Kotak life insurance

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Kotak life insurance

  1. 1. LIFE INSURANCE - KOTAK MAHINDRA CONTENTS Sr.No. PARTICULARS Page No. 1. SUMMARY 1. 2. INTRODUCTION 2. 3. LIFE INSURANCE 5. 4. KOTAK MAHINDRA 12. 5. PRODUCT 13. 6. Q3 RESULT 35. 7. COMPARISON WITH SBI’S PRODUCT 36. 8. SURVEY FORM 39. 9. SURVEY RESULT 40. 10. SURVEY REPORT 43. 11. FAQ’S 44. 12. ARTICLES 48. 13. CONCLUSION 52. 14. BIBLIOGRAPHY 53. T.Y.B.B.I. SEMESTER VI 1
  2. 2. LIFE INSURANCE - KOTAK MAHINDRA S UMMARY Insurance is a tool or device through which some risks can be reduced, eliminated or transferred. Every individual and business face some uncertainties (i.e. possibility of encountering loss due to certain events) and these can be to a certain extent removed through insurance. Insurance is thus, a tool by which the loss likely to be caused by an uncertain event is spread amongst a number of people who face similar risks. Insurance is a cooperative way of bearing risks. Insurance provides certainty (i.e. protection by way of compensation) for some uncertainty (i.e. possibility of loss due to an unforeseen event.) This project titled “KOTAK MAHINDRA - LIFE INSURANCE” it is an attempt to bring out the overview features and product offered by the kotak mahindra. This project tries to give the brief history, mission and objectives of the company and its product. This project would discuss the key features, benefits and how the plan works which can suits to the policy holders. The project also discuss the financial position of kotak mahindra its last year profits, it will also try to bring the difference between SBI’s life insurance. In this project I have tried to bring out some of the important product offered by the kotak mahindra. T.Y.B.B.I. SEMESTER VI 2
  3. 3. LIFE INSURANCE - KOTAK MAHINDRA INTRODUCTION  The business of insurance is related to the protection of the economic value assets. Every asset has a value. The asset would have been created through the efforts of the owner. The asset is valuable to the owner, because he expects to get some benefits from it. The benefit may be an income or some thing else. It is a benefit because it meets some of his needs. In the case of a factory or a cow, the product generated by is sold and income generated. In the case of a motor car, it provides comfort and convenience in transportation. There is no direct income.  Every asset is expected to last for a certain period of time during which it will perform. After that, the benefit may not be available. There is a life- time for a machine in a factory or a cow or a motor car. None of them will last for ever. The owner is aware of this and he can so manage his affairs that by the end of that period or life-time, a substitute is made available. Thus, he makes sure that the value or income is not lost. However, the asset may get lost earlier. An accident or some other unfortunate event may destroy it or make it non-functional. In that case, the owner and those deriving benefits and the planned substitute would not have been ready. There is an adverse or unpleasant situation. Insurance is a mechanism that helps to reduce the effect of such adverse situations. T.Y.B.B.I. SEMESTER VI 3
  4. 4. LIFE INSURANCE - KOTAK MAHINDRA MEANI NG In life and in business, there are various events which may cause financial loss to an individual business. Some of the events also called as “risks” can be avoided or prevented while some of them can be reduced or transferred to another person. Insurance is a tool or device through which some risks can be reduced, eliminated or transferred. Every individual and business face some uncertainties (i.e. possibility of encountering loss due to certain events) and these can be to a certain extent removed through insurance. Insurance is thus, a tool by which the loss likely to be caused by an uncertain event is spread amongst a number of people who face similar risks. Insurance is a cooperative way of bearing risks. Insurance provides certainty (i.e. protection by way of compensation) for some uncertainty (i.e. possibility of loss due to an unforeseen event.) DEFINITION Insurance is “a contract between two parties, whereby one party, (called ‘insurer’) undertakes, in exchange for a fixed sum (called ‘premium’) to pay the other party (called ‘insured’) fixed amount of money (called compensation) on the happening of a certain event. The insurer i.e. the insurance company undertakes to indemnify (make good the loss) to the insured for loss or damage arising as a result of the particular risks. T.Y.B.B.I. SEMESTER VI 4
  5. 5. LIFE INSURANCE - KOTAK MAHINDRA Basically, there are two types of insurance i.e. life & non-life insurance. Life insurance covers the risks to an individual’s life while non-life insurance covers risks to business and includes fire insurance, marine insurance, liability insurance etc. PURPOSE & NEED OF INSURANCE Assets are insured, because they are likely to be destroyed, through accidental occurrences. Such possible occurrences are called perils. Fire, floods, breakdowns, lightning, earthquakes, etc, are perils. If such perils can cause damage to the asset, we say that the asset is exposed to that risk. Perils are the events. Risks are the consequential losses or damages. The risk to a owner of a building, because of the peril of an earthquake, may be a few lakhs or a few crores of rupees, depending on the cost of the building and the contents in it. The risk only means that there is a possibility of loss or damage. The damage may or may not happen. Insurance is done against the contingency that it may happen. There has to be an uncertainty about the risk. Insurance is relevant only if there are uncertainties. If there is no uncertainty about the occurrence of an event, it cannot be insured against. In the case of a human being, death is certain, but the time of death is uncertain. In the case of a person who is T.Y.B.B.I. SEMESTER VI 5
  6. 6. LIFE INSURANCE - KOTAK MAHINDRA terminally ill, the time of death is not uncertain, though not exactly known. He cannot be insured. Insurance does not protect the asset. It does not prevent its loss due to the peril. The peril cannot be avoided through insurance. The peril can sometimes be avoided, through better safety and damages control management. Insurance only tries to reduce the impact of the risk on the owner of the asset and those who depend on that asset. It only compensates the losses – and that too, not fully. Only economic consequences can be insured. If the loss is not financial, insurance may not be possible. Examples of non-economic losses are love and affection of parents, leadership of managers, sentimental attachments to family heirlooms, innovative and creative abilities, etc. LIFE INSURANCE MEANING T.Y.B.B.I. SEMESTER VI 6
  7. 7. LIFE INSURANCE - KOTAK MAHINDRA Life Insurance Is a Contract whereby the insurer in consideration of a premium undertakes to pay a certain sum of money, either on the death of the insured or on the expiry of a certain period, whichever is earlier In life insurance; risk to human life is covered .this risk may be in the form of accident or death. A person may or may not meet with an accident. Death is certain to happen but when it will happen is uncertain. Thus, due to accident or death of a person his dependants will suffer financially. Life Insurance provides certainty against these uncertainties Hence, in life insurance actually an ‘assurance’ is given by the insurance company that it will pay a certain sum of money either on death of the assured or maturity, whichever occurs earlier Under whole-life policy, money is payable at the death of assured (policy- holder) and under endowment policy, money is payable on the assureds death or on the maturity of the policy, whichever occurs earlier. T.Y.B.B.I. SEMESTER VI 7
  8. 8. LIFE INSURANCE - KOTAK MAHINDRA FEA TURES OF LIFE INSURANCE 1. Almost all life policies are long term. Most of them are for a term of 15 years or more. 2. Sum of compensation is fixed. Unlike general insurance, compensation does not depend on damage caused to the subject matter. Compensation, which is an assured, has to be paid either on death of assured or after maturity, whichever is earlier. 3. At times, amount of policy may be collected by the survivors of the assured in case of his death. 4. Life insurance policy may be surrendered by the assured before its maturity. 5. A person can take any number of life insurance policies and each and every policy is liable to pay compensation, provided the other conditions are met. 6. Nomination: in life insurance, the assured can nominate another person who is entitled to receive the sum assured on his death. T.Y.B.B.I. SEMESTER VI 8
  9. 9. LIFE INSURANCE - KOTAK MAHINDRA 7. Assignment: a life insurance policy can be assigned to another person (the assignee). The assignee then gets the same rights as the policyholder. ESSENTIALS OF A VALID LIFE INSURANCE CONTRACT 1) General elements of a valid contract: Like valid offer acceptance of an offer, competent parties, consideration, legal purpose etc. must be fulfilled. 2) Special element of a valid contract of insurance: (a) Utmost good faith: both the parties should disclose all Material facts. T.Y.B.B.I. SEMESTER VI 9
