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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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We all know that getting life insurance is the best and most reliable way to secure and provide protection for our loved ones’ after you. In case you survive the policy’s term, you are eligible for a maturity benefit equal to all premiums paid with most of the policies. But what if we told you there was a way to invest that included the benefits of both life insurance and market-based investing strategies all in one? Isn’t this too good to be true? Such policies are called ULIP.
A Unit Linked Insurance Plan (ULIP) is a type of insurance with a 5-year lock-in period that integrates insurance and investment into one convenient bundle. The goal of ULIP is to provide both insurance coverage and wealth accumulation, with the insurance company investing a chunk of money in the insurance policy and the rest in a fund that is based on stocks, debt, or both and matches your long-term goals. Retirement planning, children’s education, or any other big event for which you may save are examples of these aspirations.
Since ULIPs are hybrid plans, they provide both sum assured and fund value benefits. Assuming you survive the ULIP’s final term, you can wonder what you’d receive between the two? Let’s take a closer look at the difference between the amount assured and fund value to have a better understanding of this.
In a Unit Linked Insurance Plan, the sum assured refers to the amount that the insurer pays to the policyholder’s loved ones if the policyholder dies during the policy’s term. In case of the insured event, it is the sum promised by the insurer to the policyholder’s beneficiaries. This amount practically promises the policyholder and their family that, in the case of a catastrophic catastrophe, the surviving relatives will receive a sum equivalent to the total guaranteed.
When you buy ULIP, you get a certain number of units in the fund. The ULIP fund performance or fund value is equivalent to the combined total value of the funds in your holdings. As a result, the returns you receive from your ULIP — that is, the fund value at maturity – are referred to as the fund value. A ULIP’s fund value is simple to determine. It’s calculated by multiplying the NAV of each unit in the fund on every given day by the number of units you own.
Moving on to the maturity benefits of ULIPs - they differ from traditional insurance policies in a few ways. The policy is deemed to have matured if you, the policyholder, live to see the end of the ULIP’s term, and the fund value is paid out to the policyholder upon maturity.
Until Budget 2021, the advantages on ULIP maturity were completely tax-free if certain requirements were met, as outlined in Section 10 (10D) of the Income Tax Act of 1961. As a result, now that we’re on the other side of the FY22 budget, the taxability of ULIP benefits based on maturity can be separated into two groups.
It is vital that you compare all of the plans and select the one that best meets your needs!
- A Consumer Education Initiative series by Kotak Life
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