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Is the Kotak Confident Retirement Savings Plan the key to a stress-free retirement, or should you explore other options first?
Could the Kotak Confident Retirement Savings Plan be the cornerstone of your retirement strategy, or is it falling short of expectations?
Can the Kotak Confident Retirement Savings Plan give you the peace of mind you seek, or does it leave room for doubt?
This review takes a closer look at the plan’s features, benefits, and limitations to help you decide.
Table of Contents
What is the Kotak Confident Retirement Savings Plan?
What are the features of the Kotak Confident Retirement Savings Plan?
Who is eligible for the Kotak Confident Retirement Savings Plan?
What are the benefits of the Kotak Confident Retirement Savings Plan?
Grace Period, Lapsed and Reduced Paid-up and Revival of Kotak Confident Retirement Savings Plan
Free Look Period for Kotak Confident Retirement Savings Plan
Surrendering Kotak Confident Retirement Savings Plan
What are the advantages of the Kotak Confident Retirement Savings Plan?
What are the disadvantages of the Kotak Confident Retirement Savings Plan?
Research Methodology of Kotak Confident Retirement Savings Plan
Benefit Illustration – IRR Analysis of Kotak Confident Retirement Savings Plan
Kotak Confident Retirement Savings Plan Vs. Other Investments
Kotak Confident Retirement Savings Plan Vs. Pure-term + PPF/ELSS
Final Verdict on Kotak Confident Retirement Savings Plan
What is the Kotak Confident Retirement Savings Plan?
Kotak Confident Retirement Savings Plan is a Participating Non-Linked Pension Individual Savings Plan. It takes full control of your retirement with confidence, to accumulate corpus for your golden years, to lead a comfortable and worry-free retirement life.
What are the features of the Kotak Confident Retirement Savings Plan?
- Earn bonuses starting from the first policy year, continuing through the entire policy term
- Receive a guaranteed benefit either on death or at the time of vesting
- Access funds through partial withdrawals during financial emergencies
- Choose between limited premium payment terms or paying throughout the policy duration
- Enhance your coverage with optional rider benefits
Who is eligible for the Kotak Confident Retirement Savings Plan?
| Parameters | Minimum | Maximum |
| Age at Entry | 25 Years | Regular Pay: 60 YearsLimited Pay (7 PPT & 10 PPT): 60 yearsLimited Pay (12 PPT): 55 years |
| Age at Maturity | 35 Years | 75 Years |
| Annualized Premium | Limited & Regular Pay: `30,000 | No Limit |
| Premium Paying Term | Regular Pay 7, 10 or 12 Years | |
| Policy Term | Regular Pay: 10 to 30 YearsLimited Pay (7 PPT & 10 PPT): 15 to 30 yearsLimited Pay (12 PPT): 20 to 30 years | |
| Premium Payment Frequency | Yearly, Half-Yearly, Quarterly and Monthly | |
| Basic Sum Assured | It will depend on Age, PT, PPT and Premium payable | |
What are the benefits of the Kotak Confident Retirement Savings Plan?
1.Vesting Benefit
On Survival of Life Insured till the end of the Kotak Confident Retirement Savings Plan policy term, Vesting Benefit shall be higher of,
- Basic Sum Assured PLUS Accrued Reversionary Bonus (if any) PLUS
- Terminal Bonus (if any) or
- Assured Benefit (105% of the Total Premium Paid till the date of death or vesting)
Utilisation of the Vesting benefit
The Kotak Confident Retirement Savings Plan Policyholders can utilise the Vesting Benefit in the following manner
- To utilise the entire proceeds of the policy to purchase immediate or deferred annuity at the then prevailing annuity rate from Kotak Life Insurance or from any other insurer (to the extent of the percentage stipulated by IRDAI, currently 50% of the entire proceeds of the policy net of commutation). OR
- To commute to the extent of 60% of the proceeds of the policy and to utilise the balance amount to purchase immediate or deferred annuity from Kotak Life Insurance or any other insurer (to the extent of the percentage stipulated by IRDAI, currently 50% of the entire proceeds of the policy net of commutation
2.Death Benefit
In the unfortunate event of the death of the Life Insured during the term of the plan, the nominee will receive the following:
- Assured Benefit (105% of the Total Premium Paid till the date of death or vesting) PLUS
- Accrued Reversionary Bonus (if any) PLUS
- Terminal Bonus (if any)
Utilisation of the Death benefit
The nominee or beneficiary can use the proceeds of the death benefit, as per the following options:
- Withdraw the entire proceeds of the Kotak Confident Retirement Savings Plan policy. OR
- To utilise the entire proceeds of the policy or part thereof for purchasing an immediate annuity or deferred annuity at the then prevailing annuity rate
3.Bonuses
Reversionary Bonus: At the end of each financial year from the 1st policy year, the company may declare Compounded Reversionary Bonuses expressed as a percentage of the Total Premiums Paid (excluding modal loading) and the Accrued Reversionary Bonus (if any).
