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Insurance is a tool or device through which some risks can be reduced, eliminated or
transferred. Every individual and business face some uncertainties (i.e. possibility of encountering
loss due to certain events) and these can be to a certain extent removed through insurance.
Insurance is thus, a tool by which the loss likely to be caused by an uncertain event is spread
amongst a number of people who face similar risks. Insurance is a cooperative way of bearing risks.
Insurance provides certainty (i.e. protection by way of compensation) for some uncertainty (i.e.
possibility of loss due to an unforeseen event.)
This project titled ULIPs: Suitable for all it is an attempt to bring out the overview features and
product offered by the kotakmahindra. This project tries to give the brief history, mission and
objectives of the company and its product.
This project would discuss the key features, benefits and how the plan works which can suits to the
policy holders. The project also discuss the financial position of kotakmahindra its last year profits, it
will also try to bring the difference with other life insurance plan given by other companies.
In this project I have tried to bring out some of the important product offered by the kotakmahindra.


A summer project is a golden opportunity for learning and self development. I consider myself very
lucky and honored to have so many wonderful people lead me through in completion of this project.

I wish to express my indebted gratitude and special thanks to " Your Company Head, Post, Company
name City Name" who in spite of being extraordinarily busy with her/his duties, took time out to
hear, guide and keep me on the correct path and allowing me to carry out my industrial project work
at their esteemed organization and extending during the training.I do not know where I would been
without him.

A humble Thank you Sir.

I express my deepest thanks to Name of growth manager (RGM), Area growth manager (AGM), for
taking part in useful decision & giving necessary advices and guidance and arranged all facilities to
make life easier. I choose this moment to acknowledge their contribution gratefully.

It is my glowing feeling to place on record my best regards, deepest sense of gratitude to Mr. XYZ
Growth Officer (GO), Mr.XYZGrowth Officer (GO) Mr.XYZ Growth Officer (GO),
Mr.XYZGrowth Officer (GO), Mr. XYZ (GO), Mr. XYZGrowth Officer (GO) for their judicious
and precious guidance which were extremely valuable for my study both theoretically and

I express my deepest thanks to Prof. ............ for their guidance and support. He supported to us by
showing different method of information collection about the company. He helped all time when we
needed and he gave right direction toward completion of project.



2 Introduction
Life Insurance
Company profile
Product profile
Frequently Asked Questions (Insurance)

3 Ulip
ULIP & Consumer Perspective

Working Of Ulips

Current NPV OF Ulips
Frequently Asked Questions (Ulip)

4 Survey Report
Research Methodology
Objective of the study
Method of Data Collection

5 Data Analysis & Interpretation

6 Finding




10 Bibliography

11 Annexure



The business of insurance is related to the protection of the economic value assets. Every asset has a
value. The asset would have been created through the efforts of the owner. The asset is valuable to
the owner, because he expects to get some benefits from it. The benefit may be an income or some
thing else. It is a benefit because it meets some of his needs. In the case of a factory or a cow, the
product generated by is sold and income generated. In the case of a motor car, it provides comfort
and convenience in transportation. There is no direct income.

Every asset is expected to last for a certain period of time during which it will perform. After that,
the benefit may not be available. There is a life-time for a machine in a factory or a cow or a motor
car. None of them will last for ever. The owner is aware of this and he can so manage his affairs that
by the end of that period or life-time, a substitute is made available. Thus, he makes sure that the
value or income is not lost. However, the asset may get lost earlier. An accident or some other
unfortunate event may destroy it or make it non-functional. In that case, the owner and those deriving
benefits and the planned substitute would not have been ready. There is an adverse or unpleasant
situation. Insurance is a mechanism that helps to reduce the effect of such adverse situations.

In life and in business, there are various events which may cause financial loss to an individual
business. Some of the events also called as risks can be avoided or prevented while some of them
can be reduced or transferred to another person. Insurance is a tool or device through which some
risks can be reduced, eliminated or transferred. Every individual and business face some
uncertainties (i.e. possibility of encountering loss due to certain events) and these can be to a certain
extent removed through insurance.
Insurance is thus, a tool by which the loss likely to be caused by an uncertain event is spread
amongst a number of people who face similar risks. Insurance is a cooperative way of bearing risks.
Insurance provides certainty (i.e. protection by way of compensation) for some uncertainty (i.e.
possibility of loss due to an unforeseen event.)

Insurance is a contract between two parties, whereby one party, (called insurer) undertakes, in
exchange for a fixed sum (called premium) to pay the other party (called insured) fixed amount
of money (called compensation) on the happening of a certain event.
The insurer i.e. the insurance company undertakes to indemnify (make good the loss) to the
insured for loss or damage arising as a result of the particular risks.
Basically, there are two types of insurance i.e. life & non-life insurance. Life insurance covers
the risks to an individuals life while non-life insurance covers risks to business and includes fire
insurance, marine insurance, liability insurance etc.
Assets are insured, because they are likely to be destroyed, through accidental occurrences. Such
possible occurrences are called perils. Fire, floods, breakdowns, lightning, earthquakes, etc, are
perils. If such perils can cause damage to the asset, we say that the asset is exposed to that risk. Perils
are the events. Risks are the consequential losses or damages. The risk to a owner of a building,
because of the peril of an earthquake, may be a few lakhs or a few crores of rupees, depending on the
cost of the building and the contents in it.
The risk only means that there is a possibility of loss or damage. The damage may or may not
happen. Insurance is done against the contingency that it may happen. There has to be an uncertainty
about the risk. Insurance is relevant only if there are uncertainties. If there is no uncertainty about the
occurrence of an event, it cannot be insured against. In the case of a human being, death is certain,
but the time of death is uncertain. In the case of a person who is terminally ill, the time of death is
not uncertain, though not exactly known. He cannot be insured.
Insurance does not protect the asset. It does not prevent its loss due to the peril. The peril cannot be
avoided through insurance. The peril can sometimes be avoided, through better safety and damages
control management. Insurance only tries to reduce the impact of the risk on the owner of the asset
and those who depend on that asset. It only compensates the losses and that too, not fully.
Only economic consequences can be insured. If the loss is not financial, insurance may not be
possible. Examples of non-economic losses are love and affection of parents, leadership of managers,
sentimental attachments to family heirlooms, innovative and creative abilities, etc.


Life Insurance Is a Contract whereby the insurer in consideration of a premium undertakes to pay a
certain sum of money, either on the death of the insured or on the expiry of a certain period,
whichever is earlier
In life insurance; risk to human life is covered .this risk may be in the form of accident or death. A
person may or may not meet with an accident. Death is certain to happen but when it will happen is
uncertain. Thus, due to accident or death of a person his dependants will suffer financially. Life
Insurance provides certainty against these uncertainties
Hence, in life insurance actually an assurance is given by the insurance company that it will pay a
certain sum of money either on death of the assured or maturity, whichever occurs earlier
Under whole-life policy, money is payable at the death of assured (policy-holder) and under
endowment policy, money is payable on the assureds death or on the maturity of the policy,
whichever occurs earlier.


1. Almost all life policies are long term. Most of them are for a term of 15 years or more.

2. Sum of compensation is fixed. Unlike general insurance, compensation does not depend on
damage caused to the subject matter. Compensation, which is an assured, has to be paid either
on death of assured or after maturity, whichever is earlier.

3. At times, amount of policy may be collected by the survivors of the assured in case of his

4. Life insurance policy may be surrendered by the assured before its maturity.

5. A person can take any number of life insurance policies and each and every policy is liable to
pay compensation, provided the other conditions are met.

6. Nomination: in life insurance, the assured can nominate another person who is entitled to
receive the sum assured on his death.

7. Assignment: a life insurance policy can be assigned to another person (the assignee). The
assignee then gets the same rights as the policyholder.


1) General elements of a valid contract: Like valid offer acceptance of an offer, competent
parties, consideration, legal purpose etc. must be fulfilled.

