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  • Kotak Secure Return Employee Benefit Plan

    Kotak Life Insurance

    Overview

    Kotak Life Insurance has designed Kotak Secure Return Employee Benefit Plan to cater to the needs of employers, trusts, state government, central government or PSUs to fund a group member's benefit schemes. This product offers comprehensive employee benefit solution to manage the gratuity and leave encashment schemes in an efficient manner. It is a non-participating variable insurance group plan that offers competitive returns. It offers a guaranteed minimum floor rate of 2 percent per annum and a competitive additional interest rate is declared at the beginning of each quarter. It offers an additional protection to life at an additional cost and the renewal process is convenient and auto renewed provided that there are sufficient premiums available.

    Eligibility Conditions of Kotak Secure Return Employee Benefit Plan

    Particulars

    Minimum

    Maximum

    Entry Age

    18 years

    74 years

    Maximum maturity age

    -

    75 years

    Term

    1 year renewable

    -

    Contribution

    Rs.15 lakhs

    No limit.

    Key Features of Kotak Secure Return Employee Benefit Plan

    Type

    A group life insurance plan, group gratuity or leave encashment plan.

    Basis

    Group

    Coverage

    Insurance Benefit: If a member dies, the sum assured will be paid to the nominee as advised by the policyholder. The insurance cover is mandatory to gratuity and leave encashment schemes. These benefits are paid by the company.

    Guaranteed minimum floor rate of 2 percent per annum is paid to the entire policy term on the balance of the account value.

    Policy account

    Each policyholder will have separate policy account.

    Premium paying term

    1 year

    Premium paying frequency

    Monthly, quarterly, half-yearly or annually. The premium frequency can be as desired by the policyholder.

    Bonuses

    No bonus.

    Surrender Value

    The policy can be surrendered at any time provided you give one month’s written notice. The surrender value will be equal to policyholders account value that is adjusted for Market Value Adjuster.

    Loan

    Loan facilities are not available.

    Free look period

    Policyholder gets 15 days free look period from the date of receipt of the policy. If the policyholder wants to return the policy, the refund will be paid after adjusting for expenses for stamp duty.

    Grace period

    Not applicable.

    Advantages of Kotak Secure Return Employee Benefit Plan

    The advantages of the Kotak Secure Return Employee Benefit Plan are:

    • On death of a scheme member, the benefit is paid in accordance with the scheme rules and focus on a maximum of the policy account value. If the member has opted for life cover, he gets an additional benefit of Rs.1,000.
    • If the member exist this plan due to termination of service or on resignation or early retirement or due to natural death, the benefit is paid in accordance with the scheme rules bearing in mind the maximum policy account value.
    • The benefits are payable on normal retirement as per the scheme rules laid out by the employer.
    • On the accumulating balance of the account value, a guaranteed minimum floor rate of 2 percent per annum is paid for the entire policy term.
    • Competitive additional interest rates are professed at the beginning of every quarter.
    • The plan is auto renewed annually subject to availability of sufficient premiums.
    • Tax benefits change from time to time, so you need to consult with your tax advisor for further details.

    How The Plan Works

    The plan is taken by the employer and it has to paid for by the employer on behalf of the employee. The group members cannot contribute to the premiums directly. The additional life cover can be opted for your members at an additional cost. The benefits are paid on the date of retirement. If the member dies or is terminated, resigns, retires early, then the benefit is paid in accordance to the rules of the scheme, subject to a maximum of the policy account value.

    For instance, you contribute Rs.100,000,000 in the first year, subject to a mortality charge of Re.1 per Rs.1,000 sum assured, your account value will be:

    Year

    Annual Contribution (in Rs.)

    Investment Income (non-guaranteed)

     

    Account value at end of the year

     
       

    4% (in Rs.)

    8% (in Rs.)

    4% (in Rs.)

    8% (in Rs.)

    1

    40,000,000

    5,600,000

    11,200,000

    145,600,000

    151,200,000

    2

    42,400,000

    7,520,000

    15,488,000

    195,520,000

    209,088,000

    3

    44,944,000

    9,618,560

    20,322,560

    250,082,560

    274,354,560

    4

    47,640,640

    11,908,928

    25,759,616

    309,632,128

    347,754,816

    5

    50,499,078

    14,405,248

    31,860,312

    374,536,455

    430,114,206

    6

    43,529,023

    17,122,619

    38,691,458

    445,188,097

    522,334,687

    7

    56,740,764

    20,077,154

    46,326,036

    522,006,016

    625,401,488

    8

    60,145,210

    23,286,049

    54,843,736

    605,437,275

    740,390,434

    9

    63,753,923

    26,767,648

    64,331,549

    695,958,846

    868,475,906

    10

    67,579,158

    30,541,520

    74,884,405

    794,079,525

    1,010,939,469

    Premium Payment and Riders

    The premium is paid only once while purchasing this plan. It is usually auto renewed each year provided that there sufficient premiums are available.

    This plan also does not have riders.

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