  10. 10. LIFE INSURANCE - KOTAK MAHINDRA (b) Insurable interest: the person taking out a policy on his own life has insurance interest but in case he wants to take a policy on another person’s life, then he should have insurable interest in the other’s life. Moreover, insurable interest must exist only at the time of taking out the policy and need not exist at the Time of maturity of the policy. 3) Warranties: Are ascertaining specific conditions added to the contract. These warranties are over and above the basic terms of the policy. They must be mutually agreed upon by both the parties. Any breach of a warranty by either party can nullify the contract. Warranties may be express (stated openly) or implied (hidden). 4) Terms of policy: Are the specific terms and conditions. Viz. the period of time covered, the nature of risk, premium amount, policies amount etc. which is agreed upon by both the parties. All these terms must be strictly observed by both the parties. Both the parties are bound by these terms. Any breach of any one of the given conditions by either party can render the insurance contract (null and void) i.e. not enforceable in the court of law. T.Y.B.B.I. SEMESTER VI 10
  11. 11. LIFE INSURANCE - KOTAK MAHINDRA ROLES OF LIFE INSURANCE Risks and uncertainties are part of life's great adventure -- accident, illness, theft, natural disaster - they're all built into the working of the Universe, waiting to happen. Role 1: Life insurance as "Investment" Insurance is an attractive option for investment. While most people recognize the risk hedging and tax saving potential of insurance, many are not aware of its advantages as an investment option as well. Insurance products yield more compared to regular investment options, and this is besides the added incentives (read bonuses) offered by insurers. You cannot compare an insurance product with other investment schemes for the simple reason that it offers financial protection from risks, something that is missing in non-insurance products. In fact, the premium you pay for an insurance policy is an investment against risk. Thus, before comparing with other schemes, you must accept that a part of the total amount invested in life insurance goes towards providing for the risk cover, while the rest is used for savings. In life insurance, unlike non-life products, you get maturity benefits on survival at the end of the term. In other words, if you take a life insurance policy for 20 years and survive the term, the amount invested as premium in the policy will come back to you with added returns. In the unfortunate event of death within the tenure of the policy, the family of the deceased will receive the sum assured. T.Y.B.B.I. SEMESTER VI 11
  12. 12. LIFE INSURANCE - KOTAK MAHINDRA Now, let us compare insurance as an investment options. If you invest Rs 10,000 in PPF, your money grows to Rs 10,950 at 9.5 per cent interest over a year. But in this case, the access to your funds will be limited. One can withdraw 50 per cent of the initial deposit only after years. The same amount of Rs 10,000 can give you an insurance cover of up to approximately Rs 5-12 lakhs (depending upon the plan, age and medical condition of the life insured, etc) and this amount can become immediately available to the nominee of the policyholder on death. Thus insurance is a unique investment avenue that delivers sound returns in addition to protection. Role 2: Life insurance as "Risk cover" First and foremost, insurance is about risk cover and protection - financial protection, to be more precise - to help outlast life's unpredictable losses. Designed to safeguard against losses suffered on account of any unforeseen event, insurance provides you with that unique sense of security that no other form of investment provides. By buying life insurance, you buy peace of mind and are prepared to face any financial demand that would hit the family in case of an untimely demise. To provide such protection, insurance firms collect contributions from many people who face the same risk. A loss claim is paid out of the total premium collected by the insurance companies, who act as trustees to the monies. Insurance also provides a safeguard in the case of accidents or a drop in income after retirement. An accident or disability can be devastating, and an insurance T.Y.B.B.I. SEMESTER VI 12
  13. 13. LIFE INSURANCE - KOTAK MAHINDRA policy can lend timely support to the family in such times. It also comes as a great help when you retire, in case no untoward incident happens during the term of the policy. With the entry of private sector players in insurance, you have a wide range of products and services to choose from. Further, many of these can be further customized to fit individual/group specific needs. Considering the amount you have to pay now, it's worth buying some extra sleep. Role 3: Life insurance as "Tax planning" Insurance serves as an excellent tax saving mechanism too. The Government of India has offered tax incentives to life insurance products in order to facilitate the flow of funds into productive assets. Under Section 88 of Income Tax Act 1961, an individual is entitled to a rebate of 20 per cent on the annual premium payable on his/her life and life of his/her children or adult children. The rebate is deductible from tax payable by the individual or a Hindu Undivided Family. This rebate is can be availed up to a maximum of Rs 12,000 on payment of yearly premium of Rs 60,000. By paying Rs 60,000 a year, you can buy anything upwards of Rs 10 lakhs in sum assured. (Depending upon the age of the insured and term of the policy) This means that you get an Rs 12,000 tax benefit. The rebate is deductible from the tax payable by an individual or a Hindu Undivided Family. MYTH BUSTERS what you should know about life insurance T.Y.B.B.I. SEMESTER VI 13
  14. 14. LIFE INSURANCE - KOTAK MAHINDRA Myth 1: Insurance is for tax saving There’s always this rush to buy insurance policies towards the end of the financial year, making one wonder if the tax-saving purpose of life insurance has not overshadowed its other roles. Yes, the tax benefits associated with life insurance policies do help make the investment more attractive. The Public Provident Fund also offers the 20% tax rebate under section 88 of the Income Tax Act, 1961, as do small saving schemes like post office deposits and national savings certificates. You may also avail of Tax benefits under section 80CCC with certain plans. And there are other investment options that give you higher returns than insurance. But these don't offer you security, the risk cover that helps you overcome the uncertainties of life. The primary function of life insurance is to cover you against financial losses arising out of sudden death or disability. It also offers returns and tax savings. Life insurance, as an instrument, is hence a good marriage of risk cover, returns and tax benefits. Myth 2: Insurance does not give good returns Insurance is different from routine investment options. A fixed deposit or even a National Savings Certificate may apparently fetch more returns than a life insurance policy. But that's not a fair straight-line comparison. If monetary returns are evaluated in isolation, a fixed deposit (FD) offering 9.5% might look very good in this depressed market. But insurance offers other benefits along with returns. T.Y.B.B.I. SEMESTER VI 14
  15. 15. LIFE INSURANCE - KOTAK MAHINDRA Look at security for instance. If you invest in an FD and happen to die, your nominee can claim only the amount of the FD. If you live, you will get back the sum of the FD with the desired interest. LIFE INSURANCE – DO’S AND DON’TS DO  Do find out if you have death-in-service benefits Through your job and what the level of cover is.  Do remember that (with some exceptions) you have a’ cooling-off’ period of 30 days during Which you can cancel a policy.  Do review your life insurance regularly, Particularly when your circumstances change.  Do decide what, if any, extra cover you need And get information on the type of policies that Meet your needs.  Do shop around, costs can vary widely For the same level of cover.  Do consider giving up smoking. After one T.Y.B.B.I. SEMESTER VI 15
  16. 16. LIFE INSURANCE - KOTAK MAHINDRA Year, or in some cases two, many insurance Companies will give you non-smoker races. This Could cut your premium by half, even though You are a bit older. DON’T  Don’t cash in an existing policy in order to take Out a new one unless you have a good reason. The cost of any new cover may be higher than The policy you already have because you are Older. You might also not be able to get new Cover if your occupation or health has changed In the meantime.  Don’t buy insurance that you don’t need or Already have. Kotak Mahindra Old Mutual Life Insurance Ltd. Old mutual plc is a London-listed fortune 500 international financial services group focusing on asset gathering and asset management. At 31 December 2005, old mutual had more than 7 million life assurance policies, 3.6 million T.Y.B.B.I. SEMESTER VI 16