Interim Bonus: In the event of a death or surrender claim, an interim bonus (if applicable) may be payable at such rate as may be decided by the Company.
This interim bonus rate will be expressed as a percentage of the Total Premiums Paid (excluding modal loading) and the Accrued reversionary bonus (if any), as the case may be.
Terminal Bonus: The Company may decide to pay Terminal Bonus on surrender or on vesting. Terminal bonus may also be payable in the event of death, provided the Life Insured has survived for five policy years.
Such a bonus shall be expressed as a percentage of the Basic Sum Assured
Grace Period, Lapsed and Reduced Paid-up and Revival of Kotak Confident Retirement Savings Plan
Grace Period
There is a Grace Period of 30 days for annual, half-yearly and quarterly modes and 15 days for the monthly mode from the due date for payment of the premium.
Lapsed
If at least one full year’s premium is not paid within the grace period, the Kotak Confident Retirement Savings Plan policy shall lapse from the due date of the first unpaid premium, and no benefit will be payable.
Reduced Paid-up
If at least one full year’s premiums are paid and due premiums are not received within the grace period anytime during the premium payment term, the Kotak Confident Retirement Savings Plan policy will be converted into a Reduced Paid-Up policy by default.
Revival
A lapsed/reduced paid-up policy can be revived within a period of five policy years
Free Look Period for Kotak Confident Retirement Savings Plan
In case the Kotak Confident Retirement Savings Plan Policyholder is not agreeable to any terms and conditions of the Policy or otherwise, then, subject to no claims having been made hereunder, the Policyholder may choose to return the Policy within 30 days (except for policies having a policy term of less than a year) beginning from the date of receiving the Policy Document in electronic form.
Surrendering Kotak Confident Retirement Savings Plan
Surrender Value payable will be higher of the Guaranteed Surrender Value or the Special Surrender Value. The Kotak Confident Retirement Savings Plan policy shall acquire the Guaranteed Surrender Value provided all due premiums for at least 2 policy years have been paid in full.
In case of surrender of the policy, after completion of the first policy year, provided one full year’s premium has been received, a Special Surrender Value shall be payable.
What are the advantages of the Kotak Confident Retirement Savings Plan?
- Includes built-in Health and Wellbeing Management Services
- Option to enhance coverage with additional rider benefits
- After completing three policy years, you can make up to three partial withdrawals during the Kotak Confident Retirement Savings Plan policy term
- Loans of up to 50% of the surrender value are available, offering financial support when needed
What are the disadvantages of the Kotak Confident Retirement Savings Plan?
- The plan offers only the vested benefit upon completion of the Kotak Confident Retirement Savings Plan policy term
- The sum assured under the plan is on the lower side
- Payouts are largely dependent on bonuses, which can vary and are not guaranteed
Research Methodology of Kotak Confident Retirement Savings Plan
Kotak’s Confident Retirement Savings Plan is designed to promote disciplined retirement savings. However, it lacks a provision for periodic income payouts during retirement.
Instead of receiving a lump sum maturity benefit, the accumulated corpus is used to generate a regular income post-retirement. Let’s understand this with an example from the Kotak Confident Retirement Savings Plan policy brochure.
Benefit Illustration – IRR Analysis of Kotak Confident Retirement Savings Plan
A 40-year-old male invests ₹1 lakh annually in the plan. The premium payment term is 10 years, and the policy term extends to 20 years, with vesting occurring at age 60. The death benefit during the policy term is ₹10.50 lakhs.
| Male | 40 years |
| Sum Assured | ₹ 10,50,000 |
| Policy Term | 20 years |
| Premium Paying Term | 10 years |
| Annualised Premium | ₹ 1,00,000 |
He pays premiums for the first 10 years, while the benefits, including bonuses, accumulate and vest at the end of 20 years. However, the vesting benefit at age 60 is not directly encashable like a typical maturity benefit.