2) Special element of a valid contract of insurance:

(a) Utmost good faith: both the parties should disclose all
Material facts.
(b) I nsurable interest: the person taking out a policy on his own life has insurance
interest but in case he wants to take a policy on another persons life, then he should
have insurable interest in the others life. Moreover, insurable interest must exist
only at the time of taking out the policy and need not exist at the time of maturity of
the policy.

3) Warranties: Are ascertaining specific conditions added to the contract. These warranties are
over and above the basic terms of the policy. They must be mutually agreed upon by both the
parties. Any breach of a warranty by either party can nullify the contract. Warranties may be
express (stated openly) or implied (hidden).

4) Terms of policy: Are the specific terms and conditions. Viz. the period of time covered, the
nature of risk, premium amount, policies amount etc. which is agreed upon by both the
parties. All these terms must be strictly observed by both the parties. Both the parties are
bound by these terms. Any breach of any one of the given conditions by either party can
render the insurance contract (null and void) i.e. not enforceable in the court of law.

Risks and uncertainties are part of life's great adventure -- accident, illness, theft, natural disaster -
they're all built into the working of the Universe, waiting to happen.

Role 1: Life insurance as "Investment"
Insurance is an attractive option for investment. While most people recognize the risk hedging and
tax saving potential of insurance, many are not aware of its advantages as an investment option as
well. Insurance products yield more compared to regular investment options, and this is besides the
added incentives (read bonuses) offered by insurers.
You cannot compare an insurance product with other investment schemes for the simple reason that
it offers financial protection from risks, something that is missing in non-insurance products.
In fact, the premium you pay for an insurance policy is an investment against risk. Thus, before
comparing with other schemes, you must accept that a part of the total amount invested in life
insurance goes towards providing for the risk cover, while the rest is used for savings.
In life insurance, unlike non-life products, you get maturity benefits on survival at the end of the
term. In other words, if you take a life insurance policy for 20 years and survive the term, the amount
invested as premium in the policy will come back to you with added returns. In the unfortunate event
of death within the tenure of the policy, the family of the deceased will receive the sum assured.
Now, let us compare insurance as an investment options. If you invest Rs 10,000 in PPF, your money
grows to Rs 10,950 at 9.5 per cent interest over a year. But in this case, the access to your funds will
be limited. One can withdraw 50 per cent of the initial deposit only after years.
The same amount of Rs 10,000 can give you an insurance cover of up to approximately Rs 5-12
lakhs (depending upon the plan, age and medical condition of the life insured, etc) and this amount
can become immediately available to the nominee of the policyholder on death.
Thus insurance is a unique investment avenue that delivers sound returns in addition to protection.
Role 2: Life insurance as "Risk cover"
First and foremost, insurance is about risk cover and protection - financial protection, to be more
precise - to help outlast life's unpredictable losses. Designed to safeguard against losses suffered on
account of any unforeseen event, insurance provides you with that unique sense of security that no
other form of investment provides. By buying life insurance, you buy peace of mind and are prepared
to face any financial demand that would hit the family in case of an untimely demise.
To provide such protection, insurance firms collect contributions from many people who face the
same risk. A loss claim is paid out of the total premium collected by the insurance companies, who
act as trustees to the monies.
Insurance also provides a safeguard in the case of accidents or a drop in income after retirement. An
accident or disability can be devastating, and an insurance policy can lend timely support to the
family in such times. It also comes as a great help when you retire, in case no untoward incident
happens during the term of the policy.
With the entry of private sector players in insurance, you have a wide range of products and services
to choose from. Further, many of these can be further customized to fit individual/group specific
needs. Considering the amount you have to pay now, it's worth buying some extra sleep.

Role 3: Life insurance as "Tax planning"
Insurance serves as an excellent tax saving mechanism too. The Government of India has offered tax
incentives to life insurance products in order to facilitate the flow of funds into productive assets.
Under Section 88 of Income Tax Act 1961, an individual is entitled to a rebate of 20 per cent on the
annual premium payable on his/her life and life of his/her children or adult children. The rebate is
deductible from tax payable by the individual or a Hindu Undivided Family. This rebate is can be
availed up to a maximum of Rs 12,000 on payment of yearly premium of Rs 60,000. By paying Rs
60,000 a year, you can buy anything upwards of Rs 10 lakhs in sum assured. (Depending upon the
age of the insured and term of the policy) This means that you get an Rs 12,000 tax benefit. The
rebate is deductible from the tax payable by an individual or a Hindu Undivided Family.

SWOT ANALYSIS of Insurance Sector in India
Excellent services.
Customization of Products as per customers needs.
Brand Image.
Business Experience.
Strong Financial Base.
Innovative products, Technology, organization culture and climate.
The company has a large network of banks ATMs which is helpful to customer for the payment.
Strong Brand name.

Lot of competitors are in the market offer same product by the title difference in the premium and
Misguidance by the agents of various Insurance companies regarding the returns.

Huge market is literally untapped. Out of estimated 320 million insurable markets only 20% of the
population is insured.
Health insurance and pension Schemes, an estimated market potential of approximately $15 billion.
Pure risks covers for tourists. Analyze the best such schemes have become popular in China. Cure
should be taken to innovative products to suit these.
New market penetrations such as Mauritius, Sri Lanka, Nepal, Bhutan and Bangladesh are made to
exploit the business opportunities there.
Continuous increase in the per capita income of the people.

Entry of many other private companies with equally strong experience and financial strength of
foreign partners making the competition difficult and saturating the urban markets.
LIC has woken up from sleep and is following competitive strategies. Its huge surplus in Life Fund
gives a capability to lodge Price war. It has also major edge over its competitors having the tag of
Govt. limited company and stroromgmarket .
Current Government policies do not encourage Gross Domestic Savings. If the Tax Liability of the
service class rises, the customer will have little money to invest.
For the Insurance sector Government set the authority that is IRDA (Insurance Regulatory and
Development Authority) which is undertaken to track record of all the companies and change rules
day by day more rigid which is very difficult for the companies.
In the competition some companies offer very low permission for dominate the other players.


Organisation profile
Kotak Mahindra Old Mutual Life Insurance Ltd.
Old mutual plc is a London-listed fortune 500 international financial services group focusing on
asset gathering and asset management. At 31 December 2005, old mutual had more than 7 million
life assurance policies, 3.6 million banking customers and over 550,000 general insurance policies.
Its funds under management exceeded $310 billion. The group has a substantial presence in the UK,
US and South African markets, it further expanded its European presence through the acquisition of
skandia in early 2006.
Established in 1984, the Kotakmahindra group has long been one of Indias most reputed financial
organizations. Kotakmahindra today is one of Indias leading financial solutions, offering complete
financial solutions that encompass every sphere of life. The group has a net worth of over Rs. 2,840
crore, employs around 7,800 people in its various business and has a distribution network of
branches, franchisees, representative offices and satellite offices across 264 cities and towns in India
and offices in New York, London, Dubai and Mauritius. The group services over 1.6 million
customer accounts.
Kotak Mahindra Old Mutual Life Insurance is a 76:24 joint venture between Kotak Mahindra
Bank Ltd. and Old Mutual plc.Kotak Mahindra Old Mutual Life Insurance is one of the fastest
growing insurance companies in India and has shown remarkable growth since its inception in 2001.
Features of Kotak Mahindra and Old Mutual plc at a glance:
Brand Equity Domain Knowledge
Branch Network Technology
Entrepreneur Employees Product Innovation
Knowledge of Indian Market Training Expertise
Access to customer base Global Perspectives
Distribution Associates System and Process
Multi- Channel Working System

Old Mutual, a company with 160 years experience in life insurance, is an international financial
services group listed on the London Stock Exchange and included in the FTSE 100 list of companies,
with assets under management worth $ 400 Billion as on 30th June, 2006. For customers, this joint
venture translates into a company that combines international expertise with the understanding of the
local market.
At Kotak Life Insurance, we aim to help customers take important financial decisions at every stage
in life by offering them a wide range of innovative life insurance products, to make them financially
The joint venture translates into a company, which combines international expertise in insurance,
advice and fund management with an understanding of the local markets


