Kotak Lifetime Income Plan

To enjoy the retirement years it is important that the period is secured financially and to fulfil the same Kotak Life Insurance has introduced Kotak Lifetime Income Plan.

What is Kotak Lifetime Income Plan?

The Kotak Lifetime Income Plan is the non-liked and a non-participating immediate annuity plan, which assures regular stream of income lifelong.

On the premise of onetime premium paid to the Kotak Life Insurance regular income will be received by the annuitant throughout life. The Kotak Lifetime Income Plan essentially comes up with the choice of 6 annuity options and the frequency on, which the income flow would be needed. The Kotak Lifetime Income Plan will be offered to both individual customers and the Members of the Superannuation Fund.

Benefits of Kotak Lifetime Income Plan

The following are the key benefits of Kotak Lifetime Income Plan:

• Preferred Rates: This is offered to the existing members of the pension plan or the KLI policyholder who are essentially utilizing the proceeds of the plan for the annuity.
• High Purchase Price Discount: The rates of the annuity will differ by the purchase price band. The table below shows the buying price bands:

• Additional Annuity: Any annuitant who has accessed an immediate annuity can also make an extra annuity buy simply to increase the annuity payout. In this case, the annuity rate will be modified. This will be as per the age as upon the date of issuance of the additional annuity and band of buying price after combining the initial purchase price along with an extra purchase price that excludes services and good tax or any statutory levies. The annuity frequency and option is chosen at the beginning and will remain the same and not altered later. The purchase price for an additional annuity will be as per the existing terms and conditions. All the annuity options are accessible within this feature apart for lifetime income with the term guarantee.
• Tax Benefit: You can easily avail the tax benefits within Section 80CCC subject to the conditions as specified in the sections. The payment of annuities and the death benefit will be subject to the taxes as per the existing tax laws on the payment date and as per the legal heir/ annuitant’s taxable slabs of income.

Note: The tax laws are subject to change as per the existing laws.

Eligibility Criteria of Kotak Lifetime Income Plan

Note: The new customers are those customers who intend to buy the separate annuity plan and not use the proceeds of any Kotak Life Pension Plans or the Superannuation funds.

Advantages of Kotak Lifetime Income Plan

Primarily, let us take a look at the following advantages of Kotak Lifetime Income Plan:

• Higher annuity rates are for the higher purchase price.
• Have six annuity options to make a choice.
• The annuity rates issued are for a lifetime.

Who Can Buy Kotak Lifetime Income Plan?

The Kotak Lifetime Income Plan can be opted by both the customers and the members of the superannuation fund that includes the following:

• The existing Kotak Lifetime Income pension plan policyholders that the members of the KLI managed superannuation funds and who utilize the proceeds of this plan.
• The new customers or the members of superannuation funds that are managed by various insurers or organization who intends to buy the annuity from the KLI and includes customers, transferring the UK tax-relieved resources via QROPS.

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How Does the Kotak Lifetime Income Plan Function?

Further, let us understand the working of Kotak Lifetime Income Plan below:

• The annuity rates will be set on the premise of the following:
• The age of annuitants
• Single-premium sum
• Chosen annuity option
• Choice of frequency payout (Monthly, Half-yearly, quarterly and yearly)
• Subject to the terms and conditions the policies will be issued and the annuity rates will be applicable on the date of issuance.
• Post the issuance of the initial annuity instalment will be paid one/ three/ six months or one year right after the issuance date on the premise of the frequencies respectively.
• The issued rates of the annuity will be guaranteed for the complete life of the annuitant and not change with the varying conditions of the market.

Income Options Available with the Kotak Lifetime Income Plan?