  17. 17. LIFE INSURANCE - KOTAK MAHINDRA banking customers and over 550,000 general insurance policies. Its funds under management exceeded $310 billion. The group has a substantial presence in the UK, US and South African markets, it further expanded its European presence through the acquisition of skandia in early 2006. Established in 1984, the Kotak mahindra group has long been one of India’s most reputed financial organizations. Kotak mahindra today is one of India’s leading financial solutions, offering complete financial solutions that encompass every sphere of life. The group has a net worth of over Rs. 2,840 crore, employs around 7,800 people in its various business and has a distribution network of branches, franchisees, representative offices and satellite offices across 264 cities and towns in India and offices in New York, London, Dubai and Mauritius. The group services over 1.6 million customer accounts. Kotak Mahindra Old Mutual Life Insurance is a 76:24 joint venture between Kotak Mahindra Bank Ltd. and Old Mutual plc. Kotak Mahindra Old Mutual Life Insurance is one of the fastest growing insurance companies in India and has shown remarkable growth since its inception in 2001. Old Mutual, a company with 160 years experience in life insurance, is an international financial services group listed on the London Stock Exchange and included in the FTSE 100 list of companies, with assets under management worth $ 400 Billion as on 30th June, 2006. For customers, this joint venture translates into a company that combines international expertise with the understanding of the local market. T.Y.B.B.I. SEMESTER VI 17
  18. 18. LIFE INSURANCE - KOTAK MAHINDRA At Kotak Life Insurance, we aim to help customers take important financial decisions at every stage in life by offering them a wide range of innovative life insurance products, to make them financially independent. The joint venture translates into a company, which combines international expertise in insurance, advice and fund management with an understanding of the local markets. KOTAK TERM PLAN Smart Protection for Your Family MEANING Kotak Term Plan is a pure risk product that aims to cover your life at a nominal cost. You may want to take this plan to cover your outstanding debts like a mortgage, a home loan etc. Since this is a pure risk cover product, there are no maturity benefits payables on survival. This is a non-participating plan. WHO CAN AVAIL OF THIS PLAN? How old do you have to be to avail of this plan? Minimum age - 18 years Maximum age - 60 years For what term can I avail of this plan? 10 - 30 years for regular premium 5 - 30 years for single premium What is the minimum premium that I need to pay and at what intervals can I pay them? Mode Amount Quarterly Rs.540 T.Y.B.B.I. SEMESTER VI 18
  19. 19. LIFE INSURANCE - KOTAK MAHINDRA Half Yearly Rs.1055 Annually Rs.2000 Single Premium Rs.10000 What is the maximum age that the plan can cover you till? 70 years KEY FEATURES  Accidental Death Benefit This benefit provides an additional amount (over and above the basic sum assured) to the beneficiary in the event of the accidental death of the life insured. The maximum cover available under this rider is equal to the basic Sum assured (subject to a maximum of Rs.10 lakhs.) T.Y.B.B.I. SEMESTER VI 19
  20. 20. LIFE INSURANCE - KOTAK MAHINDRA  Permanent Disability Benefit This benefit can be added to your basic life insurance policy to provide financial support in case of disability due to an accident. The amount payable under this benefit would be paid out as an annuity. The maximum permanent disability benefit that you can avail of is equal to the basic sum assured (subject to maximum of Rs.10 lakhs).  Critical Illness Benefit This benefit can be added to your basic life insurance policy to provide financial support in the event of a medical emergency. On the first occurrence of critical illness during the term of the policy, you would receive a portion of the sum assured to reduce your financial burden in this emergency. T.Y.B.B.I. SEMESTER VI 20
  21. 21. LIFE INSURANCE - KOTAK MAHINDRA ADVAN TAGES • It is a low-cost insurance plan. • You can choose between a regular premium payment option and a single premium payment option. In case you opt for the regular premium payment option, you may pay your premiums either annually, or in half yearly or quarterly installments. • Your Kotak Term Plan can be converted into any other plan offered by Kotak Life Insurance (except for another Term plan) provided there are at least 5 years before cover ceases. • In case you forget to pay your premium by the due date, you are entitled to a grace period of 30 days from the date of unpaid premiums. • In case of a financial emergency, you have the option to surrender the policy provided you have taken the single premium payment option. TAX BENEFITS Section 80C, 10(10D) of Income Tax Act would apply. Premiums paid for Critical Illness Benefit qualify for benefits under Section 80D. These benefits are as per the currently prevailing tax regulations and it is advised to consult your tax advisor for details. HOW DOES THIS PLAN WORK? To explain, how this plan works…Mr. Sanjay Gupta, a 30-year-old male, decides to buy the Kotak Term Plan for a sum assured of Rs.10, 00,000 for a 10 T.Y.B.B.I. SEMESTER VI 21
  22. 22. LIFE INSURANCE - KOTAK MAHINDRA year term. The annual premium that Mr.Gupta’s pays is Rs.3, 747 annually. In the event of his unfortunate death during the next ten years, his family would receive Rs.10, 00,000. In the illustration, some benefits are guaranteed and some are variable. Guaranteed Returns are marked "guaranteed" in the illustration. Variable returns are shown at two different rates of assumed future returns. These assumed rates of return are not guaranteed and they are not the upper or lower limits of what you might get back .The actual return may be different depending on a number of factors including future investment performance ON MATURITY OF THE POLICY Since this is a pure risk cover plan, there are no maturity benefits. EXCLUSIONS In case the life insured commits suicide within 1 (one) year of the plan, no benefits outlined in the plan would be payable. The Accidental Death Benefit, Permanent Disability Benefit & Critical Illness Benefit would not be paid out in the following circumstances: a) Self inflicted injuries, suicide, insanity, immorality, committing any breach of law or being under the influence of drugs, liquor etc. b) When the life insured is engaged in aviation or aeronautics other than as a passenger on a licensed commercial aircraft operating on a scheduled route. T.Y.B.B.I. SEMESTER VI 22
  23. 23. LIFE INSURANCE - KOTAK MAHINDRA c) Due to injuries from war (whether war is declared or not), invasion, hunting, other dangerous hobbies or activities, or having been on duty in military, Para-military, security or police organization. PROHIBITION OF REBATES Section 41 of the Insurance act 1938, states... (1) No person shall allow or offer to allow, either directly or indirectly, as an inducement to any person to take out or renew or continue an insurance in respect of any kind of risk relating to lives or property in India, any rebate of the whole or part of the commission payable or any rebate of the premium shown on the policy, nor shall any person taking out or renewing or continuing a policy accept any rebate, except such rebate as may be allowed in accordance with the published prospectuses or tables of the insurer. (2) Any person making default in complying with the provision of this section shall be punishable with fine, which may extend to five hundred rupees. KOTAK MONEY BACK PLAN Live For Today and Plan for Tomorrow MEANING T.Y.B.B.I. SEMESTER VI 23
  24. 24. LIFE INSURANCE - KOTAK MAHINDRA The Kotak Money Back Plan not only covers your life, it also assures you a certain percent of the sum assured as cash payment at regular intervals of every 5 years. It is a savings plan with the added advantage of life cover and regular cash inflow. This plan is ideal for planning special moments like a wedding, your child's education or purchase of an asset etc. This is a participating plan with profits. WHO CAN AVAIL OF THIS PLAN? How old do you have to be to avail of this plan? Minimum age- 18 years Maximum age- 60 years For what term can I avail of this plan? 15, 20 & 25 years What is the maximum age that the plan can cover you till? 75 years T.Y.B.B.I. SEMESTER VI 24
  25. 25. LIFE INSURANCE - KOTAK MAHINDRA KEY FEATURES • Term Benefit/ Preferred Term Benefit In the event of death during the term of this benefit, the beneficiary would receive an additional death benefit amount, which is over and above the sum assured. The maximum Term Benefit you can avail of is equal to the basic sum assured. Where the term benefit cover applied for is more than Rs 10 lakhs, better rates may apply, subject to meeting eligibility requirements. • Accidental Death Benefit This benefit provides an additional amount (over and above the sum assured) to the beneficiary in the event accidental death of the life insured. The maximum cover available under this benefit is equal to the basic sum assured (subject to a maximum of Rs. 10 lakhs). • Permanent Disability Benefit This benefit can be added to the basic life insurance plan to provide financial support in case of permanent disability due to an accident. The amount payable under this benefit would be paid out as an annuity. The maximum permanent disability benefit that you can avail of is equal to the basic sum assured (subject to a maximum of Rs.10 lakhs). • Critical Illness Benefit T.Y.B.B.I. SEMESTER VI 25
