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What is Salary Protection Insurance and Why You Need It

Salary Protection plans help your family have a monthly income even in your absence. Read on to know about the benefits of salary protection insurance.

  • Sep 16, 2022

You work hard your entire life to ensure your loved ones get the best of everything. So why not help them with the same when you are not around with income protection insurance? Salary insurance, also known as income protection insurance, is a financial product that safeguards your family members in your absence.

You can decide how to split the total sum assured amount between the two components (regular income and lump sum) while choosing such a term insurance policy. The term insurance policy with a regular income payment option is a good choice for those who are not experienced investors or want to pick lower but assured profits.

However, buyers must be aware that it is a term policy with no incentives for maturing. In the event of the policyholder’s passing, a lump sum insured death benefit is only paid to the nominee.

Here are a few reasons why you might need income protection insurance.

Salary protection insurance secures your loved ones in your absence

Income insurance protection is the perfect solution if you earn a regular income and have family members depending on it for their living. It ensures they do not have to look for other ways to make ends meet in your absence. This policy does that by providing a guaranteed payout on your demise that helps them stay afloat during turbulent times. Moreover, it aids them in fulfilling life’s milestones like:

  • Paying for a child’s education or marriage
  • Adding to funds for a spouse’s retirement
  • Buying a new home/ setting up a business
  • Paying off any debts/ loans left by you

Salary protection insurance helps maintain the lifestyle of your loved ones

Apart from giving a fixed payout on your demise, income protection insurance also gives out regular payouts that help your family maintain their standard of living. With it, they do not have to compromise on their spending. Moreover, these steady payouts remove the burden of managing a lump sum amount and prevent a large pool of funds from running out quickly. Small and regular income payouts help to make it easy to manage money and meet needs from time to time.

Salary protection insurance keeps up with the times and fights inflation

With income protection insurance, you do not have to worry about your invested money remaining dormant. At the end of each policy year, the payout increases by a fixed percentage with a compounding effect. This increase is generally around 5% - 6%, depending on the income insurance company. It counters inflation and gives your loved ones the benefit of receiving the present value of money.

Protect your family with Kotak Life Income Protection Plan

If you want to leave a legacy of financial security for your loved ones after you are gone, you can get Kotak Life Income Protection Plan. The plan offers a range of benefits that include:

❏ An assured death benefit (sum assured) in a lump sum.

❏ This benefit amount is equal to 12 times the monthly income of the insured and compounded at the rate of 6% per year.

❏ 105% of the total premiums paid until the date of the insured’s demise

❏ A monthly income payout of the remaining benefit amount/ sum assured

❏ A monthly income increase by 6% per policy year to negate inflation

❏ The option to add an accidental disability guardian benefit rider

❏ Regular and limited paying premium terms

❏ A policy term ranging between 10 – 30 years

❏ Tax benefits under section 10 (10D) and Section 80C deductions of the Income Tax Act, 1961

A free-look period of 15 days

With income protection insurance, you get the necessary peace of mind knowing that your near and dear ones will not have to compromise on their financial needs. With it, you can continue to support them, even when you are not around.

Download Brochure


  • Increasing Life Cover*
  • Guaranteed^ Maturity Benefits
  • Enhanced Protection Through Riders
  • Tax Benefits
  • Dual Benefits: Guaranteed^Maturity + Death benefits

Ref. No. KLI/22-23/E-BB/999


Download Brochure


  • Enhanced Protection Through Riders
  • Life Cover
  • Tax Savings
  • Multiple Premium Payment Terms
  • Guaranteed @ Loyalty Addion
  • Accrued Guaranteed @ Additions

Ref. No. KLI/22-23/E-BB/490


- A Consumer Education Initiative series by Kotak Life

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