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Can the Kotak Get Assured Income Now Plan fit into your overall financial strategy?
Can the Kotak Get Assured Income Now Plan offer the peace of mind of a steady income stream alongside the potential for future growth?
Can the Kotak Get Assured Income Now Plan offer you an additional income source to achieve your aspirations?
As an investor, let’s explore the features, advantages, disadvantages, and returns of the Kotak Get Assured Income Plan using an Internal Rate of Return (IRR) analysis. This article will provide a comprehensive review of the Kotak Get Assured Income Now Plan.
Table of Contents:
What is the Kotak Get Assured Income Now Plan?
What are the features of the Kotak Get Assured Income Plan?
Who is eligible for the Kotak Get Assured Income Now Plan?
What are the benefits of the Kotak Get Assured In?
Grace period, Lapsed & Reduced Paid-up Policy and Revival of Kotak Get Assured Income Plan
What are the advantages of the Kotak Get Assured Income Gain Now Plan?
What are the disadvantages of the Kotak Get Assured Income Now Plan?
Research Methodology of Kotak Get Assured Income Now Plan
Benefit Illustration – IRR Analysis of Kotak Get Assured Income Now Plan
Kotak Get Assured Income Now Plan Vs Other Investments
Kotak Get Assured Income Now Plan Vs Pure Term + Equity Mutual Fund
Final Verdict on Kotak Get Assured Income Now Plan
What is the Kotak Get Assured Income Now Plan?
Kotak Get Assured Income Now Plan is a Non-Linked, Participating Savings Life Insurance Plan. Kotak Get Assured Income Now Plan is a limited pay participating plan, with Income Benefits, starting as early as the end of 1st policy month or after the end of the premium payment term; along with the flexibility to accumulate the income benefits and create a legacy for your loved ones.
What are the features of the Kotak Get Assured Income Now Plan?
- Secure your life & provide financial protection to your loved ones till 85 years of age.
- Flexibility to choose from 3 plan options to fulfil your goal: Early Income, Paid-up Additions and Premium Saver
- Income benefits start as early as the end of 1st Kotak Get Assured Income Now Plan policy month
- Comprehensive coverage for yourself & loved ones through 6 Riders
- Get Additional benefits with the same premium for Female Life
- Get additional benefits in case the premium is paid through the ECS/Auto Debit option
Who is eligible for the Kotak Get Assured Income Now Plan?
| Minimum | Maximum | |
| Age at entry | 90 days | 44/ 50/ 55 years |
| Maturity Age | 40 years | 85 years |
| Policy term | 85 years less Entry Age of Life Insured OR Fixed term of 40 years |
|
| Sum Assured | ₹ 4,00,000 | No Limit |
| Premium level (annual) | ₹ 50,000 | No Limit |
| Premium Paying Term | 6/ 8/ 10/ 12 years | |
| Premium paying Mode | Yearly, Half-yearly, Quarterly and Monthly | |
| Premium Modal Factor | Yearly – 100%, Half yearly – 51%, Quarterly – 26%, Monthly – 8.8% | |
What are the benefits of the Kotak Get Assured Income Now Plan?
i.) Death benefit
| Plan Option A & C: Early Income and Premium Saver | Plan Option B: Paid up Addition |
|
|
Where Sum Assured on death is HIGHEST of:
- ‘X’ times of Annualised Premium OR
- Sum Assured on Maturity OR
- 105% of Total premiums paid
ii.) Bonus
Cash Bonus and Paid-up Additions: At the end of each financial year throughout the Kotak Get Assured Income Now Plan policy term, the company may declare Cash Bonus Rates expressed as a percentage of the Sum Assured on Maturity and Paid-up Additions.
Interim Bonus: In the event of a death or surrender claim, an interim bonus (if declared) may be payable at such rate as may be decided by the Company.
Terminal Bonus: The Company may decide to pay a Terminal Bonus on the exit of the Kotak Get Assured Income Now Plan Policy and shall be a percentage of the Sum Assured on Maturity and Paid-Up Additions.
iii.) Maturity Benefit
| Under Plan Option A: Early Income option | Under Plan Option B: Paid-Up Addition option | Under Plan Option C: Premium Saver option |
|
|
|
Grace period, Lapsed & Reduced Paid-up Policy and Revival of Kotak Get Assured Income Now Plan
Grace Period
There is a grace period of 30 days from the due date for payment of premium for the yearly, half-yearly and quarterly modes, and 15 days for the monthly mode.
