KOTAK LIFE INSURANCE

Employee Benefits

There is a new way of looking at the people in your organisation...
Through "Employee Benefits" from Kotak Life Insurance.
Some little known facts..

In today’s fast changing environment, the average life expectancy is increasing with the advent of modern medicine and technology. In 1945 it stood at 45 years, in 2002 it was 66 years and is expected to be 79 years in 2022. Retired life span is nearly competing with work life span! For an average employee current work life span is 58 years, future would see it reducing to 50 years i.e. we will have a work life span of about 25 years and a retired life span of 25 years too based on a life expectancy of atleast 75 years!! Day-to-day living costs are increasing at a drastic pace too.

The costs of medical treatment too are on an upward scale. An angioplasty treatment that was available for Rs. 1 Lakh in 1991, went upto Rs. 3.5 lakhs in 2002 and will be an astounding Rs. 10 lakhs in 2010!

Today, your employees are looking beyond immediate benefits like salary and bonuses, to benefits that they value. Therefore, a need to plan in a systematic long term manner for the future.

Group Life Insurance is one solution which can offer a range of products that facilitate risk mitigation and long term build up of capital.
The emerging Key financial needs can be broadly categorized into:
- Safe Guarding against outstanding liabilities
- Retirement Planning
- Health Care
- Wealth Creation

Our comprehensive range of Group products provide you with an efficient means for attracting, retaining and most importantly motivating your most valuable resource - your employees by giving them an important source of personal and financial stability.

The "Employee Benefits" from Kotak Life Insurance namely:

  • Kotal Term Grouplan
  • Kotak Credit-Term Grouplan
  • Kotak Complete Cover Grouplan
  • Kotak Gratuity Grouplan
  • Kotak Superannuation Grouplan

Take care of all the key financial needs of your employees.

Thus, all this translates into one simple fact.
Happy employees.


Kotak Term Grouplan

In today’s market scenario, it’s becoming tougher to retain employees. To keep your employees satisfied and secure, there is a growing need to provide them with improved benefits. Benefits that translate to long term value additions for your employees.
The Kotak Term Grouplan is a good way to show your employees you care. Not only does it provide a life cover for your employees, it also takes care of their family’s needs and protects them against life’s uncertainties.

What does the Kotak Term Grouplan offer?"
The plan provides life cover for a group of employees*, by paying a lump sum benefit to the beneficiary on the death of an employee. The plan is offered on a yearly renewable basis and is non-participating. It is secured via a single policy on the lives of all the employees of the Group.


"What are the advantages of the plan?"
This plan offers benefits to both the Employer and the Employees.

Employer

  • Attract and retain employees
  • Provide welfare benefits to the employees and their families
  • Obtain exemption from the statutory liability of EDLI ***
  • Simple administration procedures
  • Plan can be tailored to suit requirements
  • Value-adds at nominal cost
  • Tax benefits

Employees

  • Insurance protection at a relatively low cost
  • No medical required in most cases
  • Cover is available 24 hours a day, 7 days a week, anywhere in the world
  • Lump sum nature of benefit (payable in Indian Rupees only) allows flexibility in use by the beneficiary
  • Tax benefits

"What are the eligibility requirements?"
This plan offers cover on a compulsory basis to all active, permanent employees of the participating group, subject to the following age limits.

  • Minimum age at entry will be 18 years.
  • The standard maximum entry age will be 1 year less than the normal retirement date, subject to a maximum of 64 years.
  • No employee will be covered above age 65 or normal retirement date, whichever is earlier.

"What happens in the event of death of an employee?"
In the event of death of an insured employee during the term of the plan, the beneficiary will receive the sum assured.

"What is the minimum and maximum cover?"
The minimum cover shall be
One time annual salary, in case cover amount is a multiple of salary
Rs. 20,000, in case it is a flat cover amount

The maximum cover shall be
five times annual salary for an employee.*

*For Groups other than employees, kindly contact us.


Kotak Credit-Term Grouplan

"What does the Kotak Credit-Term Grouplan offer?"
The Plan provides life cover for a group of borrowers* with the same credit institution (banks, retail finance providers etc.) by paying a lump sum towards repayment of the loan amount on the death of a borrower.
The plan can be compulsory (all members join) or voluntary (subject to certain conditions).
The plan is offered on a yearly renewable basis and is non-participating.

"What are the advantages of the Plan?"

The advantages to the borrower are:

  • The estate of the borrower remains intact and the family is not required to pay the outstanding loan(s).
  • The pooling of the risk allows cover to be provided on a low cost basis.
  • No medical is required in most cases
  • The cover for the member is available twenty-four hours a day, 7 days a week, anywhere in the world, provided the member remains part of the group.

