Overview
The is a group life insurance plan aimed at credit institutions such as banks, retail financing companies etc. to cover groups of borrowers so that institutions can offset the risk of default in the unfortunate case of a borrower’s death. The plan will also help the borrower’s family by relieving them of the financial burden of a loan. This is a cost effective plan that will help lenders to competitively price their products on the back of greater financial security. The medical examination norms are relaxed in some cases while the non-medical cover limit varies as per the loan tenure, age of borrower and loan type. The plan is offered by Kotak Life Insurance.
Eligibility Conditions of Kotak Credit Term Group Plan
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Entry Age |
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Maturity Age |
Maximum – 65 years |
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Sum Assured |
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Key Features of Kotak Credit Term Group Plan
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Type |
Group term insurance |
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Coverage |
Death Benefit – In the unfortunate event of death during the policy term, the member shall receive Sum Assured equal to the outstanding loan amount (or original loan amount). |
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Basis |
Group |
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Premium paying term |
1 year (renewable annually) |
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Premium paying modal factor |
Yearly – 100% Monthly – 8.5% |
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Premium payment frequency |
Yearly and Monthly |
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Renewability |
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Loans |
NA |
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Policy termination |
Policy will terminate at the earliest of:
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Free Look Period |
15 days free look period is offered wherein a policyholder may return the policy if he/she is not agreeable to terms and conditions of the plan. Refund of premium will be processed after adjustments for stamp duty, medical examination and proportionate risk premium for period covered. |
Advantages of Kotak Credit Term Group Plan
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Tax Benefits |
Tax benefits are available under Section 80C (tax deduction for borrowers) and Section 10 (10D) (tax free benefits for borrowers) of the Income Tax Act, 1961. The credit institution may also be eligible for tax deductions as premium paid could be considered as business expenses. Service tax shall be applicable over and above premium paid. You should consult your tax advisor for more details. |
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Riders |
Information unavailabl |
Benefits of Kotak Credit Term Group Plan
For borrowers
- Low cost product as group cover allows for pooling of risk
- Convenient and hassle free documentation
- Relaxed medical exam norms in some cases
- available 24/7 around the world
For credit institutions
- Removes risk of default in unfortunate case of borrower’s death
- Competitive pricing of credit products
- Cost effective due to group pricing as well as premium recovery from the customer
- Hassle free administrative procedure
Services
- Dedicated customer relationship manager
- Comprehensive support from centralized Group Operations Team
- Centralized customer support
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GST of 18% is applicable on life insurance effective from the 1st of July, 2017
