Now you can buy life insurance plans completely online right here.
Kotak e-Term Plan is a pure term plan that provides a high level of protection to your loved ones in your absence.
The Kotak Health Shield Plan helps secure your finances in times of sudden medical expenses related to illness such as Cardiac, Liver, Neuro and Cancer (all early and major stages of illness /conditions of Cancer); along with offering protection for Personal Accident - in case of accidental death or disability.
Kotak Lifetime Income Plan gives you the assurance of your income continuing throughout your life and in your absence throughout the lifetime of your spouse!
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As important as insurance is, its relevance in your life can depend on a number of factors. Not all insurance plans are the same. Each plan has its own advantages, features, and impact on your standard of living and your family’s present and future financial requirements. Some of the most commonly bought insurance policies include a term insurance plan, a health insurance plan, and a Unit Linked Insurance Plan (ULIP).
This article talks about the differences between these plans and how and when you may buy them.
What is a term insurance plan?
A term insurance plan is a pure life protection plan. When you buy term insurance, you pay regular premiums in return for a sum assured. This sum assured is paid to your family in the unfortunate event of your death during the policy term. There are no survival benefits if you survive the term. Term insurance plans are primarily designed for the sole earning member of the family as it can be hard for their loved ones to cover the costs of routine expenses in their absence.
A term plan offers a high sum assured at a relatively smaller premium. In fact, term insurance may be the most affordable insurance product.
What is a health insurance plan?
A health insurance plan provides financial protection for healthcare expenses. Health insurance covers expenses that arise out of an illness, injury, accident, etc. The sum assured, in this case, can be claimed at the time of diagnosis. This money can then be used for a variety of costs, such as pre and post-hospitalization expenses, ambulance fare, medicine bills, room rent, etc. A health insurance plan may or may not offer protection for life.
What is a Unit Linked Insurance Plan (ULIP)?
A Unit Linked Insurance Plan is an insurance product that offers life insurance as well as investment opportunities. With a ULIP, you can secure your family’s future with the life cover. A part of your premium is used to secure the sum assured, and the other part is invested in the market for better returns. Moreover, on maturity, you get the return from your investments along with accrued bonuses, rewards, etc. Hence, allowing you to build a savings fund for your long term goals. The level of investment and the amount of sum assured can be chosen as your needs, and the premiums are decided accordingly.
Key difference between a health insurance plan, a term insurance plan and a
Unit Linked Insurance Plan
|Point of difference||Health insurance||Term insurance||Unit linked investment plan|
|Coverage provided||covers the costs of various illnesses included in the plan along with other health-related expenses, such as
● The cost of pre and post-hospitalization
● The cost of medicines
● Doctor’s fees
● Ambulance charges
● Surgery costs
● Diagnostic tests and health checkups, etc
|Offers a sum assured to the nominee in the unfortunate event of the policy holder’s death during the policy term||Offers life protection, along with investment opportunities to grow money.|
|Utility||Ideal for people who need to cover their healthcare expenses.||Ideal for people who are the chief earning members in the family with financially dependent loved ones.||Ideal for people who are looking to grow their money while safeguarding the future of their family.|
|Investment component||There is no investment component.||There is no investment component.||There is an investment component.|
|Types of policies||Health insurance plans can be categorized as
● Individual health plans
● Critical illness health plans
● Family floater health insurance policy
● Senior-citizen health policy
● Corporate group health insurance policy
|There are two types of term insurance plans:
● Regular Term Insurance Plans
● Term Plans with Return of Premium (TROP)
|There are not any ULIP types. However, you can choose different types of funds, such as equity, debt, etc.|
|Add-on covers or riders||Some common riders include:
● Maternity and newborn baby cover
● Personal accident cover, etc.
|Some common riders include:
● Accidental death benefit rider
● Permanent disability rider
● Critical illness rider
|Some common riders include:|
● Accidental death benefit rider
● Permanent disability rider
● Critical illness rider
|Premium||Depends on the coverage of the plan.||Depends on the sum assured, but comparatively low.||Depends on the money invested and the sum assured chosen.|
|Lock-in period||There is no lock-in period, but there can be a waiting period for pre-existing illnesses.||There is no lock-in period.||There is a lock-in period of 5 years.|
|Returns||There are no returns.||There are no returns for regular term plans. In TROPs, the sum of all premiums paid is returned as a maturity benefit if the policyholder survives the policy term.||The returns depend on the market situation.|
|Tax benefits||You can claim a tax deduction for the premiums paid under Section 80D of the Income Tax Act of 1961.||You can claim a tax deduction for the premiums paid under Section 80D of the Income Tax Act of 1961. The payout received by your nominee is also tax-free under Section 10(10D).||You can claim a tax deduction for the premiums paid under Section 80D of the Income Tax Act of 1961. The maturity amount and the death benefit is also tax-free under Section 10(10D).|
|Ideal time to purchase||Health insurance is crucial for people of all ages, including children, young adults, and senior citizens. Moreover, the younger you are when you buy a health insurance plan, the more affordable are the premiums.||Term insurance is crucial for working professionals whose families depend on them for their income. Moreover, the younger you are when you buy a term insurance plan, the more affordable are the premiums.||ULIPs are long term investment products. The right time to purchase a ULIP depends on your goals and time horizon.|
Term insurance plans from Kotak Life
The Kotak e-Term Plan can offer your loved ones a financial cushion to fall back on in your absence. This plan offers many benefits, such as:
1. High sum assured at an affordable premium
2. Flexible premiums payment methods like single, one-time, or regular payments
3. Enhanced protection with riders like:
Health insurance plans from Kotak Life
The Kotak Health Shield plan offers a death benefit to your loved ones in the unfortunate case of your death and financial protection against critical illnesses. Here are some features of the plan:
1. A minimum sum assured of Rs.10,00,000 and a maximum sum assured of Rs.50,00,000
2. Flexible premiums payment methods like single or regular payments
3. Fours covers:
4. Personal accident and permanent disability cover,
5. Daily hospital cash benefit
6. Waiver of premium benefit on being diagnosed with a minor health condition
7. Income benefit on being diagnosed with a major health condition
Unit Linked Insurance Plans by Kotak Life
Kotak Life offers multiple ULIP plans with flexible options and multiple portfolio strategies, such as:
These plans can provide you with excellent investment options suitable for your goals, along with life protection.
How to choose between a term insurance plan, a health insurance plan, and a unit linked investment plan?
Each of these plans offers a unique set of features that can cater to different needs. While health insurance is vital for all, irrespective of age or income, a term insurance plan and a ULIP may be suitable only for some. Term insurance is targeted at chief earning members of the family. The premiums are low, and the sum assured is high. However, the sum assured can only be claimed at the time of death during a policy term. If this clause does not appeal to you, you can look at other types of life insurance plans, such as whole life insurance plans.
ULIPs, on the other hand, offer something that is completely different from a term plan and a health plan. A ULIP can be a good option if you want to invest your money and secure your loved ones under one policy. These plans will offer you a death benefit as well as maturity benefits that will include bonuses, rewards, and your investment returns.
It helps to discuss these factors with your family members before purchasing a plan. Being cognizant of their inputs and needs can help you pick a policy that benefits your family as a whole.
To sum it up
Insurance should be a part of your financial planning, but the kind of plan you choose can depend on your unique needs and future goals. Term insurance as well as Unit Linked Insurance Plans all offer great benefits and features that can help you build a savings fund for times when you and your loved ones need financial liquidity.Make sure to understand their advantages and utility, so you can pick a policy that provides you with maximum benefits over the long run
- A Consumer Education Initiative series by Kotak Life
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