The advantages to the credit institution are:

  • It is not faced with the risk of the borrower defaulting in the event of the death.
  • Due to a lower loan default risk, the credit institution can provide more competitive rates on the loan products.
  • It may provide the credit institution with a competitive edge.
  • The cover will be secured via a single policy that will result in less administration.

"What are the eligibility requirements?"
Participation in the Kotak Credit-Term Grouplan could be compulsory or voluntary for the borrowers.
In case the plan is compulsory, we will offer cover for all existing borrowers without any evidence of health. However, new borrowers will have to provide evidence of health.
In case the plan is voluntary, all existing and new borrowers (who opt to take the plan) will have to provide evidence of health.

  • The minimum age at entry is 18 years.
  • The maximum age at entry is 64 years.
  • The maximum age at entry for new borrowers is 50 years.

"What happens in the event of death of a borrower?"
In the event of death of a borrower during the term of the plan, a lump sum payment (payable in Indian Rupees only) equal to the sum assured will be paid to the credit institution.

"What is the maximum cover that a member can avail of?"
Cover may not exceed the original value of the loan. However, the maximum cover allowed per member will vary from group to group, up to a maximum of Rs. 50,00,000.

"In what ways can the cover be expressed?"
Cover can be provided on either the original loan amount, or the outstanding value of the loan, as per data provided. The choice of cover will depend on the requirements of the credit institution, cost constraints, the type of scheme and the data that can be provided.

"How large can a group be?"
There is no maximum limit. In case the plan is compulsory, the minimum of borrowers is 1250. In case the plan is voluntary, the minimum number of borrowers is 5000, with at least 25 % of the borrowers participating in the plan.*For Groups other than lender/borrower, kindly contact us at our numbers listed on the last page.

"What is the frequency of premium payment?"
Premiums are paid annually in advance. However, we also offer the opportunity to the credit institution to make the payment monthly in advance.

"Are there any tax benefits?"
Any premium paid by a borrower in his/her capacity as an individual may be eligible for tax rebate** under section 88 of the Income Tax Act, 1961. The premium paid by the credit institution could be considered as part of the business expenses and may be tax deductible.
** Please consult your tax advisor for details


"When will the cover terminate?"
The cover will cease on the earliest of:
(a) The date on which the loan is repaid
(b) The first day of the calendar month following the attainment of the ceasing age
(c) The date of discontinuance of the policy
(d) The date on which the premiums are defaulted on



Kotak Complete Cover Grouplan

"What is the Kotak Complete Cover Grouplan?"
The Kotak Complete Cover Grouplan (KCCG) provides life insurance cover for a group of borrowers. Under this innovative plan, the credit institution is the beneficiary and premium is payable in a single lump sum at the beginning of the loan tenure. KCCG is a flexible plan that allows you to structure insurance cover in a manner that best suits you and your borrowers.

"How does KCCG work?
KCCG provides reducing term insurance cover on a fixed rate basis for a fixed term to a group of borrowers of your credit institution. The master policy is in the name of the lending institution.

"What are the advantages of the Kotak Complete Cover Grouplan for me as a lending institution?"
KCCG benefits you in multiple ways:
(1) Your risk of default due to death is reduced
(2) You can potentially lend higher amounts due the insurance cover offered under the KCCG policy
(3) KCCG can help to differentiate your product in a crowded and competitive consumer credit market

"What are the advantages of KCCG for my borrowers?"
The Kotak Complete Cover Grouplan provides numerous advantages to your borrowers:

  • The borrower’s family is relieved of the financial burden of paying the outstanding loan amount
  • The asset remains in the borrower’s family
  • Life insurance cover is available worldwide, 24 hours a day, 7 days a week anywhere in the world
  • Premium rates are on a group basis and therefore much less expensive than any individual insurance plan available in the market
  • No medical tests are required in most cases
  • Simple processing

"What is the maximum amount of cover allowed under the plan?"
The maximum cover allowed to any individual borrower under this plan is the lower of the loan outstanding amount or Rs. 10 lakhs.

"What size of group can be covered?"
The minimum group size required for KCCG is 1000. There is no restriction on maximum group size.

"Is coverage compulsory for all members of the group?"
The KCCG plan offers you flexibility in structuring the parameters of the plan. You can require all your borrowers to compulsorily take the insurance cover or you can make the insurance cover voluntary. In the case of voluntary plans, a minimum of 25% of borrowers must elect to participate in the plan.

