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  • Kotak Leave Encashment Group Plan

    Overview

    When a company has employees they need to cater to their leave encashments, which turns out to be a liabilities for companies and has increased over a period of time. With this unit-linked plan from Kotak it reduces the strain for finance on the employer company. With the Kotak Leave Encashment Group Plan they have the ability to fund the leave encashment of the employees in a systematic manner and will not affect the business activities.

    The Eligibility Criteria For This Plan is:

    Particulars

    Minimum

    Maximum

    Entry age

    18 years

    74 years

    Maturity age

    -

     75 years

    Group size

    10 employees

    No Limit

    The company’s leave encashment contribution at the start of the policy should be a minimum of Rs. 2, 00, 000 there’s no maximum limit for this contribution.

    The sum assured is a flat amount of Rs. 1, 000. With a policy term of minimum 1 year which is renewable annually.

    Key Features of This Leave Encashment Group Plan:

    1. Get life insurance cover for your employees
    2. Also get long term growth in your investment with market linked returns: This enables an employer to reward his talented employee with leave encashment, without affecting the moneys of the business.
    3. Choose between 6 different fund options to make your investments:
      1. Group Balanced Fund - which has a moderate risk-return profile
      2. Group Bond Fund - which has a conservative risk-return profile
      3. Group Floating Rate Fund - which has a conservative risk-return profile
      4. Group Gilt Fund - which has a conservative risk-return profile
      5. Group Money Market Fund - which has a secure risk-return profile
      6. Group Short Term Bond Fund - which has a conservative risk-return profile
    4. Get regular additions to increase your fund sizes, these additions are made to the scheme at the start of every calendar month. The additions are made at the rate of 0.10% - 0.50% per annum.
    5. Freelook period of 15 days from date of receipt of the policy.
    6. The renewal process is extremely and it gets auto renewed if there is enough premiums available

    The Main Benefits for The Leave Encashment Group Plan

    For the employer when the leave encashment benefit has been paid out the cash equivalent of the leave encashment benefit will be deductible from his income under section 43B(f) as per the Income Tax Act 1961

    For the employee they are eligible for a tax benefit under the section 10 (10AA) as per the Income Tax Act 1961

    1. For government employees Government employees at the time of retirement get their leave encashment benefit payments which are completely tax free.
    2. Non-government employees at the time of retirement get their leave encashment benefit and get tax-exempt for an amount which will be the least of the following:
      1. up to Rs. 3, 00, 000.
      2. 10 months of salary, this is an average drawn in the last ten months.
      3. leave encashment will be received at the time of retirement.
      4. Cash equivalent of the salary of the employee of the leave due at retirement .
    3. Survival Benefit - on resignation or retirement or termination this benefit is payable as per the scheme rules.
    4. Death benefit - on the death of a member, the amount payable will be the sum assured of Rs. 1, 000 and the leave encashment benefit settlement as per the scheme rules.
    5. Switching is allowed between funds during the policy term, there are no charges for these switches.
    6. Future contributions can be redirected into other funds as well.

    Investment Options:

    Fund name

    Risk-Return

    Equity

    Debt

    Cash and Money Market

    Group Balanced Fund

    Moderate

    30% - 60%

    20% to 70%

    0% to 40%

    Group Bond Fund

    Conservative

     -

    Government / Government guaranteed securities – 0% to 75%

    Other Debt securities – 25% - 100%

    0% to 40%

    Group Floating Rate Fund

    Conservative

     -

    Government / Government guaranteed securities – 0% to 75%

    Floating Rate Debt securities – 25% - 100%

    0% to 40%

    Group Gilt Fund

    Conservative

     -

    Government / Government guaranteed securities – 80% to 100%

    0% to 20%

    Group Money Market Fund

    Secure

     -

    -

    100%

    Group Short Term Bond Fund

    Conservative

     -

    Government / Government guaranteed securities – 0-50%

    Other Debt instruments – 25% to 75%

    10% - 75%

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