On the premise of the needs the Kotak Lifetime Income Plan comes up with six annuity options that you can easily choose from listed below:

• Lifetime Income: Under this option, the annuity payment will be mostly made throughout the life of the annuitant and will cease only upon the annuitant demise.
• Lifetime Income with the Cashback: The annuity payout will be made throughout the life of the annuitant and on the demise of the annuitant, the complete premium that excludes the services and good tax and any statutory levies in case of any will be paid for buying the plan and will be then paid to the nominee back.
• Lifetime Income with the Income Term Guarantee: The annuity payout will be made for a guaranteed term of 5/ 10/ 15 or 20 years as chosen by the annuitant regardless of the annuitant survival. If the annuitant survives the opted guaranteed term then the payout will continue throughout the life and upon demise, the annuity payout will be ceased. Upon the demise of the annuitant within the guaranteed period, the annuity payout will continue to the nominee until the guaranteed term expires.
• Last Survivor Lifetime Income With 100 per cent Annuity to a Surviving Spouse: The annuity payout will be done throughout the life of the primary annuitant and on demise 100 per cent of the beginning annuity payout will be done throughout the life of a surviving spouse or a secondary annuitant. In case a secondary annuitant predeceases a primary annuitant, 100 per cent of the annuity payout will continue for the primary annuitant.
• Last Survivor Lifetime Income With 50 per cent Annuity to a Surviving Spouse: The annuity payout will be done throughout the life of the primary annuitant and on demise 50 per cent of the first annuity payout will be done throughout the life of the spouse surviving or a secondary annuitant. In case a secondary annuitant predeceases a primary annuitant, 100 per cent of the annuity payout will continue for the primary annuitant.
• Last Survivor Lifetime Income With 100 per cent Annuity to a Surviving Spouse and Cashback upon Demise of Surviving Spouse: The annuity payout will be done throughout the life of the primary annuitant and on demise 100 per cent of the first annuity payout will be done throughout the life of a surviving spouse or a secondary annuitant. In case a secondary annuitant predeceases a primary annuitant, the annuity payments will continue for the primary four annuitants. On the demise of the surviving annuitant, the complete premium that excludes the services and good tax or any statutory levies paid for buying the plan will be then paid to the nominee back.

Terms and Conditions

Let us take a brief understanding of the key terms and conditions of Kotak Lifetime Income Plan:

• Annuitant: An annuitant is the recipient of the annuity or the policyholder. When it comes to the annuity options four, five and six then there are two annuitants and they will be spouses. The primary annuitant will be eligible to receive the payouts and the spouse is going to be the secondary annuitant in case the primary annuitant is no more.
• Annuity Rates: The annuity rates are going to apply to the policy conversion date and will be then provided to the customers. Once it is issued the rates are going to be guaranteed for life. At the time of purchase, please check for the latest and updated rates.
• Total Premium: In case the annuitants have opted for an additional annuity it would include the single premiums and the extra single premiums paid that excludes the services and goods tax or statutory levies.
• Evidence of Existence: Every fifteen days before the anniversary of the policy, the annuitant or the annuitant surviving will be required to submit valid evidence of existence in the company in a certain format or via any suitable mode that is accepted by the company. In case of the company does not receive the evidence within time, the payment of annuity will be ceased except in the case of lifetime income along with the term guarantee wherein annuity will continue to be paid until the guaranteed period ends. The annuity payment will resume upon receipt of the evidence and likewise, the arrears will then be settled.
• Nomination and Assignment: Nomination will be permitted with the plan as per Section 39 that is amended from time to time, for the annuity options of the lifetime income with term guarantee, lifetime income with cashback and last survivor lifetime income with 100 per cent annuity to a surviving spouse and cashback upon the demise of a spouse surviving. The assignment will be permitted in the plan as per Section 38 provisions that are amended from time to time.
• Free Look Period: The policyholder is given fifteen days free look period for the policy that is sold via all the channels except for the channel of distance marketing and has 30 days from the receipt date of the policy. The policyholder again returns the policy and provides reason within 15 days to a month after the receipt with any mentioned terms and conditions that they do not agree to of the plan. Anyone who does so will be entitled to the refund of the paid premium after the adjustment of stamp duty. In case the product is bought with proceeds of the pension plan from any other insurer the proceeds that are the applicable sum from the cancellation in free look period will be transferred to the same insurer back from where the amount was received. Besides, if the product is bought as QROPS via the transfer of the UK tax-relieved resources the proceeds from the cancellation in the free look period will be transferred back to fund house from where the sum was received. Once an annuity has been chosen, it cannot be changed post free look period.

Note: The free look period will not be accessible in case of any existing customers wherein it is mandatory to buy an annuity from the Kotak Life.

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