  26. 26. LIFE INSURANCE - KOTAK MAHINDRA This benefit can be added to the basic life insurance plan to provide financial support in the event of medical emergencies. On the first occurrence of critical illness during the term of the policy, you would receive a portion of the sum assured to reduce your financial burden in this emergency. • Life Guardian Benefit This benefit can be availed of, only in case where the life insured and the proposer are two different individuals. In case of the unfortunate death of the proposer, this benefit keeps the policy alive by waiving all future premiums on the policy. • Accidental Disability Guardian Benefit In case the proposer is permanently disabled as a result of an accident, this benefit keeps the policy alive by waiving all future premiums on the policy. ADVANTAG ES  The plan not only covers your life but also provides you with a survival benefit payout every 5 years.  In the unfortunate event of death of life insured, the beneficiary would receive the death benefit. The death benefit keeps increases by 7% of the sum assured every year.  On maturity, you would receive the sum of the Survival Benefit, Bonus addition and guaranteed addition. T.Y.B.B.I. SEMESTER VI 26
  27. 27. LIFE INSURANCE - KOTAK MAHINDRA  The amount available in the Accumulation Account is invested in various financial instruments (as per IRDA regulations) so your money works hard for you.  The Automatic Cover Maintenance facility ensures the policy remains in force even if you miss premium payments. This facility is available after the first three years of the term.  You have the benefit of a 15-day free look period.  You have the option of paying premiums quarterly, half yearly or yearly. TAX BENEFITS Section 80C, 10(10D) of Income Tax Act would apply. Premiums paid for Critical Illness Benefit qualify for benefits under Section 80D. These benefits are as per the currently prevailing tax regulations and you are advised to consult your tax advisor for details. T.Y.B.B.I. SEMESTER VI 27
  28. 28. LIFE INSURANCE - KOTAK MAHINDRA HOW DOES THIS PLAN WORK? Mr. Sanjay Gupta, 30 years old, decides to buy a Kotak Money Back Plan for a sum assured of Rs.5, 00,000 and for a term of 20 years. His annual premium and the payouts are outlined below. Annual Premium Rs.34,124 Survival Benefit: After 5 years Rs.100,000 After 10 years Rs.100,000 After 15 years Rs.100,000 At the end of the 20 years Balance Sum Assured Rs.200,000 Guaranteed addition Rs.150,000 Bonus Addition Variable a) What would Mr.Gupta receive on maturity of the plans? T.Y.B.B.I. SEMESTER VI 28
  29. 29. LIFE INSURANCE - KOTAK MAHINDRA Mr.Gupta would get cash flows in year 5, 10 and 15 as mentioned above. Assuming that the Accumulation Account grows at a rate of 6%, the payout on maturity would be Rs.510, 900. At a growth rate of 10%, the maturity amount payable would be Rs.872, 600. The table below shows the details of the payout. @6% @10% Balance Sum Assured Rs.200,000 Rs.200,000 Guaranteed addition Rs.150,000 Rs.150,000 Bonus Addition Rs.160,900 Rs.522,000 Final payout at the end of 20 years Rs.510,900 Rs.872,600 ON MATURITY OF THE PLAN On maturity, you would receive the sum of the Survival benefit, guaranteed addition and Bonus addition. EXCLUSIONS In case the life insured commits suicide within 1 (one) year of the plan, no benefits outlined in the plan would be payable. The Accidental Death Benefit, Permanent Disability Benefit & Critical illness Benefit would not be paid out in the following circumstances: T.Y.B.B.I. SEMESTER VI 29
  30. 30. LIFE INSURANCE - KOTAK MAHINDRA (a) Self inflicted injuries, suicide, insanity, immorality, committing any breach of law or being under the influence of drugs, liquor etc. (b) When the life insured is engaged in aviation or aeronautics other than as a passenger on a licensed commercial aircraft operating on a scheduled route. (c) Due to injuries from war (whether war is declared or not), invasion, hunting, other dangerous hobbies or activities, or having been on duty in military, Para-military, security or police organization. PROHIBITION OF REBATES Section 41 of the Insurance Act, 1938 states: - (1) No person shall allow or offer to allow, either directly or indirectly, as an induce men to any person to take out or renew or continue an insurance in respect of any kind of risk relating to lives or property in India, any rebate of the whole or part of the commission payable or any rebate of the premium shown on the policy, nor shall any person taking out or renewing or continuing a policy accept any rebate, except such rebate as may be allowed in accordance with the published prospectuses or tables of the insurer. (2) Any person making default in complying with the provision of this section shall be punishable with fine, which may extend to five hundred rupees. T.Y.B.B.I. SEMESTER VI 30
  31. 31. LIFE INSURANCE - KOTAK MAHINDRA KOTAK ENDOWMENT PLAN Savings cum Protection Plan to Ensure an Independent Future MEANING Kotak Endowment Plan is a protection plan that covers your life and at the same time ensures that your money does not lie idle. It invests a portion of your premium in financial instruments and ensures a considerable growth in savings. This is a participating plan (with profits). WHO CAN AVAIL OF THIS PLAN? How old do you have to be to avail of this plan? Minimum age - 18 years Maximum age - 65 years For what term can I avail of this plan? 10-30 years What is the maximum age that the plan can cover you till? 75 years T.Y.B.B.I. SEMESTER VI 31
  32. 32. LIFE INSURANCE - KOTAK MAHINDRA KEY FEATURES  Term Benefit / Preferred Term Benefit In the event of death during the term of this benefit, the beneficiary would receive an additional death benefit amount, which is over and above the sum assured. The maximum term benefit you can avail of is equal to the basic sum assured. Where the Term Benefit cover applied for is more than Rs.10 lakhs, better rates may apply, subject to meeting eligibility requirements.  Accidental Death Benefit This benefit provides an additional amount (over and above the basic sum assured) to the beneficiary in the event of the accidental death of the life insured. The maximum cover available under this benefit is equal to the basic sum assured (subject to a maximum of Rs.10 lakhs).  Permanent Disability Benefit This benefit provides financial support in case of your permanent disability due to an accident. The amount payable is over and above the basic sum assured and would be paid out as an annuity. The maximum Permanent Disability Benefit T.Y.B.B.I. SEMESTER VI 32
  33. 33. LIFE INSURANCE - KOTAK MAHINDRA that you can avail of is equal to the basic sum assured (subject to a maximum of Rs.10 lakhs).  Critical Illness Benefit This benefit can be taken with the basic life insurance policy to provide financial support in the event of medical emergencies. On the first occurrence of critical illness during the term of the policy, you would receive a portion of the sum assured to reduce your financial burden in this emergency.  Life Guardian Benefit This benefit can be availed of, only in a case where the life insured and the proposer are two different individuals. In case of the unfortunate death of the proposer, this benefit keeps the policy alive by waiving all future premiums on the policy.  Accidental Disability Guardian Benefit In case the proposer is permanently disabled as a result of an accident, this benefit keeps the policy alive by waiving all future premiums on the policy. This benefit is available also where the life insured is the proposer. ADVANTAGES • On maturity, you would receive the sum assured plus the bonus addition. Bonus addition is the amount in the Accumulation Account, in excess of the sum assured. T.Y.B.B.I. SEMESTER VI 33
  34. 34. LIFE INSURANCE - KOTAK MAHINDRA • The amount available in the Accumulation Account is invested in various financial instruments (as per IRDA regulations) so your money works harder for you. • The Automatic Cover Maintenance facility ensures the policy remains in force even if you miss premium payments. This facility is available after the first three years of the term. • On maturity, you would receive the sum assured plus the bonus addition. • The amount available in the Accumulation Account is invested in various financial instruments (as per IRDA regulations) so your money works harder for you. • The Automatic Cover Maintenance facility ensures the policy remains in force even if you miss premium payments. This facility is available after the first three years of the term. • You can take a loan against your policy, after the policy has been in force for at least three years. • You have the option of paying premiums quarterly, half yearly or yearly. You also have the flexibility to pay premiums through the full term of the policy or pay it for a fixed term of 3, 5, 7, 10 or 15 years. • You have the benefit of a 15-day free look period. TAX BENEFITS T.Y.B.B.I. SEMESTER VI 34
  35. 35. LIFE INSURANCE - KOTAK MAHINDRA Section 80C, 10(10D) of Income Tax Act would apply. Premiums paid for Critical Illness Benefit qualify for benefits under Section 80D. These benefits are as per the currently prevailing tax regulations and you are advised to consult your tax advisor for details. HOW DOES THIS PLAN WORK? Mr. Sanjay Gupta, who is 30 years old, decides to buy a Kotak Endowment Plan for a sum assured of Rs. 5, 00,000 for a 20-year term for his wife, who is aged 28. Mr. Gupta decides to take the Life Guardian Benefit as a rider to the plan. He does this to provide enhanced security and protection to his wife. The annual premiums paid by Mr. Gupta are as follows Amount (Rs.) Kotak Endowment Plan Premium 22,552 Life Guardian Benefit Premium 1,106 Total Annual Premium Paid 23,658 ON MATURITY OF THE POLICY On maturity Sanjay Gupta would receive the sum assured or Accumulation Account, whichever is higher. LIMITED PREMIUM PAYMENT OPTION T.Y.B.B.I. SEMESTER VI 35