"What is the term of the KCCG cover?"
KCCG plan can be structured to suit your needs as well as those of your borrowers. The insurance cover can be for any term between 1 year and 5 years.

"What happens in the event of a death of the borrower?"
In the event of death of a borrower, the outstanding loan amount would be paid by Kotak Life Insurance as a death benefit to your credit institution. In turn, the borrower’s family is relieved of the financial burden of paying off the outstanding loan and retains the asset.

The benefits are payable in Indian Rupees only.

"What happens if a borrower prepays his loan?"
In the event of prepayment of the loan, a portion of the single premium paid will be refunded. Further details of the premium refund formula are available upon request.

"How is the premium paid?
KCCG is a single premium policy and premium is payable once at the commencement of the policy by the credit institution. You may wish to recover the premium amount directly from your borrowers through a one-time charge, or through an addition to the monthly loan repayment. You also have the option of purchasing the insurance cover as a value addition to your credit product at no cost to your borrowers.

Kotak Gratuity Grouplan

"What does the Kotak Gratuity Grouplan offer?"

Kotak Gratuity Grouplan (KGGP) offers a comprehensive solution for employers to outsource the entire gratuity management in a cost effective and integrated manner.

The range of benefits include:

  • Choice of three investment portfolios
  • Flexibility in structuring the gratuity cost
  • Transparency of asset values of the fund (daily Net Asset Value of units) and investment performance of the fund
  • Switching facility among the different funds
  • Facility to pay the gratuity contribution in instalments
  • Assistance with legal, tax and accounting services
  • An annual actuarial valuation free of cost
  • An in-built life cover that insures your employees’ lives and provides security to their families. This benefit is compulsory to ensure the plan complies with the Insurance Act 1938. Life cover is available 24 hours a day, 7 days a week, anywhere in the world. Benefits are payable in Indian Rupees only.
  • Critical illness cover at 50% of Future Service Gratuity available at a nominal cost
  • No surrender penalty upon termination of the policy, except where financial assistance is given to initially transfer assets to KGGP
  • Annual Statement of account including actuarial valuation certificates each year
  • The KGGP is a unit-linked, non-participating plan that gives returns based on the value of the units. This allows you to know the value of your gratuity fund on a daily basis and plan for your cash flow depending upon the value of the units

"Who can opt for KGGP?"
Employers that do not have a Gratuity fund
Employers that have a Gratuity Fund managed in-house
Employers that have a Gratuity Fund managed by another Insurance Company


"How will contributions be made?"
At inception, the initial Gratuity contribution must be paid by way of a transfer of assets to KGGP, subject to Kotak Life Insurance and the employer agreeing to the valuation of assets. Fresh contributions may be made into the plan at the employer’s convenience. At the end of the year, the contribution payable will be determined on the basis of the accumulated asset value and the actuarial valuation.
The premium for life cover (compulsory) and critical illness cover (if selected) is payable annually in advance.


"How are the investments managed?"

  • The contributions received will be allocated to each fund in accordance with the trustees’ instructions at the prevailing buying prices of the units. The unit prices of each fund are based on the market value of the assets in the unit fund.
  • The trustees can switch from one fund to another. Units are sold at the prevailing selling price and reinvested at the prevailing buying price of the respective investment funds.
  • The current difference in buy/sell prices are 0.35% for Group balanced, 0.2% for Group bond and 0.1% for Group gilt fund respectively.
  • The trustees can monitor the performance of the selected funds on a daily basis on our website (www.kotaklifeinsurance.com).
  • The investments are managed based on the principles of transparency, flexibility and well-defined investment portfolios.
    There are 3 investment portfolios on offer:
    (A) Group Gilt Fund: The annual fund management charge is 1%.
    (B) Group Bond Fund: The annual fund management charge is 1.2%
    (C) Group Balanced Fund: The annual fund management charge is 1.3%.
    These charges are already reflected in the unit prices and will not be explicitly charged. The funds have been described in the Kotak Superannuation Grouplan section.

"Any other charges?"
The KGGP will handle all your administration issues at very reasonable costs

A transaction charge of Rs 100 will be levied for each switch, redemption or claim
Member record keeping at Rs. 20 per member – minimum (Rs. 15,000); maximum (Rs. 30,000)
An administration charge of up to 0.3% will be charged to offset other administration expenses. These will be charged by cancelling units from the fund.

"Are there any discounts available for large trusts?"
Yes, at the end of each financial year, Kotak Life Insurance will discount the annual fund management charge for large funds. The discount is 0.25% for amounts over Rs 2 Crore and 0.5% for amounts over 10 Crore.


