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Kotak Invest Maxima Plan

Overview

A unit linked assurance plan offering life insurance coverage and options to invest in different funds with various risk-return scenarios. Along with the life cover provided by the plan, multiple fund options under this policy can steadily add to the growth of investment. This Kotak Life plan comes with regular, limited and single premium payment options and is meant for people who wish to build a corpus through investing their savings in various funds.

Eligibility Conditions for Kotak Life Invest Maxima Plan

The eligibility conditions for availing this policy can be depicted in the table mentioned below -

Parameter

Minimum

Maximum

Policy Term (in subsequent 5 Years gaps)

10

30

Entry Age

0 years

65 years

Maturity Age Life Option

10 years

75 years

Key Features of Kotak Life Invest Maxima Plan

meant for wealth creation has the following salient features -

Parameters

Details

    

Plan Type

Unit-linked insurance plan

    

Basis

Individual policy

    

Policy Term

10 years to 30 years

    

Policy Validity

Will be for the chosen policy term in case all premiums have been paid

    

Basic Sum Assured

Criteria

Minimum

Maximum
 

Age < 45 years (For Regular and Limited Pay Options)

Greater of 10x annualised premium or half the product of annualised premium times policy term

25 times the annualised premium
 

Age >= 45 years (For Regular and Limited Pay Options)

Greater of 7x annualised premium or a quarter of the product of annualised premium times policy term

  
 

Single Pay Option

1.25 times the Single Premium amount

5 times the Single Premium amount

Top up Sum Assured (TSA)

If age of the policyholder at the time of top up is less than 45 years, the TSA will be 1.25 times the top-up Premium, else if the age is equal to or more than 45 years, TSA will be 1.10 times the top-up Premium

    

Coverage

Maturity Benefit = Fund value of all balance units in the main account and top-up accounts, including survival units at the end of the policy term.

    
 

Death Benefit = Greater of Sum Assured, Fund Value in Main Account, 105% of the premiums paid + Greater of Top-up Sum Assured, Fund Value in Top-up Account, 105% of the top-up premiums paid

    
       
 

Surrender Benefit

Before completion of 5 years

After completion of 5 years
   

Fund value minus discontinuation charges (if applicable) moved to Discontinued Policy Fund and paid out with accrued interest after 5 years’ completion

Fund value paid out immediately

Free look Period

30 days in case of online purchase. 15 days otherwise

    

Grace Period and Notice Period

30 days for annual payment mode, post which within the next 15 days, Kotak Life will send a notice to revive the policy. 30 days from date of receipt of notice is the notice period.

    

Partial Withdrawals

Allowed after a period of 5 policy years, provided the following terms are met -

  • The withdrawal amount is Rs. 10,000 or more
  • Minimum balance of one premium for Regular and Limited Pay and Rs. 10,000 for Single Pay must be maintained in the Main Account
    

Fund Choice Selection

Is allowed through -

  • Switching - Moving accumulated funds from one fund to another
  • Premium Redirection - Changing the premium allocation into a different set of funds
    

Settlement Option

Allows the Maturity Benefit to be availed in one of three available options -

  • Installments over a frequency from quarterly to yearly payouts
  • Part of maturity as a lump sum amount and the other as installments
  • Entire maturity amount as a lump sum
    

Nomination and Assignment

Nomination and assignment facility available but only one can be chosen at a time

    

Reinstatement or revival

Policy, if not surrendered, can be revived within two years from the date of last unpaid premium

    

Benefits and Advantages of Invest Maxima Plan

This plan from utilizes different investment funds to aid in the growth of wealth and can be opted for by anyone aiming to achieve greater returns on long term savings. Life insurance provided by this policy throughout the policy term is an added benefit. The key advantages in opting for this plan can be mentioned in the following points -

  1. Life cover is present throughout the policy term
  2. Flexible long term policy tenures for an investment portfolio with variable risk and returns
  3. Applicable tax benefits can be availed as per Section 80C and 10(10D) of the Income Tax Act
  4. Multiple fund options and unlimited switches to and from different fund options

The key benefits under this policy can be explained as below -

  1. Maturity Benefit - Paid once the policy reaches the maturity age, after the completion of the policy term, this amount can be paid to the policyholder or nominee. This amount includes the fund value of all the balance units in the main account and top-up account (if any)
  2. Death Benefit - In case of the death of the insured life, Death Benefit will be payable to the nominee. This will be less the withdrawals made by the policyholder. This sum includes the higher of every sum assured, all the fund value and 105% of all premiums
  3. Surrender Benefit - Policy has a lock-in period of 5 years. If surrendered within the lock-in period, funds move to Discontinuance Policy Fund and get paid after 5 years are complete. In case surrender is done after 5 years, fund value is paid out immediately
  4. Tax Benefit - The contributions made towards the premiums of this policy can be tax deductible as per Section 80C and the received benefits can fall under Section 10(10D). Though these benefits are dependent on the prevailing tax laws