Lapsed and Reduced Paid-Up Policy
If Premiums are discontinued at any time during the first policy year, the policy shall lapse at the end of the grace period and no benefits will be payable.
After the Kotak Get Assured Income Now Plan policy acquires Surrender Value (on payment of first years’ premium) if the subsequent premiums are not paid within the grace period the Kotak Get Assured Income Now Plan policy will be converted into a Reduced Paid-Up policy by default
Revival
A lapsed / Reduced Paid-Up policy can be revived within five Kotak Get Assured Income Now Plan policy years from the due date of the first unpaid premium.
What are the advantages of the Kotak Get Assured Income Now (GAIN) Plan?
- You have the flexibility to encash the Paid-Up Additions as and when required by taking the Cash Value of Paid-Up Additions.
- An additional 1% on Sum Assured on Maturity will be offered for the female Life Insured.
- Policyholders can avail of health & well-being management services such as Telemedicine Consultation/Personal Medical Care & Lifestyle Management Programs, Emergency Response Services, Home Health care and Pharmacy access.
- Policyholders can have access to Well-being App which provides necessary tools for managing a healthy lifestyle.
What are the disadvantages of the Kotak Get Assured Income Now Plan?
Receiving early income benefits diminishes the compounding effect on the investment.
Research Methodology of Kotak Get Assured Income Now Plan
The Kotak Get Assured Income Now Plan provides customisable income and maturity benefits. Generally, it is a long-term investment spanning nearly 40-50 years.
Before committing to such a lengthy period, it is crucial to assess the returns as you will be tied to the investment for an extended time. Below is an Internal Rate of Return (IRR) analysis based on a benefit illustration from the Kotak Get Assured Income Now Plan policy brochure.
Benefit Illustration – IRR Analysis of Kotak Get Assured Income Now Plan
Consider a 35-year-old male who chooses the Kotak Get Assured Income Now Plan with an annual premium of ₹1,00,000 for a premium payment term of 10 years. The policy term in this scenario is 50 years, and the selected plan option is the Paid-Up Addition Option.
| Male | 35 years |
| Sum Assured | ₹ 12,00,000 |
| Policy Term | 50 years |
| Premium Paying Term | 10 years |
| Annualised Premium | ₹ 1,00,000 |
If he pays the premiums regularly, he will be eligible for maturity benefits along with accrued guaranteed additions. The assumed rates of return shown in the illustration are 4% p.a. and 8% p.a.
These assumed rates of return are not guaranteed and do not represent the maximum or minimum returns you might receive.
| At 4% p.a. | At 8% p.a. | ||||
| Age | Year | Annualised premium / Maturity benefit | Death benefit | Annualised premium / Maturity benefit | Death benefit |
| 35 | 1 | -1,00,000 | 12,00,000 | -1,00,000 | 12,00,000 |
| 36 | 2 | -1,00,000 | 12,00,000 | -1,00,000 | 12,00,000 |
| 37 | 3 | -1,00,000 | 12,00,000 | -1,00,000 | 12,00,000 |
| 38 | 4 | -1,00,000 | 12,00,000 | -1,00,000 | 12,00,000 |
| 39 | 5 | -1,00,000 | 12,00,000 | -1,00,000 | 12,00,000 |
| 40 | 6 | -1,00,000 | 12,00,000 | -1,00,000 | 12,00,000 |
| 41 | 7 | -1,00,000 | 12,00,000 | -1,00,000 | 12,00,000 |
| 42 | 8 | -1,00,000 | 12,00,000 | -1,00,000 | 12,00,000 |