  36. 36. LIFE INSURANCE - KOTAK MAHINDRA Your life is uncertain and with rising costs and economic instability, you may not be sure about your future incomes. You need a product that not only offers you a cover for the term that you want, but also, at the same time gives you the flexibility to choose a premium term such that you pay premiums during the period that you are certain of a secure income. The Limited Premium Payment (LPP) option in the Kotak Endowment Plan: 1. Covers you for a term (years) of your choice. 2. At the same time does not burden you with the liability to pay premiums for that entire term. • You to Bonus Addition for the entire term of the plan. FOR WHAT TERM CAN I AVAIL OF THE PLAN You may take a policy of term raging from 10 to 30 years. However, you may opt for a limited premium payment term of 3, 5, 7, 10, or 15 years. The Premium payment term must be less than the policy term. HOW DOES LPP OPTION WORK? Jiten is a TV actor, aged 30 years. He wants to buy the Kotak Endowment Plan of Rs.1crore for 15 years. However, he is not too sure if his income would remain the same for 15 years, to be able to afford the premiums. But Jiten is not worried because with the Kotak Endowment Plan, he can choose to limit the premium paying term on his policy to 3 years. Thus he pays T.Y.B.B.I. SEMESTER VI 36
  37. 37. LIFE INSURANCE - KOTAK MAHINDRA premium for 3 years and gets protection and Bonus Addition for a Period of 15 years. In the event of maturity/death, Jiten/ his beneficiaries would receive the sum Assured plus the bonus addition (if any). BENEFITS OF LPP OPTION • You can pay off all premiums over a short period of time and be free from paying premiums for the rest of the policy term, while enjoying the life cover for the entire policy term. • Enjoy the benefits of bonus additions for the entire term of the policy. EXCLUSION In case the life insured commits suicide within 1 (one) year of the plan, no benefit outlined in the plan would be payable. The Accidental Death Benefit, Permanent Disability Benefit & Critical Illness Benefit would not be paid out in the following circumstances: (a) Self-inflicted injuries, suicide, insanity, immorality of the proposer, or his committing any breach of law or being under the influence of drugs, liquor etc. (b)When the life insured is engaged in aviation or aeronautics other than as a passenger on a licensed commercial aircraft operating on a scheduled route. (c) Due to injuries from war (whether war is declared or not), invasion, hunting, other dangerous hobbies or activities, or having been on duty in military, Para-military, security or police organization. T.Y.B.B.I. SEMESTER VI 37
  38. 38. LIFE INSURANCE - KOTAK MAHINDRA PROHIBITION OF REBATES Section 41 of the Insurance act, 1938 states:- 1. No person shall allow or offer to allow, either directly or indirectly, as an inducement to any person to take out or renew or continue an insurance in respect of any kind of risk relating to lives or property in India, any rebate of the whole or part of the commission payable or any rebate of the premium shown on the policy, nor shall any person taking out or renewing or continuing a policy accept any rebate, except such rebate as may be allowed in accordance with the published prospectuses or tables of the insurer. 2. Any person making default in complying with the provision of this section shall be punishable with fine, which may extend to five hundred rupees. T.Y.B.B.I. SEMESTER VI 38
  39. 39. LIFE INSURANCE - KOTAK MAHINDRA KOTAK RETIREMENT INCOME PLAN So you’re Tomorrow Is Better Than Your Today. MEANING The Kotak Retirement Income Plan is a savings plan designed to meet your post-retirement needs. It is a plan that gives you "Jeene ki azaadi". It gives you the choice to remain independent even after retirement. The Kotak Retirement Income Plan is a participating plan. The plan comes in two forms: (I) With Cover (II) Without Cover. WHO CAN AVAIL OF THIS PLAN? T.Y.B.B.I. SEMESTER VI 39
  40. 40. LIFE INSURANCE - KOTAK MAHINDRA How old do you have to be to avail of this plan? Minimum age - 18 years Maximum age - 60 years For what term can you choose to pay the premiums? 5 yrs - 30 yrs How old do you have to be to receive your annuity? Minimum Age - 45 yrs Maximum Age – 65 yrs At what intervals can you pay the premium? Quarterly Half Yearly Annually KEY FEATURES  Term/ Preferred Term Benefit In the event of death during the term of this benefit, the beneficiary would receive an additional Death Benefit amount, which is over and above the Sum T.Y.B.B.I. SEMESTER VI 40
  41. 41. LIFE INSURANCE - KOTAK MAHINDRA Assured. The maximum amount of benefit you can avail of is equal to the Basic Sum Assured. Where the Term Benefit cover applied for is more than Rs.10 lakhs, better rates may apply, subject to meeting eligibility requirements.  Accidental Death Benefit In the event of death as a result of an accident during the term of this benefit, your beneficiary will receive an additional benefit, which is over and above the Basic Sum Assured. The maximum Accidental Death Benefit you can avail of is equal to the Basic Sum Assured (subject to a maximum of Rs. 10 lakhs).  Critical Illness Benefit In case of the first occurrence of a critical illness during the term of this benefit, the Critical Illness Benefit Sum Assured will be added to the Supplementary Accumulation Account. Once the addition is made to the Supplementary Accumulation Account, the Basic Sum Assured would reduce by the Critical Illness Benefit Sum Assured, the Basic Accumulation Account would reduce in the same proportion and future premiums for the plan would be recalculated based on the reduced Sum Assured. . The maximum Critical Illness Benefit Sum Assured you can avail of is equal to the Basic Sum Assured (subject to a limit of Rs.20 lakhs).  Permanent Disability Benefit If you meet with an accident during the term of this benefit, and are permanently disabled, you would be entitled to an additional amount, which is over and above the Basic Sum Assured. This amount will be added to the Supplementary Accumulation Account and will be available on retirement. The T.Y.B.B.I. SEMESTER VI 41
  42. 42. LIFE INSURANCE - KOTAK MAHINDRA maximum benefit available under this plan is equal to the Basic Sum Assured (subject to a maximum of Rs.10 lakhs).  Life Guardian Benefit In case of the unfortunate death of the proposer, this benefit keeps the policy alive by waiving all future premiums on the policy. This is available only where the proposer and the life insured are two different individuals  Accidental Disability Guardian Benefit In case the proposer is permanently disabled as a result of an accident, this benefit keeps the policy alive by waiving all future premiums on the policy. This is available only when the proposer and the life insured are two different individuals ADVANTAGES  You can choose to retire at any age between 45 yrs and 65 yrs.  On Retirement: You may take a lump sum in cash of up to a third Basic Sum Assured or Accumulation Account, whichever is higher; and the balance of the benefit you are eligible for will be used to buy an annuity of your choice.  Annuity Options: You may buy an annuity either from Kotak Life Insurance (subject to the choice and rates available at that time), or from any other insurer. T.Y.B.B.I. SEMESTER VI 42
  43. 43. LIFE INSURANCE - KOTAK MAHINDRA  You can make lump-sum injections into your policy at any time before retirement (such lump-sum injections during a year may not exceed 25% of the Basic Sum Assured). A Supplementary Accumulation Account will be created for this, and will be paid out in the same manner as other benefits.  You may exercise the option of paying premiums from the Supplementary Accumulation Account, created for "lump-sum injections", if the need arises.  For a "With Cover" plan, you have the facility of Automatic Cover Maintenance, which ensures that the cover remains in force even when you miss the premium payments. This facility is available after the first three years of the term.  You have the option of paying premiums in quarterly, half-yearly or yearly installments.  You have the facility of a 15-day free look period TAX BENEFITS Section 80C, 10(10D) of Income Tax Act would apply. Premiums paid for Critical Illness Benefit qualify for benefits under Section 80D. (a)What Happens In The Event Of The Death Of The Life Insured Before Retirement? T.Y.B.B.I. SEMESTER VI 43
  44. 44. LIFE INSURANCE - KOTAK MAHINDRA For the "With Cover" Plan: The benefits to the beneficiary will be, greater of: (a) Sum Assured less all the premiums due but not paid, and (b) Accumulation Account. This is used to buy an annuity, and provide commutation benefit, in accordance with the beneficiary's choice. For the "Without Cover" Plan: The benefits to the beneficiary will be, greater of: (a) Return of premiums (without interest), and (b) Accumulation Account. This will be used to buy an annuity, and provide commutation benefit, in accordance with the beneficiary's choice. HOW DOES THIS PLAN WORK? Mr. Mehta is a 35-year-old man, who wishes to retire at age 60. He takes the Kotak Retirement Income Plan with a Basic Sum Assured of Rs. 3 lakhs. He considers the following two options; "With Cover" - Option A, and "Without Cover" - Option B. Option A Option B Kotak Retirement Income Plan premium Rs 9,750 Rs 9,060 Term Benefit premium (3 lakhs of cover) Rs 1,818 T.Y.B.B.I. SEMESTER VI 44
