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Knowledge Base Life Insurance Term Plan Kotak Preferred Term Plan Review
Friday, 21 January 2011 10:28

Kotak Preferred Term Plan Review

Written by  Yashish Dahiya
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Kotak Preferred Term Plan


Plan Name: Preferred Term
Insurer:  Kotak Mahindra Life Insurance
Category: Term Life Insurance Plan
Objective: Financial protection of Family

Kotak Preferred Term Plan is a term life insurance which provides financial protection to your cherished ones if something unfortunate happens to you. You can get comprehensive Sum Assured at nominal cost. If anything happens to you, Sum Assured will be paid to the nominee. Being a pure term life insurance plan, Kotak Preferred term plan has no maturity benefits. However Preferred term insurance plan conversion feature offers great flexibility.

 

 

Who can buy Preferred Term Plan?


Kotak Preferred Term plan is for anyone who has attained age of 18 and is not more than 65 years. The policy term varies from 5 years to 30 years. The maximum age at maturity cannot exceed 70 years.

 

How Much cover: The minimum cover available in Kotak Preferred Term Plan is Rs 25 lacs. The maximum cover is unlimited though some medical, financial requirements are to be met.

What cover is suitable for you?

Rule of Thumb: The typical cover should be ten times your annual income.


Summarized Table:

Entry Age

18 years - 65 years

Maturity Age

Maximum – 70 years

Sum Assured

Rs.25 lacs - unlimited( subject to underwriting)

Premium

Min Rs 2000 p.a., Max: subject to Sum Assured

Policy Term

5years - 30 years

Premium Mode

Yearly, Half Yearly, Quarterly, Monthly

 

 

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What do I get?


Death Clause- The fixed Sum Assured is paid to the beneficiary (parents, wife or children) in case policyholder expires during the policy term.

 

Tax Benefits: Tax benefits can be availed under 80C and 10(10D) of the Income Tax Act, 1961.

80C- the yearly premium you pay (maximum: 1 lac) is deductible from taxable income.

10(10D) - Death claim is tax free. The Sum Assured which the nominee will receive is not subject to tax.

Plan Conversion: You have the option of converting your Preferred Term Plan into any of the other Kotak plans (barring term plan) if there are at least 5 years left before the plan ends.

Illustration:

Sonu is 32 years old, recently became a father which turned his mind towards getting a term plan. He buys Kotak Preferred Term life insurance Plan with cover of 40 lacs and term of 25 years. Sonu nominates his wife as beneficiary. For this, he pays nominal premium of just Rs 6673 annually.

Consider these Scenarios:

Scenario1: Sonu dies in the 1st policy year- the nominee will get 40 lacs. Same is true for all policy years.

Scenario 2: Policy is in grace period and Sonu dies, Sum Assured minus renewal premium will be paid.

Scenario 3: Policy lapses on the 22nd year, Sonu dies, nothing will be paid. However policy can be revived within 30 days from the date of renewal.

Scenario 4: Sonu thinks he has good cover and wants to buy Kotak Child plan, he has the flexibility to do so. Sonu can switch to the other plan and the paid premiums will be adjusted accordingly.

RIDERS:


Riders are very useful additional benefits which could be beneficial to the policyholder. They are low priced but their utility is huge. They can be added only at the commencement or anniversary of the policy.  Riders available with Kotak Preferred term plan are:

 

Accidental Death Benefit (ADB): If the policyholder dies within 120 days due to accident, this rider is applicable. The maximum Sum Assured under this rider is Rs 10 lacs.

Permanent Disability Benefit: If the policyholder becomes permanently disabled due to accident and survives after 120 days, Sum Assured will be paid in five annual installments. The installments will begin with 12% of Sum Assured and the fifth installment will be 60% of Sum Assured. The maximum Sum Assured will be Rs 10 lacs.

Critical Illness Benefit: In case policyholder is diagnosed with any of the listed illnesses, the Critical Illness rider will come into effect. The maximum amount is Rs 20 lacs and is paid in lump sum after the necessary verification. The critical illnesses included are:

Heart Attack (MI), Cancer, Stroke, Coronary Artery by-pass graft surgery (CABG), Kidney failure, Major organ transplants, Paralysis, Loss of limbs, Aorta surgery, Major burns, Heart valve surgery, Blindness.