| 43 | 9 | -1,00,000 | 12,00,000 | -1,00,000 | 12,00,000 |
| 44 | 10 | -1,00,000 | 12,00,000 | -1,00,000 | 12,00,000 |
| 45 | 11 | 0 | 12,00,000 | 0 | 12,00,000 |
| 46 | 12 | 0 | 12,00,000 | 0 | 12,00,000 |
| 47 | 13 | 0 | 12,00,000 | 0 | 12,00,000 |
| 48 | 14 | 0 | 12,00,000 | 0 | 12,00,000 |
| 49 | 15 | 0 | 12,00,000 | 0 | 12,00,000 |
| 50 | 16 | 0 | 12,00,000 | 0 | 12,00,000 |
| 51 | 17 | 0 | 12,00,000 | 0 | 12,00,000 |
| 52 | 18 | 0 | 12,00,000 | 0 | 12,00,000 |
| 53 | 19 | 0 | 12,00,000 | 0 | 12,00,000 |
| 54 | 20 | 0 | 12,00,000 | 0 | 12,00,000 |
| 55 | 21 | 0 | 12,00,000 | 0 | 12,00,000 |
| 56 | 22 | 0 | 12,00,000 | 0 | 12,00,000 |
| 57 | 23 | 0 | 12,00,000 | 0 | 12,00,000 |
| 58 | 24 | 0 | 12,00,000 | 0 | 12,00,000 |
| 59 | 25 | 0 | 12,00,000 | 0 | 12,00,000 |
| 60 | 26 | 0 | 12,00,000 | 0 | 12,00,000 |
| 61 | 27 | 0 | 12,00,000 | 0 | 12,00,000 |
| 62 | 28 | 0 | 12,00,000 | 0 | 12,00,000 |
| 63 | 29 | 0 | 12,00,000 | 0 | 12,00,000 |
| 64 | 30 | 0 | 12,00,000 | 0 | 12,00,000 |
| 65 | 31 | 0 | 12,00,000 | 0 | 12,00,000 |
| 66 | 32 | 0 | 12,00,000 | 0 | 12,00,000 |
| 67 | 33 | 0 | 12,00,000 | 0 | 12,00,000 |
| 68 | 34 | 0 | 12,00,000 | 0 | 12,00,000 |
| 69 | 35 | 0 | 12,00,000 | 0 | 12,00,000 |
| 70 | 36 | 0 | 12,00,000 | 0 | 12,00,000 |
| 71 | 37 | 0 | 12,00,000 | 0 | 12,00,000 |
| 72 | 38 | 0 | 12,00,000 | 0 | 12,00,000 |
| 73 | 39 | 0 | 12,00,000 | 0 | 12,00,000 |
| 74 | 40 | 0 | 12,00,000 | 0 | 12,00,000 |
| 75 | 41 | 0 | 12,00,000 | 0 | 12,00,000 |
| 76 | 42 | 0 | 12,00,000 | 0 | 12,00,000 |
| 77 | 43 | 0 | 12,00,000 | 0 | 12,00,000 |
| 78 | 44 | 0 | 12,00,000 | 0 | 12,00,000 |
| 79 | 45 | 0 | 12,00,000 | 0 | 12,00,000 |
| 80 | 46 | 0 | 12,00,000 | 0 | 12,00,000 |
| 81 | 47 | 0 | 12,00,000 | 0 | 12,00,000 |
| 82 | 48 | 0 | 12,00,000 | 0 | 12,00,000 |
| 83 | 49 | 0 | 12,00,000 | 0 | 12,00,000 |
| 84 | 50 | 0 | 12,00,000 | 0 | 12,00,000 |
| 85 | 30,94,690 | 12,00,000 | 1,44,95,153 | 12,00,000 | |
| IRR | 2.51% | 6.02% | |||
In the 4% scenario, the final maturity value at the end of 50 years is ₹30.94 lakhs with an IRR of 2.51%. In the 8% scenario, the final maturity value at the end of 50 years is ₹1.44 crores with an IRR of 6.02% as per the Kotak Get Assured Income Now Plan maturity calculator
Holding an investment for such a long period and receiving below-par returns does not add significant value to your investment portfolio. Additionally, life coverage until age 85 is unnecessary, as your retirement corpus will suffice.
Therefore, investing in the Kotak Get Assured Income Now Plan may not help you achieve your financial goals.
Kotak Get Assured Income Now Plan Vs Other Investments
The Kotak Get Assured Income Now Plan combines insurance and investment in one package. However, an analysis of the returns suggests that holding onto a long-term investment that does not beat inflation is not beneficial.
Let’s consider an alternative strategy that separates insurance coverage and investments into two different instruments.
Kotak Get Assured Income Now Plan Vs Pure Term + Equity Mutual Fund
For instance, a pure-term life insurance policy with a sum assured of ₹12 lakhs for 25 years (coverage until age 60) costs ₹13,800 annually, with a premium payment term of 10 years. After paying the life insurance premium, you can save ₹86,200 each year.