  45. 45. LIFE INSURANCE - KOTAK MAHINDRA Accidental Death Benefit premium (3 lakhs of cover) Rs 265 Total Annual Premium Paid Rs 11,568 Rs 9,325 (a) What is the benefit available to Mr. Mehta on retirement? Under Option A, Assuming that Mr. Mehta's Accumulation Account grows at 6% p.a, the fund available to him will be Rs. 4, 67,500. Assuming that it grows at 10%, then the fund available to him will be Rs. 8; 70,000.Mr. Mehta may commute up to a third in cash immediately, and buy an annuity with the remaining benefit. Under Option B, Assuming that Mr. Mehta's Accumulation Account grows at 6% p.a, the fund available to him will be Rs.4, 63,000. Assuming that it grows at 10%, then the fund available to him will be Rs. 8, 56,600. Mr. Mehta may commute up to a third in cash immediately, and buy an annuity with the remaining benefit. (b) What is the benefit available in the event of the unfortunate death of Mr. Mehta after 15 years? Under Option A, T.Y.B.B.I. SEMESTER VI 45
  46. 46. LIFE INSURANCE - KOTAK MAHINDRA Mr. Mehta's beneficiary will be eligible for the greater of Rs. 3 lakhs or the balance in the Accumulation Account. The balance in the Accumulation Account will be less than Rs. 3 lakhs even if the accumulation account grows at 10% per annum. He/she will also receive an additional Rs.3 lakhs under the "Term Benefit" as Mr. Mehta availed of this value-add by paying a nominal premium of Rs.1, 818 p.a, for it. The beneficiary may commute up to a third in cash immediately, and buy an annuity from the remaining benefit. Under Option B, Mr. Mehta's beneficiary will be eligible for Rs. 1, 95,400 if his Accumulation Account grows at 6% per annum, and Rs. 2, 75,600 if his Accumulation Account grows at 10% per annum. In the event that Mr. Mehta's death has been due to an accident, then his beneficiary will receive an additional Rs.3 lakhs under the "Accidental Death Benefit", as Mr. Mehta availed of this value-add by paying a minimal premium of Rs.265 p.a. for it. The beneficiary may commute up to a third in cash immediately, and buy an annuity with the remaining benefit. EXCLUSION In case the life insured commits suicide within 1 (one) year of the plan, no benefits outlined in the plan would be payable. The Accidental Death Benefit, Permanent Disability Benefit, Critical Illness Benefit & Kotak Accidental Disability Guardian Benefit would not be paid out in the following circumstances: T.Y.B.B.I. SEMESTER VI 46
  47. 47. LIFE INSURANCE - KOTAK MAHINDRA (a) Self inflicted injuries, suicide, insanity, immorality, committing any breach of law or being under the influence of drugs, liquor etc. (b) When the life insured is engaged in aviation or aeronautics other than as a passenger on a licensed commercial aircraft operating on a scheduled route. (c) Due to injuries from war (whether war is declared or not), invasion, hunting, mountaineering, motor racing of any kind, other dangerous hobbies or activities, or having been on duty in military, Para-military, security etc. PROHIBITION OF REBATES Section 41 of the Insurance Act, 1938 states: (1) No person shall allow or offer to allow, either directly or indirectly, as an inducement to any person to take out or renew or continue an insurance in respect of any kind of risk relating to lives or property in India, any rebate of the whole or part of the commission payable or any rebate of the premium shown on the policy, nor shall any person taking out or renewing or continuing a policy accept any rebate, except such rebate as may be allowed in accordance with the published prospectuses or tables of the insurer. (2) Any person making default in complying with the provision of this section shall be punishable with fine, which may extend to five hundred rupees. T.Y.B.B.I. SEMESTER VI 47
  48. 48. LIFE INSURANCE - KOTAK MAHINDRA 5 EASY STEPS TO BUYING A POLICY 1. Initially, calculate the exact amount of insurance that you need; 2. Decide which product suits you best based on your life stage and need, 3. Calculate the premium that you need to pay on the basis of the product that you have decided to buy; 4. Once you have decided on all the above parameters, get in touch with a Life Advisor at any of the Kotak Life Insurance branch offices. 5. The Life Advisor will assist you in filling up a proposal form. In addition to a proposal form, you need to submit some financial documents that are required in order to buy a policy. The Life Advisor will notify the list of financial documents required for the same. T.Y.B.B.I. SEMESTER VI 48
  49. 49. LIFE INSURANCE - KOTAK MAHINDRA Q3 RESULT Kotak Mahindra Old Mutual Life Insurance – Life Insurance RS.MILLION. Q3FY07 (3M) Q3FY06 (3M) Q2FY07 (3M) YTDFY07 (9M) YTDFY0 6 (9M) FY06 (12M) Gross premium income 2,132. 6 1, 209.7 1,6 78.5 5,04 7.7 2,578.4 6,2 18.5 Loss (175.7) (120.5) (169.0) (482.3) (420.1) (432.4) • Kotak Life Insurance (KLI) premium income grew 76% to Rs 2,132.6 mn in Q3FY07 from Rs. 1,209.7 mn in Q3FY06. • KLI has a network of 65 branches in 44 cities (44 branches as on March 06). • As on December 31, 2006 KLI had over 248,000 individual policies on books representing a basic sum assured of around Rs. 103.5 bn (excluding riders). Additionally, KLI had around 198 group policies covering over 324000 lives with an aggregate sum assured of around Rs 91.2bn. T.Y.B.B.I. SEMESTER VI 49
  50. 50. LIFE INSURANCE - KOTAK MAHINDRA SBI LIFE INSURANCE SBI Life Insurance is a joint venture between the State Bank of India and Cardiff SA of France. SBI Life Insurance is registered with an authorized capital of Rs 500 crore and a paid up capital of Rs 500 crores. SBI owns 74% of the total capital and Cardiff the remaining 26%. State Bank of India enjoys the largest banking franchise in India. Along with its 7 Associate Banks, SBI Group has the unrivalled strength of over 14,500 branches across the country, the largest in the world. Cardif is a wholly owned subsidiary of BNP Paribas, which is The Euro Zone’s leading Bank. BNP T.Y.B.B.I. SEMESTER VI 50
  51. 51. LIFE INSURANCE - KOTAK MAHINDRA Paribas is one of the oldest foreign banks with a presence in India dating back to 1860. Cardif is ranked 2nd worldwide in creditor’s insurance offering protection to over 35 million policyholders and net income in excess of Euro 1 billion mark. Cardif has also been a pioneer in the art of selling insurance products through commercial banks in France and 34 more countries. SBI Life Insurance’s mission is to emerge as the leading company offering a comprehensive range of Life Insurance and pension products at competitive prices, ensuring high standards of customer service and world class operating efficiency. SBI Life Insurance is uniquely placed as a pioneer to usher Bancassurance into India. The company hopes to extensively utilise the SBI Group as a platform for cross-selling insurance products along with its numerous banking product packages such as housing loans and personal loans. SBI’s access to over 100 million accounts provides a vibrant base to build insurance selling across every region and economic strata in the country The Entire Life Insurance Product Offered By Insurance Companies Are Different From Other Company. Let Us See How the Kotak’s Life Insurance Product Differ T.Y.B.B.I. SEMESTER VI 51
  52. 52. LIFE INSURANCE - KOTAK MAHINDRA from SBI’s Life Insurance Product. Kotak Money Back Plan Vs SBI Money Back Plan Points Kotak Money Back Plan SBI Money Back Plan Guarantee 5 years guaranteed survival benefit is payable. Different period 3 or 4 years guaranteed survival benefit. 15 year plan 25% of basic sum assured payable at 5th years. Same it to next 10th year. 50% to next 15th year. 10% at 3rd year 15% at 6th year 20% at 9th year. 25% at 12th year 45% at 15th year. 25 year plan 5th year - 15% 10th year - 15% 15th year - 15% 20th year - 15% 25th year - 40% 5th year - 10% 10th year - 15% 15th year - 20% 20th year - 25% 25th year - 55% + bonus Minimum age Minimum age of entry – 18 yrs. 15 years (same for all the plan) Maximum age Maximum age of entry – 60 years. Option 1-60 years. Option 2-55 years. Maximum maturity age 70 years 75 years Kotak Endowment Plan Vs SBI Endowment Plan POINTS KOTAK ENDOWMENT PLAN SBI ENDOWMENT PLAN Age Min.—18yrs Max.—65 yrs Min.—12yrs Max.—65 yrs T.Y.B.B.I. SEMESTER VI 52
  53. 53. LIFE INSURANCE - KOTAK MAHINDRA Entry Term Min.—10yrs Max.—30 yrs Min.—8yrs Max.--30 yrs Death Benefit In event of death nominee will receive basic sum assured or accumulated assured which ever is higher Sum assured + all bonuses. Premium Payment Regular premium payment. Regular premium payment & single premium payment. KOTAK PENSION PLAN VS SBI PENSION PLAN POINTS KOTAK PENSION PLAN SBI PENSION PLAN Plan Option Kotak pension plan offers us in three versions: - with cover, without cover, single premium. SBI pension plan offer in two option: - I:-pure option. II: - pension cum life cover. Age Entry Min. 18 yrs. Max. 55 yrs. Min 18 yrs. Max. 60yrs. Premium Min. Rs.10, 000 annually. Min.Rs.12, 000 Max. No limit Term Plan Min. Of 10 yrs. (single premium-5yrs.) Max. Of 30 yrs. Min. Of 10yrs. Max. Of 52 yrs. Top-Up- Premium Min. Rs.10,000 Min.Rs.1,000/- in multiple of Rs.100/- Max. Cumulative top up T.Y.B.B.I. SEMESTER VI 53