1986 Kotak Mahindra Finance Limited starts the activity of Bill Discounting
1987 Kotak Mahindra Finance Limited enters the Lease and Hire Purchase market
1990 The Auto Finance division is started
1991 The Investment Banking Division is started. Takes over FICOM, one of
Indias largest financial retail marketing networks
1992 Enters the Funds Syndication sector
1995 Brokerage and Distribution businesses incorporated into a separate company
Kotak Securities. Investment Banking division incorporated into a separate
company Kotak Mahindra Capital Company
1996 The Auto Finance Business is hived off into a separate company Kotak
Mahindra Primus Limited. Kotak Mahindra takes a significant stake in Ford
Credit Kotak Mahindra Limited, for financing Ford vehicles. The launch of
Matrix Information Services Limited marks the Groups entry into information
1998 Enters the mutual fund market with the launch of Kotak Mahindra Asset
Management Company.
Kotak Mahindra ties up with Old Mutual plc. for the Life Insurance business.
2000 Kotak Securities launches its online broking site. Formal
commencement of private equity activity through setting up of Kotak
Mahindra Venture Capital Fund.
2001 Matrix sold to Friday Corporation Launches Insurance Services
2003 Kotak Mahindra Finance Ltd. converts to bank

Our Vision and Mission Statement

An uncommon bond. Strengthened by a common vision.
Apart from common beliefs, values and objectives we believe in the vision of a better
tomorrow. It is this deep veneer of faith that has brought us together and fortified our bond.

The global Indian financial services brand
Our customers will enjoy the benefits of dealing with a global Indian brand that best
understands their needs and delivers customised pragmatic solutions across multiple
platforms. We will be a world-class Indian financial services group. Our technology and
best practices will be benchmarked along international lines while our understanding of
customers will be uniquely Indian. We will be more than a repository of our customers'
savings. We, the group, will be a single window to every financial service in a customer's

The most preferred employer in financial services
A culture of empowerment coupled with a spirit of enterprise, attracts bright minds with an
entrepreneurial streak to join us and stay with us. Working with a home-grown,
professionally-managed company, which has partnerships with international leaders, gives
our people a perspective that is universal as well as unique.

The most trusted financial services company
We will create an ethos of trust across all our constituents. Adhering to high standards of
compliance and corporate governance will be an integral part of building trust.

Value creation
Value creation rather than size alone will be our business driver.




a) Kotak Retirement Income Plan

The Kotak Retirement Income Plan is a savings plan designed to meet your
post retirement needs. It is a plan that gives you jeene Ki azaadi by giving
you the choice to remain independent even after retirement.


1. In this plan minimum age of 18 years of old and maximum age is 60 years.

2. You may buy an annuity either from Kotak Life Insurance.

3. You can make lump sum injections into your policy at any time before retirement.

4. For a with cover plan you have the facility of Automatic cover
Maintenance, which ensures that the cover remains in force even when youmiss the premium
payments. This facility is available after the first 3 years of the term.
5. You may exercise the option of paying premium from the Supplementary Accumulation Account,
created from will be created from lump sum injections, if the need arises.

b) Kotak Endowment Plan

An Endowment policy is a combination of savings along with risk cover. These policies designed to
accumulate wealth and at the same time cover your life. In simple words, issued for specific time
periods during which you pay a regular premium. If you die during policy, your beneficiaries will
receive the sum assured along with the accumulated bonus a outlive the
Policy tenure you will receive the sum assured along with accumulated bonus.

Combining risk cover with financial savings, endowment policies are among the popular life
insurance policies.

Policy holders benefit in two ways from a pure endowment insurance policy. In case of death
during the tenure, the beneficiary gets the sum assured. If the individual survives the policy tenure,
he gets back the premiums paid with other investment returns and benefits like bonuses.

In addition to the basic policy, insurers offer various benefits such as double endowment and
marriage/ education endowment plans.

The concept of providing the customers with better returns has been gaining importance in
recent times. Hence, insurance companies have been coming out with new and better ULIP versions
of endowment policies. Under such life insurance policies the customers are also provided with an
option of investing their premiums into the markets, depending on their risk appetite, using various
fund options provided by the insurer, these life insurance policies help the customer profit from
rising markets.

The premiums paid and the returns accumulated through pure endowment policies and their
ULIP variants are tax exempt.


1 In this plan minimum age of 18 years of old and maximum age is 65 years.

2 You can take a loan against your policy has been in force for at least three years.

3 You have the option of paying premiums quarterly, half yearly or yearly.

4 You have the benefit of a 15-day free look period.

c) Kotak Flexi plan


1. Choice of 5 professionally managed funds included Gilt Fund, Floating
Rate Fund, Bond Fund, Balanced Fund, Growth Fund.

2. Add lump sum injections as and when suitable

3. Premium holiday facilities

4. Riders options for enhanced protection

5. Loan facilities in case of emergencies

6. Simplified documentation and procedures

d) Kotak Capital Multiplier Plan

The Kotak Capital Multiplier Plan is a participating plan that is built in such a way that it allows your
money to multiply, and gives you the flexibility of using this money the way you need it, in regular
and irregular withdrawals. This is an endowment plan, which is very flexible and has a lot of in-built
This life insurance policy is favoured by many people because it gives periodic payments
during the term of policy. In other words, a portion of the sum assured is paid out at regular
intervals. If the policy holder survives the term, he gets the balance sum assured.

In case of death during the policy term, the beneficiary gets the full sum assured.

New ULIP versions of money back policies are also being offered by various life insurers.


1) In this plan minimum age of 18 years of old and maximum age is 60 years.

2) At the start of your withdrawals period, you can draw the full proceeds or you can draw up to 50%
of your basic sum assured or accumulation account, whichever is higher.

3) In addition to the regular premiums, you can make lum sum injection into your plan during the
premium paying period. A Supplementary Accumulation Account will be created.

4) You have the facility of Automatic Cover Maintenance, which ensures that the policy remains in
force even when you miss the premium payments. This facility is available after the first 3 years of
the term.

e) Kotak Child Advantage Plan

The Kotak Child Advantage Plan is an investment plan designed to meet your child s future needs. It
is a plan that gives your child the azaadi to realize his/her dreams. This is an endowment plan where
the life insured is the child. This is a participating plan.


1. In this plan minimum age of 0 years of old and maximum age is 17 years.

2.You may take a loan against this plan, after the policy has been in force forat least three years.

3.You have the option of paying premiums quarterly, half yearly or yearly.

4.You have the benefit of a 15-day free look period.

f) ULIPs

1. ULIPs are market-linked life insurance products that provide a combination of life
cover and wealth creation options.

2. A part of the amount that people invest in a ULIP goes toward providing life cover,
while the rest is invested in the equity and debt instruments for maximising returns. .

3. ULIPs provide the flexibility of choosing from a variety of fund options depending on
the customers risk appetite. One can opt from aggressive funds (invested largely in the
equity market with the objective of high capital appreciation) to conservative funds
(invested in debt markets, cash, bank deposits and other instruments, with the aim of
preserving capital while providing steady returns).

4. ULIPs can be useful for achieving various long-term financial goals such as planning
for retirement, childs education, marriage etc.


1. Initially, calculate the exact amount of insurance that you need;
2. Decide which product suits you best based on your life stage and need,
3. Calculate the premium that you need to pay on the basis of the product that you have decided
to buy;
4. Once you have decided on all the above parameters, get in touch with a Life Advisor at any of
the Kotak Life Insurance branch offices.
5. The Life Advisor will assist you in filling up a proposal form. In addition to a proposal form,
you need to submit some financial documents that are required in order to buy a policy. The
Life Advisor will notify the list of financial documents required for the same.

