Key to a successful business is keeping your employees motivated. Happy and secured employees work better, which in turn reduces the employer’s tension. Group Insurance is an insurance which covers a group of people (like employees of a common employer or professionals in a common group).
OVERVIEW
In today’s competitive market scenario, it’s getting tougher to attract and retain customers, let alone aiming for market leadership. The Kotak Credit-Term Grouplan, is the right solution to your needs, protecting both your institution’s and your customer’s interest. Not only is it cost effective and easy to administer, but it also gives you a differentiating edge over your competitors.
This plan provides life cover to a group of borrowers of the credit institution (banks, retail finance providers etc.) with the Life Assured being the borrower and the Credit Institution being the beneficiary. It is a non-participating yearly renewable plan .The plan can be compulsory (for all borrowers) or voluntary (subject to certain conditions). In the unfortunate event of death of the borrower during the term of the policy, the outstanding loan amount would be repaid by Kotak Life Insurance, relieving the borrower’s family of the loan liability and eliminating risk of loss due to death of the borrower to the Credit Institution.
ADVANTAGES
For employer
- Eliminates the risk of default in the event of death of the borrower
- Facilitates competitive pricing for credit products and ensures a differentiating edge over your competitors
- Significant opportunity to earn fee-income
- Does not require a Corporate Agency or Referral tie-ups
- Extremely cost-effective because of group pricing dynamics and premium recovered from the customer
- Hassle-free administrative procedures
For employees
- The borrower’s family is relieved of the financial burden of paying the outstanding loan amount
- The pooling of risk (group cover) allows the cover to be provided at a low cost
- Hassle-free and convenient documentation process
- Relaxed medical examination norms (subject to applicable conditions).However non-medical limit will vary by loan type, Borrowers age and tenure of the loan.
- The life cover is available 24 hours a day, 7 days a week, anywhere in the world
ELIGIBILITY REQUIREMENTS
- The minimum age at entry is 18 years
- The maximum age at entry is 64 years
- The maximum ceasing age of the plan is 65 years
PREMIUM PAYMENTS
Premiums are paid annually in advance. However, we also offer the opportunity to the credit institution to make the payment monthly in advance.
BENEFITS
On death during the term of the plan, the outstanding loan amount is paid to the bank and the remaining amount (if any) is paid to the nominee, under both options. No overdue on the loan will be covered. However, No Maturity benefit is payable under the plan.
OTHER BENEFITS
With the Kotak Credit-Term Grouplan, the Accidental Disability Benefit Rider can be added for a nominal additional premium. With this, if, during the term of this benefit, a member is totally and permanently disabled as a result of an accident; a lump sum would be paid to the credit institution. The maximum benefit that can be availed of is Rs. 10,00,000 subject to certain conditions. Maximum entry Age for the rider is 50 years except where coverage is compulsory for an existing group of borrowers
TAX BENEFITS
- The premium paid by the credit institution could be considered as part of business expenses and may be tax deductible
- Any premium paid by a borrower in his/her capacity as an individual will be eligible for tax deduction under section 80(C) of the Income Tax Act, 1961
- Benefits received by the borrower’s nominee are tax free under section 10(10 D) of the Income Tax Act, 1961
Tax benefits are subject to change in tax laws. You are advised to consult your tax advisors for details.
SERVICES
- A dedicated Customer Relationship Manager for effective initiation and regular servicing
- Comprehensive operational and post-launch support from centralized Group Operations Team
- Centralized customer support for query handling on an ongoing basis
MAXIMUM COVER
Cover may not exceed the original value of the loan. However, the maximum cover allowed per member will vary from group to group, up to a maximum of Rs. 50,00,000.
MAXIMUM GROUP CAPACITY
Atleast 25% of the borrowers in the group should opt for the life cover subject to a minimum of 1250 members. Kotak Life Insurance provides the option of compulsory or voluntary membership for the borrowers of credit institution. There is no restriction on the maximum number.
TERMINATION OF COVER
The cover for a member will cease on the earliest of:
- The date on which the loan is repaid
- The date the borrower attains the ceasing age as in the policy contract
- The date of scheduled expiry of the loan as per loan contract
- The date on which the contract terminates as per the provisions of loan contract
- The date on which the premium for the member ceases
EXCLUSIONS
Claims resulting from suicide within a year of cover will be disallowed.
| Free Look Period |
| The Policyholder is offered a 15 days free look period, from the date of receipt of this policy. During this period the Policyholder may choose to reconsider his/her decision to hold this policy, or may choose to return the same within the said 15 days. Should the Policyholder choose to return the Policy, he/she shall then be entitled to a refund of the premium paid after adjustments for expenses for medical examination, stamp duty and proportionate risk premium for the period of cover. |
| Service Tax and education cess shall be levied on all applicable charges as per the prevailing tax laws and/or any other laws. In case of any statutory levies, cess, duties etc., as may be levied by the Government of India from time to time, the Company reserves its right to recover such statutory charges from the policyholder(s) either by increasing the premium and / or by reducing the benefits payable under the plan. |
PREMIUM TABLES
Kotak Credit Term Grouplan
| Name of the client | XYZ Ltd |
| Membersize | 1000 and future borrowers |
| Cover | Uniform Rs 2 Lacs |
| Group | employees-100% office staff |
| Loan Covered | Car Loan |
| Gender | All Males |
| Plan | Yearly renewable scheme covering outstanding principal of car loan |
| Average CTC | Rs 25,000 Per Month |
| Rates Suggested (Per Mille exclusive of service Tax) | |
| Age Band | Total rate |
| 18-35 | 1.2896 |
| 36-40 | 1.7537 |
| 41-45 | 2.7451 |
| 46-50 | 4.4291 |
| 51-55 | 7.2134 |
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