Kotak Life Insurance recently launched Kotak Preferred e-Term Plan, which provides pure risk cover for life.

Some of the key advantages of the plan are:
 

• Inbuilt waiver of basic premiums on Total and Permanent Disability, at low cost
• Option to choose plans as per suitability viz. Recurring Pay-out or Immediate Pay-out
• Quick and hassle free buying through the online portal
• Preferential rates for female lives and non-tobacco users
• Customize protection through optional Kotak e-Accidental Death Benefit Rider
• Tax benefits as per Section 80C and 10(10D) of the Income Tax Act, 1961

How does the plan work?

You select the amount of cover (i.e. the Basic Sum Assured) as per your requirement, the term for which you want to be covered, and the term for which you want to pay premiums.

Subsequently, you select the ‘Plan Option’ as per suitability – whether you wish to opt for ‘Recurring Pay-out’ or ‘Immediate Pay-out’ – and accordingly, the premium will be calculated.

What happens in case of an unfortunate event?

In case of an unfortunate event i.e. death during the term of the plan, the Nominee of the insured will receive the Sum Assured (SA) on acceptance of the death claim as per the plan opted for:
 

1. Recurring Pay-out: Under this option, the Sum Assured on death will be payable in the following manner:
    
   1. Lump sum payment of 10% of Sum Assured on death, at the time of claim settlement; and
   2. 6% of Sum Assured on death every year for 15 years (the first payment being made one year after the date of death of the life insured).
   
   In addition, there is an option to receive this annual payment of 6% of Sum Assured on death in monthly mode. The monthly payments will be 8.22% of the Annual payments (6% of Sum Assured on death). The first payment will start from one month after the date of death of the life insured. The option of annual or monthly payment needs to be intimated at claim stage.
    
2. Immediate Pay-out: Under this option, the Sum Assured on death will be paid immediately and the policy concludes.

Is there waiver of premiums in case of permanent disability?

Yes. If during the premium payment term, the Life Insured becomes totally and permanently disabled, future basic premiums are waived and policy continues.

In case of an unfortunate event – death – during the Policy Term, the death benefit will be payable as per the Plan Option selected.

How much are the premiums?
 

Immediate Pay-Out
Entry Age / Policy Term	25 years	30 years	35 years	40 years
30 years	6,975	7,375	7,925	8,500
35 years	9,175	10,000	10,875	11,775
40 years	13,300	14,450	15,850	NA
45 years	19,675	21,550	NA	NA

Note: The premiums above are for a Basic Sum Assured of Rs 1 Crore
(Source: Product Brochure of Kotak Preferred e-Term Plan)  

Recurring Pay-Out
Entry Age / Policy Term	25 years	30 years	35 years	40 years
30 years	5,850	6,300	6,750	7,275
35 years	7,800	8,475	9,225	9,925
40 years	11,175	12,250	13,350	NA
45 years	16,525	18,175	NA	NA

Note: The premiums above are for a Basic Sum Assured of Rs 1 Crore
(Source: Product Brochure of Kotak Preferred e-Term Plan)
Are there any eligibility conditions?

Yes, they are as follows…

Eligibility Conditions
Convenient premium payment term & modes	As per suitability, you can opt for premium payment term (PPT) i.e. regular or limited or single pay, from available options. You have the option to pay your premiums yearly or monthly and can also change the premium payment mode on policy anniversary
Additional Protection (Optional)	If you feel the insurance cover is not adequate or wish to customize the protection, you can opt for Kotak e-Accidental Death Benefit Rider. Under the rider, Lump sum benefit paid on accidental death of life insured in addition to Death Benefit under the base plan.
Maturity Benefit	No maturity benefit
Entry Age	Min: 18 years and Max: 65 years
Maturity Age	Min: 28 years and Max: 75 years
Premium Payment Term (PPT)	Regular Pay: Equal to Policy Term Limited Pay: 5 pay for policy term 10 to 40 years 10 pay for policy term 15 to 40 years Single Pay: Single payment
Policy Term	10 to 40 years (in multiples of 1 year)
Premium Payment Option	Regular, Limited and Single pay
Basic Sum Assured	Min - Rs 25,00,000; Max - No limit, subject to Underwriting
Premium Payment Mode	Yearly and Monthly

(Source: Product Brochure of Kotak Preferred e-Term Plan)

To conclude…

Overall e-Term plan is a good option for life insurance seekers as it offers indemnification of risk to life with a luring cost-to-benefit. In case of Kotak Preferred e-Term Plan, opting for the ‘Recurring Pay-Out’ would not be a worthwhile proposition even though the premiums are competitive; because the ultimate aim of a term insurance plan is offering a pay-out to the beneficiaries / nominees, for their financial wellbeing in the absence of the insured or the bread winner of the policy. Hence make sure you make a prudent choice while insuring yourself and securing the life your loved ones.

When you addressing insurance needs, prudently assess your life insurance requirement taking into account the scientific concept called Human Life Value (HLV). Also, compare policies for the benefits / feature vis-à-vis the premium before finalizing. Online term plans are worthwhile, but you ought to thoroughly read the terms and conditions, while you go for the convenience of buying at a click of mouse or smartphone.

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