Frequently Asked Questions

1. What is Life Insurance?
Life Insurance is a contract between you and a life insurance company, which provides your
beneficiary with a pre-determined amount in case of your death during the contract term.
Buying insurance is extremely useful if you are the principal earning member in the family. In case
of your unfortunate premature demise, your family can remain financially secure because of the life
insurance policy that you have purchased.
The primary purpose of life insurance is therefore protection of the family in the event of death.
Today, insurance is also seen as a tool to plan effectively for your future years, your retirement, and
for your children's future needs. Today, the market offers insurance plans that not just cover your life
and but at the same time grow your wealth too.

2. Do you need life insurance?
If you have dependants and financial responsibilities towards them, then you certainly need
Having a family means dependants, which, in turn means financial commitments. Financial
commitments come in the form of loans, children's education, medical expenses etc.
Imagine what would happen if you were to lose your life suddenly or become disabled and cannot
earn. Being insured in a situation like this is a necessity.
When you insure your life, in effect what you are doing is insuring your earning capacity. This
guarantees that your dependants will be able to continue living without financial hardships even in
case of your demise.
Most insurance plans available today come with a savings element built into it. These policies help
you plan not only for protection against death but also for a financially independent future, which
would enable you to have a comfortable retirement. For example, KotakPreferred Retirement Plans
such as Kotak Retirement Income Plan and Kotak Capital Multiplier Plan.

3. How much does life insuranc?
In order to buy a life insurance policy, you must pay premiums to the life insurance company. The
amount of premiums payable depends upon the type of policy, term of policy contract, sum assured
and your age.You could pay these premiums monthly/ half-yearly/ annually/ or as a single premiums.
4. How else does life insurance help?
The primary need is buying financial security for your family. Other aspects that insurance helps
fulfill are:
Tax benefits
The Tax exemption available under our insurance and pension policies are described below:

Benefit is available to individual assessee and Hindu Undivided Family assessee.
In case of individual assessee - himself/herself, spouse, children of such
In case of HUF assessee - any member of HUF.
Premiums paid under a life insurance policy are eligible for deduction under Section
80C* of the Act, subject to the provisions of the said section.
Contributions to a pension plan are eligible for deduction under Section 80CCC* of
the Act, subject to the provisions of the said section.

*The aggregate amount of deduction under section 80C and 80CCC shall not exceed one lakh

The proceeds under a life insurance policy are exempt under Section 10(10D) of the
Act, subject to the provisions of the said section.

Note : If the amount of premium paid in a financial year for a policy is in excess of
10% of the actual capital sum assured, then deduction will be allowed only for
premiums up to 10% of the actual capital sum assured.

As a tool of financial planning
Most insurance plans available today have a built in savings element. Plans like the Kotak
Endowment Plan, Kotak Money back Plan, Kotak Child Advantage Plan, Kotak Preferred
Retirement Plans, etc allow you to meet your dual financial goals of life cover and Savings for the
future. Collateral security for loans

You may avail of a loan from the insurance company against certain plans. Your policy could also be
pledged as a collateral to raise funds from banks and other financial institutions. In case of your
unfortunate death the loans may be repaid from the proceeds of the life insurance policy.

Savings Insurance promotes compulsory savings with regular premium payments and helps build up
a corpus of funds along with financial security for the dependants in case of premature death. For
your medical needs and that of your family

Hospitalization costs and quality healthcare is becoming increasingly expensive. Without insurance,
you can actually face a situation where you have withdrawn all your money and borrowed to pay the
medical bills. This can be provided with our Critical Illness Benefit. Insurance provides you the
option of covering yourself towards any critical illnesses that can become extremely costly.
Choosing this facility pays you a lump sum upon diagnosis of certain diseases like cancer, kidney
failure, heart attack, stroke, coronary bypass, vital organ transplants, Alzheimer's disease, paralysis,

5. How much do I insure myself for?
One of the simplest rules is to assume that insurance is a replacement for your lost earning capacity.
Calculate your total income for the years that you expect to work.

Assuming that the prevailing interest rate is 8%, you need to insure your life for at least 12 times
your current annual income. Assuming that a family needs Rs.100 annually for household
expenditure and the rate of interest would be at 8%, then the breadwinner needs to have a life
insurance policy of approximately Rs.1200. If the insurance amount were to be put in the bank by the
family, the family would get a comfortable Rs.96 p.a., which would at least let the family maintain
the current life style.
However to calculate your insurance need more precisely, use the following steps:
Calculate Monthly Livable Income required (Post tax). This is the monthly amount
that the survivors of the policyholder will need in the event of his death. This is taken
at 70% of the current total family expenses. Denote this as "M".
Calculate Monthly Income required (Pre tax) as M/ (100-t)%. Denote this as "M1".
Here t = Tax rate.
Calculate Annual Income (A) = M1*12.
Assume Estimated-earning rate on capital as 8%. Denote this as "r".
Calculate Capital livable income required (C ) as A/ r%.
Subtract Existing Insurance Cover amount (if any) from "C".
The final amount you arrive at is the amount for which you should buy insurance.
6. What is Term Insurance?
Term Insurance, also known as pure life cover, is the cheapest and the simplest form of insurance.
Under this insurance policy, against payment of regular premium, the insurer agrees to pay your
beneficiaries the sum assured in event of your premature death. However, if you survive till the end
of the policy term, nothing is payable to you. This policy has no savings component and the
premiums you pay are purely a cost to buy you life cover. For example, Kotak Term Plan.

This is suitable for you if
You are looking for a low cost life cover without any savings benefits attached. Or
You are at that stage in life where insurance cover is vital but you cannot afford high
premium payment due to low income.

Further if you are a non-smoker not only good health is guaranteed but also cheaper insurance
through the Kotak Preferred Term Plan.

7. What is an Endowment Policy?
An Endowment Policy is a combination of savings along with risk cover. These policies are
specifically designed to accumulate wealth and at the same time cover your life. In simple words,
these polices are issued for specific time periods during which you pay a regular premium. If you die
during the tenure of the policy, your beneficiaries will receive the sum assured along with the
accumulated bonus additions and if you outlive the policy tenure you will receive the sum assured
along with accumulated bonus additions (if any). For example, Kotak Endowment Plan.

This is suitable for you if
You want to accumulate capital for anticipated financial needs like buying an asset
such as a home, providing for your old age, your children's education, marriage, etc.

8. Is there any policy where I can receive money during the tenure of the policy?
Yes, a MoneyBack Policy. This is an anticipated endowment policy with an additional feature of
receiving a benefit at regular intervals during the tenure of the policy. The risk cover continues for
the entire sum assured inspite of the installments already paid. If you outlive the policy, the balance
sum assured along with accumulated bonus is paid back to you. For example, Kotak Money Back

This is suitable for you if
You plan to coincide the funds received from the policy with your future anticipated
needs like a car, an overseas holiday, children's educational needs, marriage expenses,

9. What are the different premium paying options available?
All policies provide yearly, half yearly and quarterly modes of premium payment.
In the Kotak Endowment Plan, you also have the option to pay the premiums only for a limited
period of time and not for the full policy term.

10. Can I buy insurance for my children too?
Yes, Kotak Life Insurance Kotak Child Advantage Plan, which can be used as an investment option
to build wealth for your child's anticipated financial needs like education or marriage or business
while covering his / her life.
11. What are riders?
Riders are additional benefits that can be attached onto your basic life insurance policy. These riders
give you the benefit of increasing your risk cover in case of certain events happening. For instance if
you have taken an Accident Death Benefit rider and you die due to an accident then your
beneficiaries can get upto a maximum of twice the basic sum assured.
Similarly there are different riders addressing different contingencies like Critical Illness, Permanent
Disability Benefit, etc. There are riders available that waive your future premiums in case of death or
disability of the proposer.
These riders come at a nominal cost. and can be availed of depending on the policy taken. These can
only be taken at the beginning of the policy term.
Riders offered by Kotak Life Insurance are Accidental Death Benefit, Permanent Disability Benefit,
Critical Illness Benefit, Term Benefit, Kotak Preferred Term Benefit, Kotak Life Guardian
Benefit,and Kotak Accidental Disability Guardian Benefit.