| At 4% p.a. | At 8% p.a. | ||||
| Age | Year | Annualised premium / Maturity benefit | Death benefit | Annualised premium / Maturity benefit | Death benefit |
| 40 | 1 | -1,00,000 | 10,50,000 | -1,00,000 | 10,50,000 |
| 41 | 2 | -1,00,000 | 10,50,000 | -1,00,000 | 10,50,000 |
| 42 | 3 | -1,00,000 | 10,50,000 | -1,00,000 | 10,50,000 |
| 43 | 4 | -1,00,000 | 10,50,000 | -1,00,000 | 10,50,000 |
| 44 | 5 | -1,00,000 | 10,50,000 | -1,00,000 | 10,50,000 |
| 45 | 6 | -1,00,000 | 10,50,000 | -1,00,000 | 10,50,000 |
| 46 | 7 | -1,00,000 | 10,50,000 | -1,00,000 | 10,50,000 |
| 47 | 8 | -1,00,000 | 10,50,000 | -1,00,000 | 10,50,000 |
| 48 | 9 | -1,00,000 | 10,50,000 | -1,00,000 | 10,50,000 |
| 49 | 10 | -1,00,000 | 10,50,000 | -1,00,000 | 10,50,000 |
| 50 | 11 | 0 | 10,50,000 | 0 | 10,50,000 |
| 51 | 12 | 0 | 10,50,000 | 0 | 10,50,000 |
| 52 | 13 | 0 | 10,50,000 | 0 | 10,50,000 |
| 53 | 14 | 0 | 10,50,000 | 0 | 10,50,000 |
| 54 | 15 | 0 | 10,50,000 | 0 | 10,50,000 |
| 55 | 16 | 0 | 10,50,000 | 0 | 10,50,000 |
| 56 | 17 | 0 | 10,50,000 | 0 | 10,50,000 |
| 57 | 18 | 0 | 10,50,000 | 0 | 10,50,000 |
| 58 | 19 | 0 | 10,50,000 | 0 | 10,50,000 |
| 59 | 20 | 0 | 10,50,000 | 0 | 10,50,000 |
| 60 | 15,92,439 | 27,34,201 | |||
| IRR | 3.02% | 6.59% | |||
At an assumed return of 4% p.a., the vesting benefit is ₹15.92 lakhs, translating to an IRR of 3.02% as per the Kotak Confident Retirement Savings Plan maturity calculator.
At an assumed return of 8% p.a., the vesting benefit is ₹27.34 lakhs, yielding an IRR of 6.59% as per the Kotak Confident Retirement Savings Plan maturity calculator.
Though these projections might seem attractive, it’s important to note that the vesting benefit is not immediately accessible. It must be used to purchase an annuity plan (sold separately), based on prevailing annuity rates.
Moreover, the plan restricts your flexibility. You cannot use the entire accumulated corpus for personal needs or invest it as per your preferences. At vesting, only up to 60% of the corpus can be commuted (withdrawn as a lump sum); the rest must be used to buy an annuity.
This mandatory structure and limited flexibility make the Kotak Confident Retirement Savings Plan less suitable for investors seeking control over their retirement corpus.
Kotak Confident Retirement Savings Plan Vs. Other Investments
The Kotak Confident Retirement Savings Plan is designed solely for the accumulation phase of retirement planning, offering no control over the distribution phase. The final payouts through annuity are non-guaranteed, and there’s no option to receive the entire benefit as a lump sum.
This restricts flexibility and access to your hard-earned savings. Let’s explore a more efficient alternative that gives you greater control over your retirement corpus.
Kotak Confident Retirement Savings Plan Vs. Pure-term + PPF/ELSS
Using the same assumptions from the earlier example, you can first address life insurance needs separately by opting for a pure-term insurance policy.
A term plan with a sum assured of ₹10.50 lakhs costs approximately ₹11,200 annually for a 20-year term, with a 10-year premium payment term.
This leaves ₹88,800 out of the ₹1 lakh annual budget to invest according to your risk appetite.
| Pure Term Life Insurance Policy | |
| Sum Assured | ₹ 10,50,000 |
| Policy Term | 20 years |
| Premium Paying Term | 10 years |
| Annualised Premium | ₹ 11,200 |
| Investment | ₹ 88,800 |
For conservative investors, the Public Provident Fund (PPF) is a reliable option. With consistent annual investments (and minimum contributions in the final years), the PPF can yield a maturity value of ₹26.20 lakhs over 20 years, delivering an IRR of 6.31%.
