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Kotak e-Term Plan is a pure term plan that provides a high level of protection to your loved ones in your absence.
Kotak e-Invest is a comprehensive Unit Linked Life Insurance Plan that can be customized as per your goals and needs - be it protection; investment; financial security for child or retirement planning.
Kotak Guaranteed Savings Plan is a savings and protection plan that helps you achieve long-term financial goals and insurance cover against any eventuality.
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!
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.
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In recent years, ULIPs have established themselves as reliable long-term investment tools that provide high profits and returns on investment. A Unit Linked Insurance Plan is a combination of insurance and investment which is subject to a five-year lock-in period. It is one of the most interesting financial instruments available to investors. Unit-Linked Insurance Plans provide insurance coverage while also producing profits through investment sources in a manner similar to mutual funds. The insurance provider launches a new plan and encourages investors to participate - which means that ULIP plans invest in stocks, commodities, and debt instruments. Let us go over some details of ULIP plans to make these terms and conditions clear.
ULIPs have a five-year lock-in term, though it is possible to cancel the insurance. The money, on the other hand, will not be paid to the policyholder until the completion of the 5-year period. It’s worth noting that the amount paid after 5 years is not the fund’s actual worth on the day of surrender.
The leftover ULIP fund performance value is transferred to the Discontinued Policy (DP) fund after discontinuation charges are deducted. Until the conclusion of the lock-in term, your funds will stay in the DP fund. During this time, a fund management fee of up to 0.5 percent of the fund’s value may be paid. This fund can also generate interest at a rate of around 4 percent per year, ensuring a minimum guaranteed return.
While there are no charges on exit fees after the lock-in period, surrendering your plan is not recommended. Staying invested for extended period of time, such as 15-20 years, allows you to profit from market regularization while also distributing mortality, fund management, administrative, and other expenses across the policy’s tenure. Unit cancellation or a reduction in the market value are used to cover the associated expenses. As a result of the larger deductions in the early years, the investment over the 5-year period is smaller than in the later years. Hence, abandoning the fund after the lock-in period reduces the investment value of the ULIP fund performance.
Even if you surrender the scheme before the lock-in period is completed, you have the option to revive it within two years of surrender. The surrender costs levied before are returned to the DP fund value upon re-activation, and the outstanding ULIP premium and related charges are subtracted.
The sum secured for your ULIP plan is only repaid to its original value after two years if you make a partial withdrawal. This is also contingent on you not withdrawing any further funds during this time. This means that if the withdrawal is made less than two years before the policyholder’s death, the death benefit will be reduced. After the age of 60, any partial withdrawals are subtracted from the death benefit.
To conclude, ULIPs are not only fantastic investment alternatives, but their simplicity of partial withdrawal and policy surrender also makes it simpler to manage one’s finances in the event of an unexpected need or emergency without any major loss. It definitely makes for a good investment!
- A Consumer Education Initiative series by Kotak Life
The Kotak Term Plan is a pure risk cover plan and an economical way of providing an adequate level of financial protection.Know more