12. What will happen to my policy if I miss a premium payment due date?
Kotak Life Insurance offers a grace period of 30 days after the premium payment due date for paying
the outstanding premium. If you fail to pay the premium on your policy within this grace period your
policy will lapse. You can revive your lapsed policy by paying your outstanding premium and 6%
handling charges. This facility is available for six months. However, you can still revive the policy
within 5 years from the date of issue of policy. But if you are applying for revival of your policy in
this period, then shall entail submission of proof of good health and your premiums will be

However, if your policy has been in force (in existence with all premiums paid on time) for three
years and after that you fail to pay the premium, then your policy will get serviced out of your
balance in your Accumulation Account. Every year the amount in this Accumulation Account will be
used to covering your life (mortality charges and other expenses) will be deducted from your
accumulated fund. This will continue till this fund has sufficient balance after which your policy will
be terminated.

13. What will I receive on maturity of my policy?
On maturity, you will receive the sum assured or the Accumulation Account whichever is higher.
Lets understand how does this work.
Every year you will pay premium on your policy.
This premium will get credited to an Accumulation Account.
The amount required towards your life cover expenses and any other expense would
be deducted from this Account.
The balance will be invested in sound financial securities (as per IRDA regulations)
on your behalf.
The bonuses declared each year by the company would be added to the Accumulation
Account. Thus, every year the value in your Accumulation Account will get
At the end of the policy tenure, you would receive the amount in the Accumulation
Account or the sum assured, whichever is higher.

14. Are there any advantages in buying insurance at an early age?
Yes. The premium that you pay on your insurance policy is mainly dependant upon two things - your
age and the tenure of the policy. The younger you are, the lower is your insurance premium amount.
At younger age, you would be physically sound and may not be suffering from illnesses/ medical.
This would entitle you to a lower premium on the policy. Therefore it is advisable to buy insurance at
an early age to reduce the cost of insurance.

15. Is there any policy where I have the flexibility of making lump sum injections as and when I
have or need liquidity?
Yes. The Kotak Capital Multiplier Plan gives you this option. This is a plan that creates wealth and at
the same time multiplies your capital and retains your money for a time when you need it the most as
and when you want it.

16. Is there any policy with which I can plan for my retirement?
Yes. KotakRetirement Income Plan. This is a pension plan, which helps you to regularly invest your
savings during your earning life in order to build up a retirement corpus to take care of your post
retirement needs. Further you may be eligible for a tax deduction on the premiums paid up to Rs
10,000 (as per current tax provisions) per financial year under section 80CCC of the Income tax Act.
On retirement you can withdraw upto one-third of the Accumulated Account, which is tax-free and
for the balance amount, you can buy an annuity.

17. Is there any option where I can restrict my premium payment for a lesser number of years
than the duration of the policy?
Yes. With the Kotak Endowment Plan, there is a Limited Premium Payment (LPP) option. Under
this option you can take a policy for 10 to 30 years and opt for paying premiums for 3, 5, 7, 10 or 15
years after which premium payment ceases but the cover continues for the entire tenure of the policy.
This option is suitable for people who are sure of secured income only for a specified period of their
earning life during which they want to pay off all their premiums.

ULIP - Staying Insured While Investing

Unit-linked insurance plans (ULIPs) give you access to both insurance and investment. These plans
allow you to enjoy a life cover as well as the opportunity to earn market-linked returns.

The first ULIP was launched in India in 1971 by Unit Trust of India (UTI).With the Government of
India opening up the insurance sector to foreign investors in 2001 and the subsequent issue of major
guidelines for ULIPs by the Insurance Regulatory and Development Authority (IRDA) in 2005,
several insurance companies forayed into the ULIP business leading to an over abundance of ULIP
schemes being launched to serve the investment needs of those looking to invest in an investment
cum insurance product.

A part of the premium you pay goes towards providing the insurance cover, while the balance, after
deducting the distribution and management charges, gets invested as per your choice.

The investment proportion of your premium gets invested into different fund options managed by
professional fund managers. These fund options, in turn, invest the premium amount in varying
proportions of various financial instruments like equities, debt and money market instruments
A Unit Link Insurance Plan is basically a combination of insurance as well as investment. A part of
the premium paid is utilized to provide insurance cover to the policy holder while the remaining
portion is invested in various equity and debt schemes. The money collected by the insurance
provider is utilized to form a pool of fund that is used to invest in various markets instruments (debt
and equity) in varying proportions just the way it is done for mutual funds. Policy holders have the
option of selecting the type of funds (debt or equity) or a mix of both based on their investment need
and appetite. Just the way it is for mutual funds, ULIP policy holders are also allotted units and each
unit has a net asset value (NAV) that is declared on a daily basis. The NAV is the value based on
which the net rate of returns on ULIPs are determined. The NAV varies from one ULIP to another
based on market conditions and the funds performance.

All these investment options carry different levels of risk and return potential. Generally higher the
risk, higher would be the return potential. While equities involve the highest investment risk, they
also tend to give higher returns over the long run.

You can decide how much amount you wish to allocate in the fund of your choice and also enjoy the
freedom to switch between the fund options any time.

Types of ULIP Funds Risk /
Cash Funds Low Cash, bank deposits and money market
Income, Fixed Interest
and Bond Funds
Medium Corporate bonds, government securities
and other fixed income instruments.
Balanced Funds Medium Equities and fixed interest instruments
Equity Funds High Invest largely in equities

With ULIPs, we can benefit from

ULIPs give you a range of investment options. You can choose to invest your money into
pure equity or debt funds or a combination of both, based on your preference and risk profile.

1. Systematic investments

ULIPs encourage investments in a disciplined manner. Investing regularly in small doses over
a period of time lets you gain from the benefit of rupee cost averaging, which evens out the
highs and lows of a fluctuating market.

Rupee Cost Averaging
Investor A Investor B
d (Rs.)
d (Rs.)
1 30 90,000 3,000 15,000 500
2 25 - - 15,000 600
3 28 - - 15,000 536
4 32 - - 15,000 469
5 33 - - 15,000 455
6 32 - - 15,000 469
At the end of 6
90,000 3,000 90,000 3,028

Investor B invests the same amount of Rs 90,000 through periodic investments of Rs 15,000
every month over a period of six months and purchases the same equity share at different
rates. At the end of the six-month period, while both the investors had invested the same
amount, Investor B has been able to purchase more units.

In this way, rupee cost averaging could help you lower the average purchase costs and make
the most of price fluctuations depending upon the prevailing market conditions.

2. Transparency

You know how and where your money is invested and can even track your portfolio
performance. You are kept informed of all the applicable charges as well as your net
investment amount.

Changed for good
Recently, the Insurance Regulatory and Development Authority (IRDA) introduced sweeping
changes in the ULIP structure adding more value to it, resulting in improved benefits for the

Get more investible surplus

ULIPs come with a low charge structure, which implies that a greater portion of the premium
is invested to give you fruitful returns.

Get minimum guaranteed returns on pension products

Your life-time savings will now get enhanced protection from market fluctuations, as pension
ULIPs will now ensure a minimum guaranteed return on maturity.

Enjoy a higher risk cover

All ULIPs other than pension and annuity products will now provide a minimum life cover or
health cover, higher than what is being offered presently. For pension and annuity ULIPs,
life/health cover will be provided as riders. Thus, you can now enjoy higher cover to tide over
lifes uncertainties.

Enjoy a longer investment period

The new ULIPs have a lock-in period of 5 years. Besides, all ULIPs (excluding single
premium ULIPs) will now have a premium paying term of at least 5 years. This way you will
stay invested for a longer time frame. Investing small amounts at regular intervals over a
longer period would help you build a bigger corpus.