  54. 54. LIFE INSURANCE - KOTAK MAHINDRA premium(s) in a policy yrs is limited to twice the annualized premium during that policy yr. Maturity Age Min.:-45 yrs. Max.:- 75 yrs. Min.:-50 yrs. Max:-70 yrs. SURVEY FORM SHRI CHINAI COLLEGE OF COMMERCE & ECONOMICS Questionnaire for Survey of Kotak Mahindra – Life Insurance Name: Designation: - Contact No.:-__________ 1. Are You Aware Of Insurance? T.Y.B.B.I. SEMESTER VI 54
  55. 55. LIFE INSURANCE - KOTAK MAHINDRA Yes No 2. Which Company Do You Prefer? Private Public 3. Do You Have Life Insurance Plan Of Any Company? If Yes Than Which Co.______________________ 4. Do You Have Any Kotak Life Insurance Plan? ____________________________________ 5. Grade the Above Policy According To Your Needs from 1-10? Term Plan Money Back Plan Pension Plan Endowment Plan 6. At What Age you’ll prefer to take life Insurance Plan? _____________________________ 7. Give Your Comments On Kotak Mahindra Life Insurance? _______________________________________ Project Guide Prepared By Prof.Nishikant Jha Amit Panwar (Co-ordinator) (T.Y.B.B.I) T.Y.B.B.I. SEMESTER VI 55
  56. 56. LIFE INSURANCE - KOTAK MAHINDRA SURVEY RESULT 1. Market share of life Insurance company Market Share of Life Insurance Company Market Share (%) LIC 79.65 ICICI Prudential 5.73 Bajaj Allianz 4.19 SBI Life 2.24 HDFC Standard 1.81 Birla SunLife 1.05 Tata AIG 0.89 Max New York 1.02 Aviva 0.95 Kotak Mahindra 0.59 ING Vysya 0.57 Reliance Life 0.77 MetLife 0.32 Sahara Life 0.03 T.Y.B.B.I. SEMESTER VI 56
  57. 57. LIFE INSURANCE - KOTAK MAHINDRA Market Share (%) LIC ICICI Prudential Bajaj Allianz SBI Life HDFC Standard Birla SunLife Tata AIG Max New York Aviva Kotak Mahindra ING Vysya Reliance Life MetLife Sahara Life 2. Are You Aware Of Insurance? 78% YES OUT OF WHICH 70% ARE INSURED 22% NO YES Aware and having insurance NO 3. Which Company Do You Prefer? Public ---- 63% Private ---- 37% T.Y.B.B.I. SEMESTER VI 57
  58. 58. LIFE INSURANCE - KOTAK MAHINDRA 0 10 20 30 40 50 60 70 Public private Series1 4. Do You Have Life Insurance Plan Of Any Company? 1 Lic Others 0 20 40 60 80 Lic icici predential Sbi Kotak Others 5. Grade the Above Policy According To Your Needs from 1-10? Term Plan Money Back Pension Plan Endowment Plan 0 1 2 3 4 5 TermPlan Money BackPlan Endowment Plan Pension Plan Series1 Series2 Series3 T.Y.B.B.I. SEMESTER VI 58
  59. 59. LIFE INSURANCE - KOTAK MAHINDRA 6. At What Age you’ll prefer to take life Insurance Plan? 20-30 ---- 63% 30-40 ---- 30% 40-50 ---- 5% 50 & Above ---- 2% 20-30 30-40 40-50 50-above SURVEY REPORT I have conducted survey for the project which will give me a practical knowledge about insurance amongst general public. I have noticed that around 80% of the general public has been insured by LIC the basic reason behind this is that LIC is the public company and policy holders have faith in public company. T.Y.B.B.I. SEMESTER VI 59
  60. 60. LIFE INSURANCE - KOTAK MAHINDRA I have also noticed that customer is not much aware about kotak mahindra as insurance company. Because the company has not advertise themselves properly in the market which is the key for the success among its competitors. While doing survey I have also noticed some of the point which is very important for the kotak mahindra as well as for all the insurance companies conducting their business in India.  The LIC is the most leading companies in insurance sector having market share of around 79.63% which is the highest among all the insurance company in India. (fig.1.)  The second largest market share is of ICICI Predential having market share of around 5.73% business in India.  Whereas kotak mahindra share the 10th position of market share i.e. its business in amongst all 14th insurance companies in India.  It will take time for the kotak mahindra to establish fully in India to compete with all other insurance companies.  In the second figure we can see that almost 78% people are aware of insurance & out of which 70% are insured with some of the insurance company in India. (fig.2.)  Whereas, 22% are not aware of insurance.  In the third figure we can see that almost 63% like to be insured with the public company. Whereas 37% like to be insured with the private company. (fig.3.)  I have noticed that 78% are insured with LIC, 9% are insured with ICICI Predential that of 3% are insured with kotak mahindra. (fig.no.4.) T.Y.B.B.I. SEMESTER VI 60
  61. 61. LIFE INSURANCE - KOTAK MAHINDRA  Amongst the entire insurance product offered by kotak mahindra or by some other companies’ people are interested to take money back plan as its give guarantee of return of money in its maturity or death. (fig.no.5.)  Almost 63% are to be insured at the age of between 20-30 years.(FIG.NO.6) FAQ’S frequently asked questions? "Is there any policy where I can receive money during the tenure of the policy?" Yes, a Money Back Policy. This is an anticipated endowment policy with an additional feature of receiving a benefit at regular intervals during the tenure of the policy. The risk cover continues for the entire sum assured in spite of the installments already paid. If you outlive the policy, the balance sum assured along with accumulated bonus is paid back to you. For example, Kotak Money Back Plan. This is suitable for you if… • You plan to coincide the funds received from the policy with your future anticipated needs like a car, an overseas holiday, children's educational needs, marriage expenses, etc. "How safe is my investment with Kotak Life Insurance? OR how are the premiums collected invested by Kotak Life Insurance?" Kotak Life Insurance's investment portfolio has been created in accordance with the IRDA guidelines on investment by a Life Insurance Company. T.Y.B.B.I. SEMESTER VI 61
  62. 62. LIFE INSURANCE - KOTAK MAHINDRA "Is there any option where I can restrict my premium payment for a lesser number of years than the duration of the policy?" Yes. With the Kotak Endowment Plan, there is a Limited Premium Payment (LPP) option. Under this option you can take a policy for 10 to 30 years and opt for paying premiums for 3, 5, 7, 10 or 15 years after which premium payment ceases but the cover continues for the entire tenure of the policy. This option is suitable for people who are sure of secured income only for a specified period of their earning life during which they want to pay off all their premiums "Is there any policy with which I can plan for my retirement?" Yes. Kotak Retirement Income Plan. This is a pension plan, which helps you to regularly invest your savings during your earning life in order to build up a retirement corpus to take care of your post retirement needs. Further you may be eligible for a tax deduction on the premiums paid up to Rs 10,000 (as per current tax provisions) per financial year under section 80CCC of the Income tax Act. On retirement you can withdraw up to one-third of the Accumulated Account, which is tax-free and for the balance amount, you can buy an annuity. "Are there any advantages in buying insurance at an early age?" Yes. The premium that you pay on your insurance policy is mainly dependant upon two things - your age and the tenure of the policy. The younger you are, T.Y.B.B.I. SEMESTER VI 62
  63. 63. LIFE INSURANCE - KOTAK MAHINDRA the lower is your insurance premium amount. . At younger age, you would be physically sound and may not be suffering from illnesses/ medical. This would entitle you to a lower premium on the policy. Therefore it is advisable to buy insurance at an early age to reduce the cost of insurance. "What will I receive on maturity of my policy?" On maturity, you will receive the sum assured or the Accumulation Account whichever is higher. Let’s understand how these work… 1. Every year you will pay premium on your policy. 2. This premium will get credited to an Accumulation Account. 3. The amount required towards your life cover expenses and any other expense would be deducted from this Account. 4. The balance will be invested in sound financial securities (as per IRDA regulations) on your behalf. 5. The bonuses declared each year by the company would be added to the Accumulation Account. Thus, every year the value in your Accumulation Account will get compounded. 6. At the end of the policy tenure, you would receive the amount in the Accumulation Account or the sum assured, whichever is higher. "What will happen to my policy if I miss a premium Payment due date?” T.Y.B.B.I. SEMESTER VI 63
  64. 64. LIFE INSURANCE - KOTAK MAHINDRA Kotak Life Insurance offers a grace period of 30 days after the premium payment due date for paying the outstanding premium. If you fail to pay the premium on your policy within this grace period your policy will lapse. You can revive your lapsed policy by paying your outstanding premium and 6% handling charges. This facility is available for six months. However, you can still revive the policy within 5 years from the date of issue of policy. But if you are applying for revival of your policy in this period, then shall entail submission of proof of good health and your premiums will be recalculated. However, if your policy has been in force (in existence with all premiums paid on time) for three years and after that you fail to pay the premium, then your policy will get serviced out of your balance in your Accumulation Account. Every year the amount in this Accumulation Account will be used to covering your life (mortality charges and other expenses) will be deducted from your accumulated fund. This will continue till this fund has sufficient balance after which your policy will be terminated. "How much does life insurance cost?" In order to buy a life insurance policy, you must pay premiums to the life insurance company. The amount of premiums payable depends upon the type of policy, term of policy contract, sum assured and your age. You could pay these premiums monthly/ half-yearly/ annually/ or as a single premiums. "How else does life insurance help?" The primary need is buying financial security for your family. Other aspects that insurance helps fulfill are: T.Y.B.B.I. SEMESTER VI 64
