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 |
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Policy Term (in subsequent 5 Years gaps) |
10 |
30 |
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Entry Age |
0 years |
65 years |
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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 -
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Parameters |
Details |
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Plan Type |
Unit-linked insurance plan |
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Basis |
Individual policy |
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Policy Term |
10 years to 30 years |
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Policy Validity |
Will be for the chosen policy term in case all premiums have been paid |
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Basic Sum Assured |
Criteria |
Minimum |
Maximum |
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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 |
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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 |
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Single Pay Option |
1.25 times the Single Premium amount |
5 times the Single Premium amount |
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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 |
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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. |
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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 |
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Surrender Benefit |
Before completion of 5 years |
After completion of 5 years |
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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 |
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Free look Period |
30 days in case of online purchase. 15 days otherwise |
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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. |
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Partial Withdrawals |
Allowed after a period of 5 policy years, provided the following terms are met -
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Fund Choice Selection |
Is allowed through -
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Settlement Option |
Allows the Maturity Benefit to be availed in one of three available options -
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Nomination and Assignment |
Nomination and assignment facility available but only one can be chosen at a time |
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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 -
- Life cover is present throughout the policy term
- Flexible long term policy tenures for an investment portfolio with variable risk and returns
- Applicable tax benefits can be availed as per Section 80C and 10(10D) of the Income Tax Act
- Multiple fund options and unlimited switches to and from different fund options
The key benefits under this policy can be explained as below -
- 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)
- 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
- 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
- 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 |
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Equity |
Debt |
Money Market |
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Fund Ratios |
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Classic Opportunities Fund |
Potentially higher returns |
75-100% |
0-25% |
0-25% |
Very High |
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Frontline Equity Fund |
Potentially higher returns |
60-100% |
0-40% |
0-40% |
Very High |
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Balanced Fund |
Moderate growth in diverse equities |
30-60% |
20-70% |
0-40% |
Moderately High |
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Dynamic Bond Fund |
Preserves capital, relatively higher fixed returns |
N/A |
60-100% |
0-40% |
Moderate |
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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 |
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Premium Allocation Charge |
No applicable charge |
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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 |
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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 |
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Mortality Charge |
Dependent on policyholder’s age and level of cover |
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Miscellaneous Charges |
Rs. 500 for policy alteration |
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Partial Withdrawal Charges |
Rs. 500 per request |
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Switching Charges |
Rs. 500 per request, post the first free 15 switches |
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Premium Redirection |
Rs. 100 per request |
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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 |
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Year 1 |
Lower of 6% of AP or MAFV <= Rs. 6000 |
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Year 2 |
Lower of 4% of AP or MAFV <= Rs. 5000 |
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Year 3 |
Lower of 3% of AP or MAFV <= Rs. 4000 |
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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 -
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Premium Parameter |
Details |
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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 |
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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 |
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Premium Paying Frequency |
Premiums can be paid in annual frequencies |
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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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GST of 18% is applicable on life insurance effective from the 1st of July, 2017