This amount can be invested according to your risk profile.
| Pure Term Life Insurance Policy | |
| Sum Assured | ₹ 12,00,000 |
| Policy Term | 25 years |
| Premium Paying Term | 10 years |
| Annualised Premium | ₹ 13,800 |
| Investment | ₹ 86,200 |
|
Age |
Year |
Term Insurance premium + Equity Mutual Fund |
Death benefit |
|
35 |
1 |
-1,00,000 |
12,00,000 |
|
36 |
2 |
-1,00,000 |
12,00,000 |
|
37 |
3 |
-1,00,000 |
12,00,000 |
|
38 |
4 |
-1,00,000 |
12,00,000 |
|
39 |
5 |
-1,00,000 |
12,00,000 |
|
40 |
6 |
-1,00,000 |
12,00,000 |
|
41 |
7 |
-1,00,000 |
12,00,000 |
|
42 |
8 |
-1,00,000 |
12,00,000 |
|
43 |
9 |
-1,00,000 |
12,00,000 |
|
44 |
10 |
-1,00,000 |
12,00,000 |
|
45 |
11 |
0 |
12,00,000 |
|
46 |
12 |
0 |
12,00,000 |
|
47 |
13 |
0 |
12,00,000 |
|
48 |
14 |
0 |
12,00,000 |
|
49 |
15 |
0 |
12,00,000 |
|
50 |
16 |
0 |
12,00,000 |
|
51 |
17 |
0 |
12,00,000 |
|
52 |
18 |
0 |
12,00,000 |
|
53 |
19 |
0 |
12,00,000 |
|
54 |
20 |
0 |
12,00,000 |
|
55 |
21 |
0 |
12,00,000 |
|
56 |
22 |
0 |
12,00,000 |
|
57 |
23 |
0 |
12,00,000 |
|
58 |
24 |
0 |
12,00,000 |
|
59 |
25 |
0 |
12,00,000 |
|
60 |
26 |
0 |
|
|
61 |
27 |
0 |
|
|
62 |
28 |
0 |
|
|
63 |
29 |
0 |
|
|
64 |
30 |
0 |
|
|
65 |
31 |
0 |
|
|
66 |
32 |
0 |
|
|
67 |
33 |
0 |
|
|
68 |
34 |
0 |
|
|
69 |
35 |
0 |
|
|
70 |
36 |
0 |
|
|
71 |
37 |
0 |
|
|
72 |
38 |
0 |
|
|
73 |
39 |
0 |
|
|
74 |
40 |
0 |
|
|
75 |
41 |
0 |
|
|
76 |
42 |
0 |
|
|
77 |
43 |
0 |
|
|
78 |
44 |
0 |
|
|
79 |
45 |
0 |
|
|
80 |
46 |
0 |
|
|
81 |
47 |
0 |
|
|
82 |
48 |
0 |
|
|
83 |
49 |
0 |
|
|
84 |
50 |
0 |
|
|
85 |
|
13,80,66,502 |
|
|
|
|
|
|
|
|
IRR |
11.32% |
|
If the savings are invested in an Equity Mutual fund for 10 years, the maturity proceeds, after accounting for capital gains tax, would be ₹13.80 crores at the end of 50 years. The IRR for this combined investment strategy (pure-term insurance and Equity Mutual Fund) is 11.32% (post-tax return).
|
Equity Mutual Fund Tax Calculation |
|
|
Maturity value after 20 years |
15,76,49,288 |
|
Purchase price |
8,62,000 |
|
Long-Term Capital Gains |
15,67,87,288 |
|
Exemption limit |
1,25,000 |
|
Taxable LTCG |
15,66,62,288 |
|
Tax paid on LTCG |
1,95,82,786 |
|
Maturity value after tax |
13,80,66,502 |
To match the previous illustration, we assume that the Equity Mutual Fund investment is held until the end. However, you have the flexibility to redeem the units as needed, providing liquidity. Additionally, the returns are superior.
These benefits of liquidity and higher returns are lacking in the Kotak Get Assured Income Now Plan.
Final Verdict on Kotak Get Assured Income Now Plan
The Kotak Get Assured Income Now Plan offers life cover, maturity benefits, and income benefits, all of which can be customized to meet your needs. This flexibility is the primary highlight of the plan.
However, the policy term ranges from 45 to 50 years, and holding a long-term investment without significant value addition is impractical.
Additionally, life coverage up to age 85 is unnecessary, reducing the plan’s credibility. This makes Kotak’s Get Assured Income Now Plan unfit for your investment basket and also it has a high agent commission
Alternatively, you can adopt a diversified investment strategy tailored to your personal goals, risk profile, and time horizon. This approach provides greater flexibility and better returns.
For insurance coverage, it is highly recommended to opt for a pure-term life insurance policy to ensure adequate life cover.
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