  65. 65. LIFE INSURANCE - KOTAK MAHINDRA Tax benefits • Life Insurance premiums paid up to Rs. 70,000 per annum get a tax rebate (subject to certain conditions) under Section 88. • Premiums paid towards pension policies get a 100% tax rebate under section 80CCC up to Rs. 10,000 per year. (Available with Kotak Retirement Income Plan only) As a tool of financial planning Most insurance plans available today have a built in savings element. Plans like the Kotak Endowment Plan, Kotak Money back Plan; Kotak Child Advantage Plan, Kotak Preferred Retirement Plans, etc allow you to meet your dual financial goals of life cover and Savings for the future. Collateral security for loans You may avail of a loan from the insurance company against certain plans. Your policy could also be pledged as collateral to raise funds from banks and other financial institutions. In case of your unfortunate death the loans may be repaid from the proceeds of the life insurance policy. Savings Insurance promotes compulsory savings with regular premium payments and helps build up a corpus of funds along with financial security for the dependants in case of premature death. For your medical needs and that of your family Hospitalization costs and quality healthcare is becoming increasingly expensive. Without insurance, you can actually face a situation where you have withdrawn all your money and borrowed to pay the medical bills. This can be provided with our Critical Illness Benefit. Insurance provides you the option of covering yourself towards any critical illnesses that can become extremely T.Y.B.B.I. SEMESTER VI 65
  66. 66. LIFE INSURANCE - KOTAK MAHINDRA costly. Choosing this facility pays you a lump sum upon diagnosis of certain diseases like cancer, kidney failure, heart attack, stroke, coronary bypass, vital organ transplants, Alzheimer's disease, paralysis, etc. "Is there any option where I can restrict my premium payment for a lesser number of years than the duration of the policy?" Yes. With the Kotak Endowment Plan, there is a Limited Premium Payment (LPP) option. Under this option you can take a policy for 10 to 30 years and opt for paying premiums for 3, 5, 7, 10 or 15 years after which premium payment ceases but the cover continues for the entire tenure of the policy. This option is suitable for people who are sure of secured income only for a specified period of their earning life during which they want to pay off all their premiums NEWS ARTICLES KOTAK LIFE LOOKING FOR RURAL TIE-UPS Our Bureau Hyderabad, Dec. 15 Kotak Life Insurance is looking at roping in co-operative banks, primary agricultural co-operative societies (PACS), NGOs and self-help groups to sell T.Y.B.B.I. SEMESTER VI 66
  67. 67. LIFE INSURANCE - KOTAK MAHINDRA its products in the rural areas. "We are planning to have rural tie-ups for distributing our policies," Mr Gaurang Shah, Managing Director, said. The company already had tie-ups with 24 urban co-operative banks to distribute its products. Addressing a press conference here on Friday, he said the company found non-governmental organisations as the right channels. "We do have credible intermediaries in such NGOs," he said. Mr Shah was here in connection with the launch of company's 63rd branch and the third in Hyderabad at Himayatnagar. "We are going to open branches in Vijayawada and Visakhapatnam in the next few months," he said. "We are going to infuse Rs 20 crore to raise the capital to Rs 360 crore by the end of the fiscal," Mr Shah added. KOTAK LIFE ENTERS VIZIANAGARAM Our Bureau Hyderabad, Oct. 27 Kotak Life Insurance has made a foray into Vizianagaram district of Andhra Pradesh through a tie-up with Sakshi Investments. The tie-up would enhance Kotak's presence, as the latter has a strong base of share trading clients, according to a company press release. Sakshi Investments would offer a wider array of products including insurance. It would focus on consolidating Kotak's presence in the region. With a population of 2.2 million, the district is fast becoming a commercial hub, the release said. Kotak Life is focused on the top 30-40 cities. It has 55 branches with a team of about 14,000 life advisors. T.Y.B.B.I. SEMESTER VI 67
  68. 68. LIFE INSURANCE - KOTAK MAHINDRA KOTAK LIFE POSTS 122-PC GROWTH IN H1 Our Bureau Mumbai, Oct. 23 Kotak Mahindra Old Mutual Life Insurance has registered a 122 per cent growth in first year premium for the half year ended September 30. The first year premium calculated by the Adjusted Premium Equivalent Method, increased to Rs 163.78 crore (Rs 73.83 crore). The Adjusted Premium Equivalent method, takes into account only 10 per cent of single premium. Regular premium during April-September, 2006 rose to Rs 142.70 crore, against Rs 70.26 crore in the corresponding period last year. "Kotak Life Insurance manages Rs 1,335 crore in assets of which, approximately 40 per cent is in equity. We will continue to build on our distribution strengths to improve profitability and deliver long-term value," said Mr Gaurang Shah, MD, and Kotak Life Insurance. KOTAK LIFE RAISES CAPITAL BASE Our Bureau Mumbai, June 26 Kotak Life Insurance has increased its share capital by Rs 20 crore to Rs 317 crore.The promoters, Kotak Mahindra Bank and Old Mutual, have infused additional funds as per their shareholding in the joint venture. T.Y.B.B.I. SEMESTER VI 68
  69. 69. LIFE INSURANCE - KOTAK MAHINDRA "The infused capital would be used as per the prudent capital adequacy norms towards augmenting Kotak Life Insurance's business volumes and its network," the company said in a release.Kotak Life Insurance is present in 35 cities with 12,500 life advisors and 2,133 employees KOTAK LIFE POSTS 100% PREMIUM INCOME GROWTH Our Bureau Mumbai, April 15 Kotak Mahindra Old Mutual Life Insurance (Kotak Life) has registered a 100 per cent growth in its regular premium income at Rs 349 crore in 2005-06, from Rs 174 crore in 2004-05. However, single premium income fell to Rs 33 crore from Rs 180 crore in the same period. Mr Gaurang Shah, Managing Director, Kotak Life, said that around 60 per cent of the company's business came in the last quarter buoyed by the success of its newly introduced capital guarantee product. "Our capital guarantee product, Kotak Privilege, has seen tremendous success in the last quarter. This product alone has raked in Rs 112 crore in premium," he said. T.Y.B.B.I. SEMESTER VI 69
  70. 70. LIFE INSURANCE - KOTAK MAHINDRA Adjusted premium equivalent "The adjusted premium equivalent, a standard measure in the industry that takes single premium income at 10 per cent, has grown from Rs 209 crore in 2004-05 to Rs 366 crore in 2005-06, a growth of 76 per cent," said a release from the company. Bancassurance tie-ups with Kotak and other banks added Rs 150 crore to the new business. "With Kotak Bank expanding to more locations and increasing its retail base, we are riding on the infrastructure to penetrate deeper to semi-urban areas," he said. Group business However, growth in the group business was flat. Mr Shah said that fringe benefit tax on group superannuation had a negative impact on the company's group business, with only Rs 16 crore coming from the portfolio, unchanged from the previous year. Kotak Life will focus on group credit term and superannuation to grow its business in the current fiscal. New products In terms of new products, the company will introduce two more capital guarantee policies — a children's plan and a retirement product. T.Y.B.B.I. SEMESTER VI 70
  71. 71. LIFE INSURANCE - KOTAK MAHINDRA The company will have to alter three of its Unit Linked Insurance Plans to conform with the guidelines effective July 1. Mr Shah said the modification would mainly consist of introducing a lock-in period. Kotak Life will strengthen its distribution network this fiscal by opening 24 more branches and increasing its agency force to 25,000 from the current 12,500. Mr Shah said the focus of the life insurer would continue to be the mass affluent and high net-worth individuals. The average premium per policy of the company is Rs 36,000. T.Y.B.B.I. SEMESTER VI 71
  72. 72. LIFE INSURANCE - KOTAK MAHINDRA CO NCLUSION From the above project report on “Kotak Mahindra - Life Insurance”. I conclude that the products offered by kotak mahindra to its customers are enough to satisfy their needs but, they are not aware of the company and its product in the market. Kotak mahindra should advertise them internationally so that the customer will be aware of such company. This will be helpful for the company to compete with other insurance companies. The detail given in this project report is true to the best of my knowledge & the information made to me during my project tenure. T.Y.B.B.I. SEMESTER VI 72
  73. 73. LIFE INSURANCE - KOTAK MAHINDRA BIBLIO GRAPHY Book referred:-- Insurance Institute of India IC-33 Life Insurance ---------- S.Balachandran. Websites:-- • www.kotaklifeinsurance.com • www.sbilifeinsurance.com T.Y.B.B.I. SEMESTER VI 73

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