Even distribution of charges

Charges on ULIPS are evenly distributed during the lock-in period and you would be paying
equal amounts throughout the lock-in period.

3. Liquidity

Anytime after completion of 5 years of the policy, if you are faced with an emergency, you
can choose to surrender your policy without any additional costs or charges.

4. Provides flexibility in investments

ULIPs offer a complete selection of high, medium and low risk investment options under the
same policy. You can choose an appropriate policy according to your risk taking appetite,
coupled with the opportunity to switch between fund options without any additional expense
for specified number of switches. ULIPs provide the flexibility to choose the sum assured and
investment ratio in the annual targeted premium. It also offers the flexibility of one time
increase in investment portfolio, through top-ups to avail investment opportunity offered by
external environment or own income flows.

5. Disciplined and regular savings
ULIPs help you inculcate a regular saving habit. Also, the average unit costs tend to be lower
than one time investment.

6. Multiple benefits bundled in one product
ULIP is an outstanding solution for risk cover, long term investments with the benefit of
various investment opportunities, coupled with tax benefits.

7. Spread of risk
ULIPS are ideal for those investors who wish to avail the benefit of market linked growth
without actually participating in the stock market, with the added benefit of risk-cover.

ULIPs: Suitable for all

Unit-linked insurance plans (ULIPs) are long-term investment vehicles that provide you financial
protection while allowing wealth creation at market-linked returns. A part of your premium is
directed towards providing you with insurance and meeting administration expenses while the rest of
it is directed towards an investment fund.

Each ULIP offers several investment funds, each having a different risk and return profile. This is
because each fund comes with a different specified limit on the amount of debt and equity that it can
take an exposure to. You further have the freedom to switch from one fund to another during the
policy term. Due to these features, you can fulfil various financial goals through a ULIP.

Life Stage You are single
and have just
started on the
career path
You are
married with
no child
You are
married as
well as a
You are
settled at
your job and
have school
Your children
wish to pursue
education / set
up a business /
plan for their
Children are
and you are
- low
- medium
- high
- high
- medium
- low
creation and
- high
- high
- high
(need to
save for
- high (need
liquidity for
childs need)
Need lump
sum money to
fulfil needs
or retirement
the Needs
- Choose a low
death benefit
- Allocate
more to equity
- Opt for
higher death
- Choose
growth or
funds for
- Increase
- Opt for
fund for
- Choose
riders for
to meet
withdrawal to
fulfill arising
- Lower the
death benefit
- Opt for debt
oriented funds

ULIPs allow us to:

1. Protect your child's future

ith inflation inching up, a financial goal coming up for fulfillment tomorrow will cost you much
more than today. You thus need to invest in such a manner that the returns not only counter inflation
but also cover rising costs. With the equity exposure available, unit linked child plans give you the
opportunity to earn market-linked returns and at the same protect your child's future.
2. Secure funds for critical milestones

You may require funds at various milestones of your childs life such as his/her higher education,
marriage or business venture. The facility of partial withdrawals on offer gives you access to your
money at critical stages so that you have the right amount of money at the right time to address
multiple needs.

3. Financially secure your retirement

Creating a corpus for your retirement is one of the most important goals of financial planning. As
equities perform well over the long term, ULIPs are an ideal choice that can add value to your
retirement portfolio. When you are young and far away from retirement, you can choose an equity
oriented fund which invests largely in equities. As you grow old and near your retirement age, you
can gradually shift your investments in to more conservative debt funds. At retirement, you have the
option of choosing the annuity, either immediate or deferred, as per your requirements.

ULIPs and mutual funds

Barring theinsurance cover, ULIPs and mutual funds appear similar in structure. Both allow
fulfillment of various financial goals. However, a ULIP comes with attractive tax benefits wherein an
amount invested (up to a maximum limit of Rs 1 lakh) in a ULIP is not considered part of the taxable
income across all plans. A ULIP also offers you the flexibility to choose and alter investment
amounts and freedom to switch funds from one fund to another at zero or marginal cost. These few
features make them rather attractive.

ULIPs Mutual Funds

Investment Amounts

Determined by the investor and
can be modified as well
Minimum investment amounts
are determined by the fund

No upper limits, expenses
determined by the insurance
Upper limits for expenses
chargeable to investors have
been set by the regulators.
Portfolio Disclosure Not mandatory Quarterly disclosures are
Modifying Asset Allocation Generally permitted for free or
at a nominal cost
Entry/exit loads have to be
borne by the investor.
Tax Benefits Section 80C benefits are
available on all ULIP
Section 80C benefits are
available only on investment in
tax-saving funds.

ULIPs- A Consumer Perspective

ULIP is a hybrid, combining insurance with an investment in a mutual fund. As mentioned earlier, it
is closer to a mutual fund than a traditional insurance product.Except for a minor life insurance
component, the policyholder bears all the investmentrisks, just like in any mutual fund.
However, against this modest insurance benefit, the policyholder is charged by theinsurer under
several heads- allocation charges, bid-offer spread, administrative chargesand investment charges,
apart from the mortality charges for the insurance. These chargesare often deducted in complex
ways- some as a percentage of annual premium, some on afixed basis every month, some as
insurance charges on a monthly basis, some on a dailybasis as a percentage of fund value and so on.
In addition, these charges are subject torevision in future periods, with some restrictions. It is very
difficult for a buyer tounderstand the overall impact of these charges on the value of his account,
over severalyears. For example, a small increase in investment charges as a percentage of fund
valuecan have a substantial impact towards later policy years when fund values are likely to
behigher. In addition, to recover their high initial acquisition expenses, ULIPs usually levysurrender
penalties in the first few years if the policyholder wants to surrender his policy.
Realizing this, the Insurance Regulatory and Development Authority of India (IRDA)requires all
life insurance companies operating in India to provide officialillustrations to their customers. These
illustrations are based on the investment rates ofreturn set by the Life Insurance Council (constituted
under Section 64C (a) of theInsurance Act 1938). For the Year 2004-05, the two rates of investment
return declaredby the Life Insurance Council are 6% and 10% per annum.
The insurers thus have to give illustrated fund values and surrender values at the end ofeach policy
year. These illustrations have to be given at two different assumed rates ofannual returns of 6% and
10% of fund value, irrespective of the nature of the unit fundinvolved.
There is no reason to believe that an insurer can earn a consistently higher return on thefunds under
ULIP compared to a plain mutual fund of the same type (same risk profile).However, the expenses
incurred by an insurer under ULIP and hence the charges leviedon the policyholder may be higher or
lower compared to that of mutual funds in the samecategory. It is more likely to be higher as
marketing expenses for an insurer are typicallyhigher.

This gives us a simple but effective method of comparing the following two options for a
Potential buyer of ULIP:-
1. Purchase of a ULIP with a given level annual premium and sum assured for agiven term of
2. Purchase of the cheapest term insurance available in the market for the same sumassured and same
term; and investing the balance of the annual premium payableunder ULIP in a mutual fund of
identical style.

There are primarily two types of benefits to be compared:
1. What is the total financial benefit if the policy holder were to die sometime duringthe term? (Death
2. What is the total financial benefit if the policyholder were to terminate his policyeither before
maturity or on maturity? (Survival Benefit)
For ULIPs, we can directly use the illustrated surrender values and maturity values fromthe insurers,
for the assumed gross returns of 6% or 10%. However, the realizable valuesfrom the mutual fund for
the same assumed gross returns will depend on the chargeslevied by the mutual fund. Since there are
hundreds of mutual funds to be considered, wetook an alternative route: what should be the
equivalent annual charge of a mutual fund(as a percentage of fund values) for the realization on
maturity to be identical to theillustrated value under ULIP? We can then compare this equivalent
charge with thegeneral level of charges by the mutual funds of a given style to asses which
accumulationis likely to be more.
For death benefit, we can directly compare the death benefit from ULIP with the deathbenefit from
term insurance plus the fund value under the mutual fund net of equivalentmutual fund charges as
above. If the actual charges by mutual funds are lower, the optionof term insurance plus mutual fund
will be that much better.

