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  • Kotak Headstart Child Assure Plan

    Kotak Life Insurance

    Overview

    As a responsible individual, you would want to provide the best of things to your children without compromising on your dignity. In this day and age of rising prices and overall inflation, you need to think beyond merely saving your hard-earned money. You would, therefore, do well to invest wisely in financial instruments which ensure that your children’s education is not jeopardized in the event of your unfortunate death. You can opt for one of the popular kotak Life child plans in India – the Kotak Headstart Child Assure Plan, a unit-linked insurance plan (ULIP). By opting for this plan, you can build a corpus to fund for your children's expenses sans worries. Under this plan, if the life insured dies, the nominee will get the triple benefit as listed below:

    • Basic sum assured is paid immediately
    • All future premiums will be added to the fund value
    • The policy will continue. Fund value will be paid at maturity

    However, linked insurance plans do not offer any liquidity in the first five years of the contract.

    Eligibility Conditions of Kotak Headstart Child Assure Plan

    Entry Age

    18 to 60 years

    Policy Term

    10, 15 to 25 years

    Key Features of Kotak Headstart Child Assure Plan

    Type

    Unit-linked non-participating endowment plan

    Minimum Sum Assured

    Entry age of below 45

    Minimum: Higher of 10 x annualised premium or 0.5 x policy term x annualised premium

    Entry age of 45 and above

    Minimum: Higher of 7 x annualised premium or 0.25 x policy term x annualised premium

    Maximum: 25 x annualised premium

     

    Coverage

    • Death Benefit

      In the event of the death of the policyholder, the basic sum assured plus fund value subject to a minimum of 105% of total premiums till the time of death is payable. The reduced paid-up basic sum assured will be paid as lumpsum while premium waiver benefit will cease. Also, the reduced paid-up basic sum assured plus fund value will be subject to a minimum of 105% of total premiums paid.

    • Maturity Benefit

      Policyholders can take the full fund value at maturity or receive the maturity proceeds partly in cash and the balance in terms of instalments for up to five years after maturity.

    • Flexible Withdrawals

      Policyholders can access their investment after completion of the 5th policy year by way of partial withdrawals. For each partial withdrawal, Rs. 500 will be charged. Minimum amount for partial withdrawal is Rs.10,000.

    Premium range

    Minimum

    Regular and 10 PPT

    Yearly - Rs.20,000 p.a; half-yearly - Rs.10,000

    5 PPT

    Yearly - Rs.50,000 p.a; half-yearly - Rs.25,000

    Maximum: No limit

    Premium paying term

    Regular

    10, 15 to 25 years (equal to the policy term)

    Limited

    5 years for policy term 10 years

    10 years for policy term of 15 to 25 years

    Premium paying frequency

    Annual and half-yearly

    Loan

    Not available under this plan

    Freelook period

    Customers can return the policy within 15 days from the date of receipt of policy.

    Grace period

    30 days from the due date of premium

    Reinstatement

    This plan can be revived until the expiry of the notice period. Policyholders can revive a discontinued policy within 2 years from the date of discontinuance.

    Advantages of Kotak Headstart Child Assure Plan

    Tax benefit

    This plan offers tax benefits under section 80C and section 10 (10D) of the IT Act, 1961

    Settlement options

    This plan offers maturity proceeds in cash or selected instalments for up to five years after maturity. Customers have the following three options:

    • Maturity proceeds as an immediate payout
    • Part of the maturity proceed as a lump sum and part as instalments
    • Whole amount as instalments

    Switching

    Policyholders can switch between fund options or change their future premium allocation according to the their investment objectives

    Funds

    This plan offers a wide range of funds suitable for all types of investors. Customers can invest in fund options depending on their risk appetite and build a corpus. A team of qualified managers handle the portfolio. The funds offered by this plan are listed below:

    • Dynamic bond fund
    • Money market fund
    • Dynamic Floating rate fund
    • Dynamic gilt fund
    • Classic opportunities fund
    • Frontline equity fund
    • Balanced fund

    Premium Payment

    Regular premium

    Minimum: Rs. 20,000 p.a

    Limited premium payment

    5 years minimum: Rs. 50,000

    10 years minimum: Rs. 20,000

    Premium allocation charge

    Premiums

    Policy year

       
     

    1

    2-5 years

    6 onwards

    Rs.20,000 to Rs. 1,99,999

    6%

    3%

    2%

    Rs.2,00,000 to Rs. 9,99,999

    5%

       

    Rs.10,00,000 and above

    4%

       

    How The Plan Works

    Abhishekh Sarma, a 33-year-old businessman opts for Kotak Headstart Child Assure Plan for a policy term and premium payment term of 20 years, sum assured of Rs.5 lakh and an annual premium of Rs. 50,000. Sarma selects the Frontline equity fund. The table below displays the fund value and death benefit.

       

    Non-Guaranteed Benefits at 8% *

       

    Years

    Age

    Fund Value (Rs)

    Death Benefit (Rs)

    Premium (Rs)

    10

    45

    6,27,220

    1,628,320

    5,00,000

    15

    50

    1,120,000

    1,870,000

    7,50,000

    20

    55

    1,788,510

    10,00,000

    *Net Yield is 6.06%

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