-old annuitant under different options:

   Annuity Option	Description	Annual Annuity	Additional Benefits
   Option 1 - Lifetime Income	Lifetime payout till the death of the annuitant.	₹65,600	Ceases on the death of the annuitant.
   Option 2 - Lifetime Income with Term Guarantee (10 Years)	An annuity payable for at least 10 years, even if the annuitant passes away during this period.	₹63,800	Nominees receive a payout till the end of the guaranteed term.
   Option 3 - Lifetime Income with Annual Increase (5%)	The lifetime payout increases by 5% annually (simple interest).	₹38,400 (Year 1)	Increase continues throughout the lifetime of the annuitant; no cash-back benefit attached.
   Option 4 - Lifetime Income with Balance Cash-Back	Lifetime payout; nominee gets the remaining premium balance after death.	₹64,600	Death benefit = Premium paid minus annuity already received.
   Option 5 - Lifetime Income with Cash-Back in Parts	Lifetime annuity plus partial lump-sum returns.	₹47,300	₹3,00,000 paid at the end of the 7th policy year; nominee gets ₹7,00,000 on death after 15 years.
   Option 6a - Lifetime Income with Cash-Back on Death	Lifetime payout; nominee receives full premium on death.	₹59,500	₹10,00,000 returned to the nominee after death.
   Option 6b - Lifetime Income with Cash-Back on Death or Critical Illness	Lifetime payout; premium returned on death or diagnosis of listed critical illness.	₹59,000	Applicable only for the specified critical illnesses as listed in the plan brochure.
   Option 7 - Deferred Income with Cash-Back (Single Pay)	Payout begins post 10-year deferment; lifetime annuity thereafter.	₹1,05,000	₹11,00,000 paid to the nominee on death after 20 years.
   Option 8a - Joint Life: 100% to Spouse	Full annuity continues to the spouse after the primary annuitant’s death.	₹59,200	Continues for the secondary annuitant’s lifetime.
   Option 8b - Joint Life: 50% to Spouse	Half annuity continues to the spouse after the primary annuitant’s death.	₹61,500	50% continues till the secondary annuitant’s death.
   Option 9a - Joint Life: 100% to Spouse + Cash-Back	100% annuity continues to the spouse; the premium is refunded after both pass away.	₹58,700	₹10,00,000 paid to the nominee after both deaths.
   Option 9b - Joint Life: 50% to Spouse + Cash-Back	50% annuity continues to spouse; premium refunded after both pass away.	₹60,800	₹10,00,000 paid to the nominee on the death of the surviving annuitant.
   Option 10a - Deferred Income 100% to Spouse + Cash-Back	10-year deferment; 100% annuity to spouse; refund after both pass away.	₹96,600	₹10,00,000 refunded to the nominee on the final death.
   Option 10b - Deferred Income 50% to Spouse + Cash-Back	10-year deferment; 50% annuity to spouse; refund on both deaths.	₹1,03,400	₹10,00,000 refunded to the nominee after both deaths.

   Note: The figures provided are for illustration purposes only and are based on indicative annuity rates. Actual payouts will depend on prevailing rates at the time of purchase, selected option, and individual underwriting.

Kotak Lifetime Income Plan

The Kotak Lifetime Income Plan is a non-linked, non-participating, Immediate Annuity Plan that provides a regular stream of income throughout life in exchange for a single premium payment. Annuity payouts start immediately as per the frequency chosen (monthly, quarterly, half-yearly, or yearly). No deferment period applies. It is designed for individuals or groups seeking instant, guaranteed lifelong income rather than deferred retirement income.

1. Key Features of a Kotak Lifetime Income Plan

   Parameter	Details
   Plan Type	Individual and Group, non-linked, non-participating immediate annuity
   Annuity Options	6 options:  Lifetime Income  Lifetime Income with Cash-back  Lifetime Income with Term Guarantee (available for 5, 10, 15, or 20 years as chosen by the annuitant) Last Survivor Lifetime Income with a 100% annuity to the surviving spouse  Last Survivor Lifetime Income with a 50% annuity to the surviving spouse  Last Survivor Lifetime Income with 100% annuity + Cash-back on death of surviving spouse
   Entry Age (Last Birthday)	• Minimum 18 years (existing Kotak pension-plan customers) • Minimum 35 years (group customers) • Minimum 40 years (new individual customers) • Maximum age up to 99 years, depending on the option chosen (as per brochure).
   Minimum Annuity Amount	Monthly: ₹1,000 Quarterly: ₹3,000 Half-Yearly: ₹6,000 Yearly: ₹12,000
   Payment Frequency	Monthly, Quarterly, Half-Yearly, Yearly
   Premium	Single Premium only. The minimum amount should ensure ₹1,000 monthly annuity for new customers, with broader eligibility for existing Kotak Pension or Superannuation members.
   Annuity Rate Guarantee	Once issued, annuity rates remain guaranteed for the annuitant’s entire lifetime, unaffected by market conditions.

2. Sample Illustration - Kotak Lifetime Income Plan (Monthly Payout)

   This plan offers a guaranteed lifetime income in exchange for a one-time lump-sum premium, with premium amounts qualifying for enhanced annuity rates as per defined premium bands.

   Premium Band	Purchase Price (₹)	Applicable Annuity Rate	Illustrative Monthly Annuity	Remarks
   Band 1	Less than ₹2,50,000	Base Annuity Rate (100%)	₹1,000	Standard base rate applicable for smaller corpus amounts.
   Band 2	₹2,50,000 – < ₹5,00,000	100.63% of Base Rate	₹1,006	Slightly higher rates offer improved monthly income.
   Band 3	₹5,00,000 – < ₹10,00,000	101.88% of Base Rate	₹1,019	Mid-range premium earns a moderate annuity increase.
   Band 4	₹10,00,000 – < ₹50,00,000	102.50% of Base Rate	₹1,025	A larger corpus yields higher annuity benefits.
   Band 5	₹50,00,000 & above	103% of Base Rate	₹1,030	The highest premium band earns the top annuity rate advantage.

   *The values shown are for illustration purposes only and do not represent actual Kotak Life annuity quotes. The Base Annuity Rate applies to Band 1, and higher premium bands receive proportionately higher rates. Base Annuity Rate refers to the rate applicable for Band 1. Higher bands receive proportionate increases. 

Key Takeaways

Kotak Life Insurance Annuity Plans offer protection against market risks and a guaranteed lifelong income. Kotak Assured Pension is available in immediate and deferred options with a maximum of ten variants, flexible premium mode and guaranteed life-long rates of annuity. On the other hand, Kotak Lifetime Income Plan is a one-premium, immediate annuity plan that has six choices and no deferral. It has a band-based annuity rate regime, which rewards greater levels of purchase with better rates, up to 103%. Both plans provide stable and predictable retirement income, to enable individuals to secure their long-term finances and have predictable retirement income.