Difference between the Traditional Insurance Plans & ULIP's:-


1. No flexibility to adjust your protection level
with your changing life styles.
2. Control over the investment is restricted and
returns are also limited and assured.
3. No flexibility to change your protection and
investment levels.
4. Value of your investment depends upon
bonuses declared by the company.
5. You cant change your life cover over the
period of your life style.
6. Premium payment term is limited, so you
have to pay the premium for a desired period.
7. Cant increase your contribution, if you have
extra money.
8. All traditional plans have the surrender value
and after three years the minimum guaranteed
surrender value is 35% of the premium paid
excluding the first year premium and
supplementary premium paid. Thus if in a
circumstance the policyholder has to surrender
it will have a huge loss.
9. All traditional plans have high first year
charges. These are usually in the tune of 60% or
70% and in some cases even higher. Thus it
takes longer for the money to grow in a
traditional plan.
10. Traditional insurance plans do not provide
control on investment. Money is invested as per
rules and laws laid down. The investment is not
transparent and the policy holder has no options
to monitor the investments

1.Total flexibility and control on your policy to
choose the desired level of protection as per
your life style.
2.Total control over your investment with the
choice of investments.
3.Flexibility to change your protection and
investment levels.
4.You can create own value and in long run this
turns out to be cost effective.
5.You can change your life cover at different
life stages.
6.Avail of the premium holiday feature to stop
paying the premium and your policy still
7.Flexibility to increase your savings anytime
with help of top-ups.
8.Lifetime has no surrender value and after 3
years if the policyholder wants to exit from the
plan- the exit can happen at market price which
is complete and depends upon thetime value of
the units.
9.Lifetime has a lower cost of investment. The
20% first year charges is the lowest asset
acquisition cost amongst all insurance plans.
This makes Lifetime a value for money plan as
more money goes towards investment from the
10.Lifetime gives control to the policy holder
over the investments. The policy holder decides
where, when and how is your money be
invested. There are three funds that enable the
policyholder to invest as per the return desired
and can build a personal risk- return profile.

It is critical for an investor to understand how his money gets invested once he purchases a ULIP.
When he decides the amount of premium to be paid and the amount of life cover he wants from the
ULIP, the insurer deducts some portion of the ULIP premium upfront. This portion is known as the
premium allocation charge, and varies from product to product. The rest of the premium is invested
in the fund or mixture of funds chosen by him. Mortality charges and ULIP administration charges
are thereafter deducted on a periodic (mostly monthly) basis by cancellation of units, whereas the
ULIPs fund management charges are adjusted from net asset value (NAV) on the daily basis.
The pie-chart below illustrates the spilt of ulip premium:

Unit Values as on July 8, 2014 -
Scheme Name Unit Price
Kotak Advantage Multiplier Fund
Kotak Advantage Plus Fund II
Kotak Guaranteed Growth
Kotak Advantage Multiplier Fund II

Kotak Guaranteed Balanced
Kotak Aggressive Growth
Kotak Opportunities Fund
Kotak Dynamic Growth
Kotak Dynamic Floor Fund
Kotak Dynamic Balanced
Kotak Dynamic Bond
Kotak Dynamic Floating Rate
Kotak Dynamic Gilt
Kotak Pension Balanced
Kotak Pension Bond
Kotak Pension Floating Rate
Kotak Pension Gilt 20.8807
Kotak Pension Growth
Kotak Pension Opportunities Fund
Kotak Pension Floor Fund
Kotak Group Balanced
Kotak Group Floating Rate
Kotak Group Bond
Kotak Group Gilt
Kotak Group Money Market
Kotak Group Dynamic Floor Fund
Classic Opportunities Fund
Dynamic Floor Fund II
Frontline Equity Fund
Balanced Fund
Pension Guarantee Fund
Pension Money Market Fund II
Money Market Fund
Pension Classic Opportunities Fund
Pension Floor Fund II
Pension Frontline Equity Fund
Pension Balanced Fund II
Guarantee Fund
Peak Guarantee Fund I
Discontinued Policy Fund
Kotak Group Secure Capital Fund
Kotak Group 57M FMP 07/04/2016

Unit Linked Insurance Polices (ULIPS)
Frequently Asked Questions (FAQs)
Unit linked guidelines were notified by IRDA on 21
December 2005. The main intent of the
guidelines was to ensure that they lead to greater transparency and understanding of these products
among the insured, especially since the investment risk is borne by the policyholder. It is the
endeavor of IRDA to enable the buyer to make the most informed decision possible when planning
for financial security. We hope the following FAQs will enable a better insight to all buyers about
the character and features of Unit linked Products.
1. What is a ULIP?
ULIP is an abbreviation for Unit Linked Insurance Policy. A ULIP is a life insurance policy which
provides a combination of risk cover and investment. The dynamics of the capital market have a
direct bearing on the performance of the ULIPs. REMEMBER THAT IN A UNIT LINKED
2. What is a Unit Fund?
The allocated (invested) portions of the premiums after deducting for all the charges and premium
for risk cover under all policies in a particular fund as chosen by the policy holders are pooled
together to form a Unit fund.
3. What is a Unit?
It is a component of the Fund in a Unit Linked Policy.
4. What Types of Funds do ULIP Offer?
Most insurers offer a wide range of funds to suit ones investment objectives, risk profile and time
horizons. Different funds have different risk profiles. The potential for returns also varies from fund
to fund.

The following are some of
the common types of funds
available along with an
Nature of Investments Risk Category
indication of their risk
characteristics. General
Equity Funds Primarily invested in company
stocks with the general aim of
capital appreciation
Medium to High
Income, Fixed Interest
and Bond Funds
Invested in corporate bonds,
government securities and other
fixed income instruments
Cash Funds Sometimes known as Money
Market Funds invested in
cash, bank deposits and money
market instruments
Balanced Funds Combining equity investment
with fixed interest instruments

5. Are Investment Returns Guaranteed in a ULIP?
Investment returns from ULIP may not be guaranteed. In unit linked products/policies, the
investment risk in investment portfolio is borne by the policy holder.Depending upon the
performance of the unit linked fund(s) chosen; the policy holder may achieve gains or losses on
his/her investments. It should also be noted that the past returns of a fund are not necessarily
indicative of the future performance of the fund.
6. What are the Charges, fees and deductions in a ULIP?
ULIPs offered by different insurers have varying charge structures. Broadly, the different types of
fees and charges are given below. However it may be noted that insurers have the right to revise fees
and charges over a period of time.
6.1 Premium Allocation Charge
This is a percentage of the premium appropriated towards charges before allocating the units under
the policy. This charge normally includes initial and renewal expenses apart from commission
6.2 Mortality Charges
These are charges to provide for the cost of insurance coverage under the plan. Mortality charges
depend on number of factors such as age, amount of coverage, state of health etc
6.3 Fund Management Fees
These are fees levied for management of the fund(s) and are deducted before arriving at the Net
Asset Value (NAV).
6.4 Policy/ Administration Charges
These are the fees for administration of the plan and levied by cancellation of units. This could be
flat throughout the policy term or vary at a pre-determined rate.
6.5 Surrender Charges
A surrender charge may be deducted for premature partial or full encashment of units wherever
applicable, as mentioned in the policy conditions.
6.6 Fund Switching Charge
Generally a limited number of fund switches may be allowed each year without charge, with
subsequent switches, subject to a charge.
6.7 Service Tax Deductions
Before allotment of the units the applicable service tax is deducted from the risk portion of the
Investors may note, that the portion of the premium after deducting for all charges and
premium for risk cover is utilized for purchasing units
7. What should one verify before signing the proposal?
One has to verify the approved sales brochure for
all the charges deductible under the policy
payment on premature surrender
features and benefits
limitations and exclusions
lapsation and its consequences
other disclosures

8. How much of the premium is used to purchase units?
The full amount of premium paid is not allocated to purchase units. Insurers allot units on the portion
of the premium remaining after providing for various charges, fees and deductions. However
thequantum of premium used to purchase units varies from product to product.
The total monetary value of the units allocated is invariably less than the amount of premium paid
because the charges are first deducted from the premium collected and the remaining amount is used
for allocating units.
9. Can one seek refund of premiums if not satisfied with the policy, after purchasing it?
The policyholder can seek refund of premiums if he disagrees with the terms and conditions of the
policy, within 15 days of receipt of the policy document (Free Look period). The policyholder shall
be refunded the fund value including charges levied through cancellation of units subject to
deduction of expenses towards medical examination, stamp duty and proportionate risk premium for
the period of cover.