"Changes in charges and Insurance Premiums"
Insurance premiums are guaranteed for one year and can be altered in line with the experience. Rupee amounts will move in line with movements in the Consumer Price Index. Asset management fees are not expected to change from those above but a guarantee is given that the total asset management fee will increase by not more than 0.75% pa of the assets.

Kotak Superannuation Grouplan

"Why do I want to consider a Group Superannuation plan for my company?"
As an executive in charge of your employee's welfare, you are buffeted by a growing number of changes in India. In today's competitive job market, employers in all industries are looking to increase employee retention and boost employee productivity. In the context of a volatile business environment, innovative employers are increasingly turning to employee benefits to help retain their most valuable assets through non-conventional means.

At the same time, life expectancy in India is growing. At a time when the prospect of out-living retirement savings is larger than ever, few employees take the time to plan their long-term financial goals or have the discipline to systematically save for their retirement years. As an employer of choice, you can help your employees tremendously by assisting in retirement planning and at the same time increase employee retention. The solution lies in the Kotak Life Insurance's Kotak Superannuation Grouplan.


"How does the Group Superannuation plan work?"
The Kotak Superannuation Grouplan (KSGP) is a uniquely flexible product that addresses the needs of both employers and employees in today's volatile business environment. Under the KSGP plan, individual employee accounts are invested in one of three investment portfolios as per each employee's choice. Upon retirement, one-third of the accumulated corpus can be commuted and the balance corpus is used to buy an annuity. Annuities can be purchased from any provider in the market.

Parameters such as eligibility criteria for fund membership, vesting guidelines, retirement age, contribution rates, transfer rules and voluntary contributions are all designed as per each employer's unique needs.


"How will KSGP help me as an employer?"
You know that your employees are you most valuable assets. By helping to provide for retirement, you help increase employee retention and motivation. Moreover:

  • Annual contributions are treated as deductible business expenses..
  • If you are establishing a superannuation plan for the first time, you are able to make contributions with respect to past service of your employees.

"How does KSGP help my employees?"
You know that your employees are your most valuable assets. By helping to provide for retirement, you help increase employee retention and motivation.
Moreover:

  • Contributions of up to 27% of salary made by the employer, including contributions to provident fund are not treated as perquisites in the hands of the employees and are tax exempt.
  • The interest that accumulates on the fund is exempt from tax
  • Benefits payable on death are exempt from tax
  • The commuted value of the fund payable on retirement is tax-free
  • Any employee contributions qualify for tax rebate under section 88 of IT Act*

Kotak Gramin Bima Yojana

A fixed deposit that covers your life.

Life is about change and you will want to be prepared for it. At OM Kotak Mahindra, we understand your need to protect your loved ones and to provide for a financially independent future.

Presenting the Kotak Gramin Bima Yojana, a plan that takes protects your loved ones against uncertainties and provides you with guaranteed returns, just like your fixed deposit.

The Kotak Gramin Bima Yojana
The Kotak Gramin Bima Yojana is an insurance plan that not only covers your life but also ensures that your money works hard for you and generates returns. The plan lets you pay a one-time premium so you are saved the bother of remembering to make annual payments.

This is a non-participating plan.

Who can avail of this plan?

How old do you have to be to avail of this plan?
Minimum age- 18 years
Maximum age- 45 years

For what term can I avail of this plan?
15 years

What is the premium that I need to pay ?
Minimum – Rs.200
Maximum – Rs.20,000

What is the maximum age that the plan can cover you till?
70 years

What are the advantages of this plan?

  • The Kotak Gramin Bima Yojana combines the benefits of a fixed deposit and an insurance plan.
  • Easy one-time premium payments.
  • Guaranteed returns on maturity of the plan.
  • Increasing death benefit cover.
  • No medical tests required.
  • 15 day free-look period.

What do you receive on the maturity of the policy?
With the Kotak Gramin Bima Yojana, your money grows 1.5 times on maturity, i.e. you get back 150% of the single premium.


What do the beneficiaries receive in the event of death?
In the event of your death the beneficiary would receive the guaranteed death benefit. Depending upon the year of the event, the death benefit payable is as follows:


First 2 years of the term 100% of the single premium paid

Third year onwards till the 15th year 500% of the single premium paid

Are there any tax benefits?
Yes, the premiums paid under the plan will qualify for a deduction under Sec.80C and the maturity proceeds are fully exempt under Sec 10(10 D).
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