Investment of Funds under Kotak Life Invest Maxima Policy

This unit-linked plan from Kotak Life comes with five fund options that offer a variable mix of risk and return. The premiums paid could be used over all of the fund options, a specific few as chosen by the policyholder or even in a single one. Investment of premiums in funds can be done through two portfolios, namely -

  • Self Managed Portfolio Strategy - Fund management done by policyholder
  • Systematic Switching Strategy - All or most of the investment is done in money markets and a pre-defined amount is transferred into Classic Opportunities Fund or Frontline Equity Fund

The details about the available funds have been mentioned in the table below -

Fund Name

Details

Asset Categories

    

Risk and Return Rating
   

Equity

Debt

Money Market

  
   

Fund Ratios

      

Classic Opportunities Fund

Potentially higher returns

75-100%

0-25%

0-25%

Very High

Frontline Equity Fund

Potentially higher returns

60-100%

0-40%

0-40%

Very High

Balanced Fund

Moderate growth in diverse equities

30-60%

20-70%

0-40%

Moderately High

Dynamic Bond Fund

Preserves capital, relatively higher fixed returns

N/A

60-100%

0-40%

Moderate

Money Market Fund

Protects capital and negates risk

N/A

N/A

100%

Low

Charges in Kotak Invest Maxima Policy

Being an insurance plan that relies on various funds to generate wealth on the investment made, the policy entails charges on quite a few aspects of itself. The applicable charges on this policy are as follows -

Charge

Particulars

  

Premium Allocation Charge

No applicable charge

  

Fund Management Charge

1.35% per annum of fund value, chargeable daily for Classic Opportunities Fund, Frontline Equity Fund and Balanced Fund. On a similar basis, 1.20% per annum is the charge for Dynamic Bond Fund, 0.60% per annum is charged for Money Market Fund and 0.50% per annum for Discontinued Policy Fund

  

Policy Administration Charge (applicable for main premiums only)

Subject to Rs. 500 per month, for Single Pay - 0.22% per month for Years 1-5, for Regular and Limited Pay - 0.60% per month for entire policy term

  

Mortality Charge

Dependent on policyholder’s age and level of cover

  

Miscellaneous Charges

Rs. 500 for policy alteration

  

Partial Withdrawal Charges

Rs. 500 per request

  

Switching Charges

Rs. 500 per request, post the first free 15 switches

  

Premium Redirection

Rs. 100 per request

  

Policy Discontinuance Charge (calculated on Main Account Fund Value (MAFV) or Annualised Premium (AP) and for the first four years only, zero from fifth year onwards)

Year of Policy

Calculation
 

Year 1

Lower of 6% of AP or MAFV <= Rs. 6000
 

Year 2

Lower of 4% of AP or MAFV <= Rs. 5000
 

Year 3

Lower of 3% of AP or MAFV <= Rs. 4000
 

Year 4

Lower of 2% of AP or MAFV <= Rs. 2000

Premium Payment for Kotak Life Invest Maxima Policy

The details of premium payment for this plan can be summarised in the table below -

Premium Parameter

Details

Premiums

Regular Pay - INR 50,000 to INR 1,00,000

Limited Pay - INR 75,000 to INR 1,00,000

Single Pay - INR 1,00,000 to INR 2,50,000

Premium Paying Term (PPT)

Regular Pay - 10 years, 15 years, 20 years, 25 years, 30 years

Limited Pay - 10 years, 15 years, 20 years, 25 years, 30 years

Single Pay - Once

Premium Paying Frequency

Premiums can be paid in annual frequencies

Premium Paying Modes

ECS, debit cards, credit cards, cheques and other acceptable modes

Premium Discontinuation Scenario for Invest Maxima

Post the mentioned grace period, if in case premiums for the policy are not paid and the policy lapses, the will cease to exist after the policy discontinuation and the fund value (as on the date of policy discontinuance) minus the discontinuance charge (only for Regular and Limited Pay options) will be shifted into a Discontinued Policy Fund and the interest rate applicable on this fund is 4% per annum as of September 2015. This fund shall attract an FMC of 0.50% per annum. If this scenario happens within the first five policy years, the funds shall be paid out at the end of the lock-in period of five years. If the discontinuance happens after 5 policy years, one can convert the policy into a paid-up policy or ask for a time extension of up to 2 years to revive the policy, else one can withdraw from the policy without any risk cover and the fund value will be paid out immediately.

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