While this is slightly lower than the Kotak plan’s 8% projection, the entire corpus remains fully accessible with no withdrawal restrictions.
| Term Insurance + PPF | Term insurance + ELSS | ||||
| Age | Year | Term Insurance premium + PPF | Death benefit | Term Insurance premium + ELSS | Death benefit |
| 40 | 1 | -1,00,000 | 10,50,000 | -1,00,000 | 10,50,000 |
| 41 | 2 | -1,00,000 | 10,50,000 | -1,00,000 | 10,50,000 |
| 42 | 3 | -1,00,000 | 10,50,000 | -1,00,000 | 10,50,000 |
| 43 | 4 | -1,00,000 | 10,50,000 | -1,00,000 | 10,50,000 |
| 44 | 5 | -1,00,000 | 10,50,000 | -1,00,000 | 10,50,000 |
| 45 | 6 | -1,00,000 | 10,50,000 | -1,00,000 | 10,50,000 |
| 46 | 7 | -1,00,000 | 10,50,000 | -1,00,000 | 10,50,000 |
| 47 | 8 | -1,00,000 | 10,50,000 | -1,00,000 | 10,50,000 |
| 48 | 9 | -1,00,000 | 10,50,000 | -1,00,000 | 10,50,000 |
| 49 | 10 | -97,500 | 10,50,000 | -1,00,000 | 10,50,000 |
| 50 | 11 | -500 | 10,50,000 | 0 | 10,50,000 |
| 51 | 12 | -500 | 10,50,000 | 0 | 10,50,000 |
| 52 | 13 | -500 | 10,50,000 | 0 | 10,50,000 |
| 53 | 14 | -500 | 10,50,000 | 0 | 10,50,000 |
| 54 | 15 | -500 | 10,50,000 | 0 | 10,50,000 |
| 55 | 16 | 0 | 10,50,000 | 0 | 10,50,000 |
| 56 | 17 | 0 | 10,50,000 | 0 | 10,50,000 |
| 57 | 18 | 0 | 10,50,000 | 0 | 10,50,000 |
| 58 | 19 | 0 | 10,50,000 | 0 | 10,50,000 |
| 59 | 20 | 0 | 10,50,000 | 0 | 10,50,000 |
| 60 | 26,20,505 | 48,69,756 | |||
| IRR | 6.31% | 10.46% | |||
For growth-oriented investors, Equity-Linked Savings Schemes (ELSS) offer higher potential. An investment of ₹88,800 annually in ELSS for 20 years can grow to ₹54.20 lakhs.
After accounting for long-term capital gains tax, the post-tax corpus is around ₹48.69 lakhs, yielding an IRR of 10.46% (post-tax).
| ELSS Tax Calculation | |
| Maturity value after 20 years | 54,20,721 |
| Purchase price | 8,88,000 |
| Long-Term Capital Gains | 45,32,721 |
| Exemption limit | 1,25,000 |
| Taxable LTCG | 44,07,721 |
| Tax paid on LTCG | 5,50,965 |
| Maturity value after tax | 48,69,756 |
The substantial corpus built through these alternate strategies can be reallocated across diversified assets in retirement to generate a stable, inflation-adjusted income stream.
Flexibility in utilising your accumulated corpus is essential for smart retirement planning, and this is where the Kotak Confident Retirement Savings Plan falls short.
Unlike traditional retirement plans that lock you into an annuity, this approach puts you in control of both accumulation and distribution, helping you make the most of your retirement years.
Final Verdict on Kotak Confident Retirement Savings Plan
The Kotak Confident Retirement Savings Plan is positioned as a retirement solution, but it comes with significant limitations. While it does help you build a retirement corpus, you don’t have full access to that corpus at maturity.
The plan permits only partial commutation—up to 60%—and mandates that the remaining amount (or the full corpus, if you choose not to commute) be used to purchase an annuity.
Unfortunately, the plan lacks transparency regarding the annuity payouts, raising concerns about whether the income generated will keep pace with rising living costs.
Moreover, the final corpus is not guaranteed, as it is tied to bonuses declared by the insurer. Additionally, the sum assured is relatively low, which further diminishes the plan’s effectiveness in securing a financially comfortable retirement and it also has a high agent commission.
Given these limitations, the Kotak Confident Retirement Savings Plan may not be the most suitable option for those seeking control, flexibility, and inflation-adjusted retirement income.
A more effective approach is to invest in flexible, goal-oriented strategies that allow you to accumulate a sizeable retirement corpus on your own terms.
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To determine the right investment path and accurately calculate your ideal retirement corpus, it’s advisable to consult a Certified Financial Planner who can craft a retirement plan tailored to your needs and lifestyle goals.
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