What Else?


How to buy: Let Policybazaar ease you through the buying process, contact us.

Free Look Period: Kotak Preferred policy can be returned within 15 days of receiving the policy contract.  The premium will be paid back minus some charges like medical examination, stamp duty.

Grace period: Preferred term plan premium can be paid within 30 days from the date of renewal. In case of monthly mode payments, grace period cannot extend 15 days. However in case of death during grace period; renewal premium will be deducted from Sum Assured payable. After the grace period, if the renewal premium is not paid the policy will cease to exist.


Reinstatement: Preferred term plan can be revived within 2 years from the premium due date. Also beyond 6 months, proof of good health will be required. All the dues remaining will have to be paid to revive the policy.

Maturity:
There are no maturity benefits since preferred term plan is a risk plan.

Payment Method: Cash, cheque, net banking, credit/debit card are accepted by Kotak.

Exclusion: No Sum Assured will be paid if death is caused due to suicide within first year of policy issuance or policy revival.

Death Claim: The nominee can apply for the death claim (Sum Assured) after filling claim forms along with list of documents which will prove legitimacy of the claim.

 

 
Close Competitors:

Aviva LifeShield Plus, Bajaj Allianz New Risk Care II, Bharti AXA Elite Secure, HDFC Term AssuranceLIC Amulya Jeevan-I, Met Suraksha Plus, Max New York Life Platinum Protect, Reliance Term Plan, Tata AIG Life Raksha.

 

Policybazaar take on Kotak Preferred term:

Kotak Preferred term plan is excellent term plan that meets your requirements but is not available online. Preferred term has the option of riders as well as plan conversion which allows more flexibility to customers at moderately higher premium.

 

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10 comments
  • Comment Link YUGAL KISHOR Tuesday, 01 February 2011 00:08 posted by YUGAL KISHOR

    Pl. quote yearly premium.

  • Comment Link YUGAL KISHOR Tuesday, 01 February 2011 00:09 posted by YUGAL KISHOR

    Pl. quote yearly premium.

  • Comment Link Administrator Tuesday, 01 February 2011 10:01 posted by Administrator

    Hi Yugal,

    Thanks for your feedback.
    We will update the article with premiums for most common profiles.

    Thanks.

  • Comment Link Gopal Singh Pilakhwal Friday, 16 September 2011 19:53 posted by Gopal Singh Pilakhwal

    I am 32 years old.Please quote annual premium for 40 lacs sum assured.

  • Comment Link Administrator Monday, 19 September 2011 11:39 posted by Administrator

    Hi Gopal Singh
    You can find quotes and also make comparison of term plans from the following link:

    http://www.policybazaar.com/life-insurance/term-insurance-india.aspx

  • Comment Link Abhijit Thursday, 13 October 2011 20:03 posted by Abhijit

    The plan is too good and cheap but what is more important is the chances of getting the claims paid when you are not there.
    And for that the private companies will find any silly reason to refuse the claim? Then fight in the court for years .......

    Therefore buy less Sum Assured and go FOR LIC

  • Comment Link Administrator Friday, 14 October 2011 18:54 posted by Administrator

    Hi Abhijit
    Only if the claim is in the initial years, there is hard investigation to detect fraud. Otherwise, claim is paid as per the process.

  • Comment Link eshaegbert Monday, 24 October 2011 21:21 posted by eshaegbert

    hi m esha of 21 and i want an insurance of 1 crore so can u tell me the annual premium.

  • Comment Link Administrator Tuesday, 25 October 2011 14:24 posted by Administrator

    Hi Esha
    You can find the premium amount of different term plans from the following link:
    http://www.policybazaar.com/life-insurance/term-insurance-india.aspx

  • Comment Link kantilal tandel Friday, 17 February 2012 01:38 posted by kantilal tandel

    I have a current prefered term plan plocy no 02300872,clint ID-54513429,I want to know ''can I extend the same policy to 30years ?

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