10. What is Net Asset Value (NAV)?
NAV is the value of each unit of the fund on a given day. The NAV of each fund is displayed on
the website of the respective insurers.

11. What is the benefit payable in the event of risk occurring during the term of the policy?
The Sum Assured and/or value of the fund units is normally payable to the beneficiaries in the event
of risk to the life assured during the term as per the policy conditions.

12. What is the benefit payable on the maturity of the policy?
The value of the fund units with bonuses, if any is payable on maturity of the policy.

13. Is it possible to invest additional contribution above the regular premium?
Yes, one can invest additional contribution over and above the regular premiums as per their choice
subject to the feature being available in the product. This facility is known as TOP UP facility.

14. Whether one can switch the investment fund after taking a ULIP policy?
Yes. SWITCH option provides for shifting the investments in a policy from one fund to another
provided the feature is available in the product. While a specified number of switches are generally
effected free of cost, a fee is charged for switches made beyond the specified number.

15. Can a partial encashment/withdrawal be made?
Yes, Products may have the Partial Withdrawal option which facilitates withdrawal of a portion
of the investment in the policy. This is done through cancellation of a part of units.
16. What happens if payment of premiums is discontinued?
a) Discontinuance within three years of commencement If all the premiums have not been paid
for at least three consecutive years from inception, the insurance cover shall cease immediately.
Insurers may give an opportunity for revival within the period allowed; if the policy is not revived
within that period, surrender value shall be paid at the end of third policy anniversary or at the end of
the period allowed for revival, whichever is later.
b) Discontinuance after three years of commencement -- At the end of the period allowed for
revival, the contract shall be terminated by paying the surrender value. The insurer may offer to
continue the insurance cover, if so opted for by the policy holder, levying appropriate charges until
the fund value is not less than one full years premium. When the fund value reaches an amount
equivalent to one full years premium, the contract shall be terminated by paying the fund value.

17. What information related to investments is provided by the Insurer to the policyholder?
The Insurers are obliged to send an annual report, covering the fund performance during previous
financial year in relation to the economic scenario, market developments etc. which should include
fund performance analysis, investment portfolio of the fund, investment strategies and risk control
measures adopted.


Research is an art of scientific investigation through search for new facts in any branch of
knowledge. It is a moment from known to unknown. Research always starts with a question or a

Its purpose is to find answers to questions through the application of the scientific method.

It is a systematic and intensive study directed towards a more complete knowledge of the subject

As marketing does not address itself to basic or fundamental question, it does not qualify as basic
research. On the contrary, it tackles problems, which seem to have immediate commercial potential.

In view of the major consideration, marketing research should be regarded as applied research. We
may also say that marketing research is of both types problem solving and problem oriented.

Marketing research is as systematic and objectives study of the problems pertaining to the marketing
of the goods and services. It may be emphasized that it is not restricted to any particular area of
marketing, but is applied to all the phases and aspects.


To determine the present brand position of the Kotak Mahindra life insurance.
To study the customer satisfaction level of KotakMahindra Life Insurance;

The main objective of the project was to analyze consumer satisfaction of Kotak Mahindra
Life Insurance with other services in Lucknow. And also present position of the company.
To determine the market share of different brands:-
The second objective of the project was to determine the market share of different brands
available in the market. There was a tough competition for the brand in the market. Therefore
to get establish, company had to make its competitors analysis and need to determine where
do they stand.

Responses of customer:

Responses from them were collected through survey and for the Questionnaire were prepared
for both of them.

To find the market share of Kotak Mahindra Life Insurance.

To know competitor strength and weakness.

To showcase the consumers willingness to spend on life insurance.


1) Data to be collected.

Data includes facts and figures, which are required to be collected to achiever the objectives of the
project. In order to determine the present position and satisfaction of customer of kotak Mahindra
Life Insurance.

a) Primary Data

The data that is being collected for the first time or to particularly fulfill the objectives of the project
is known as primary data.

These types of data were,
- The market share of Kotak Mahindra Life Insurance.

- The market share of other brands available in the market.

- Responses of consumer.

- Identifying pros and cons of the brand.

The above primary data were collected through responses of consumer was
conducted through questionnaires prepared for them.

b) Secondary Data

Secondary data are that type of data, which are already assembled and need
not to collected from outside. These types of data were

i) Company Profile

ii) Product Profile

iii) Competitors Profile

The aforesaid data were collected through Internet and company s financialreport.
2) Data Collection Method

For given project, the primary data, this needed to collect for the firsttime, were much significant.
This type of information gathered through Survey technique, which is the most popular and effective
technique forCorrect data collection.
The survey was completed with the use of questionnaires

3) Sampling

Sample is the small group taken under consideration from the total group. This small group
represents the total group. In the project the market research, which was ask to be studied was
Lucknowmarket but as it was possible to approach all the respondent s customer of the city, hence a
sample was selected which represents the whole city. The areas selected for the sample
are present further in the appendix. Sample size of customer list was taken from Kotak Mahindra
Life Insurance customer data basic.

4) Universe

Population of Lucknow.

5) Sample Design
Sampling refers to the method of selecting a sample from a given universe with a view to draw
conclusions about that universe. A sample is a representative of the universe selected for study.
Convenience sampling is used in exploratory research where the researcher is interested in getting an
inexpensive approximation of the truth. As the name implies, the sample is selected because they are
convenient. This non probability method is often used during preliminary research efforts to get a
gross estimate of the results, without incurring the cost or time required to select a random sample

6)Sample Size
The sample size for the survey conducted was 50 respondents.
7) Sample Technique
Convenience sampling technique was used in the survey conducted.
Simple random sampling- In this each unit of population has equal chance of being included in the

1. Are you aware of Life Insurance?
Yes. No.
2. Do you think Insurance is important?
Yes. No.
3. Which company do you prefer?
Public. Private.
4. Do you own any Life Insurance Plan?
If yes then which co. __________
5. Do you think Insurance is also important for Housewives?
Yes. No.
6. What are problems with insurance?
High premium. Bad P.R.
Claim settlement. Terms & Conditions.
7. Are you aware Of Kotak Life Insurance?
Yes. No.
8. Which of its plan makes you Insured?
Kotak Flexi Plan. Kotak Retirement Plan.
Kotak Endowment Plan. Kotak Capital Multiplier Plan.
Child Advantage Plan.
9. How will you rate the service given by Kotak Mahindra Life Insurance?
Poor. Average.
Good. Excellent.
10. In future, will you purchase policies from Kotak Mahindra Life Insurance?
Yes. No.
11. What difference you find between Kotak and your previous insurance provider?
Security Good Return. Good Return.
Effective Service / liquidity. Tax Planning.
12. Are you aware of Ulip Policies?
Yes. NO.


From the above project report on ULIPs: Suitable for all. I conclude that the products offered by
Kotak Mahindra to its customers are enough to satisfy their needs but, they are not aware of the
company and its product in the market. Kotak Mahindra should advertise them internationally so that
the customer will be aware of such company. This will be helpful for the company to compete with
other insurance companies.
The detail given in this project report is true to the best of my knowledge & the information made to
me during my project tenure.