Kotak Gratuity Group Plan

Kotak Gratuity Group Plan is a unit-linked gratuity group plan offered by Kotak Life Insurance. Employers can invest their gratuity funds in this plan to reduce business costs and earn the funds needed to pay gratuity to their employees and finance their core businesses. Under this plan, you get the following benefits:

• Market performance based returns
• Long-term investment growth
• Additional units added for higher fund sizes
• Choose from 6 fund options based on your risk appetite and investment needs
• Life Cover for employees
• Tax benefits for both employer and employee under Section 36 (1)(v), Section 10(25)(iv), and Section 10(10) of the Income Tax Act, 1961

In this plan, investment risk in the investment portfolio is borne by the policyholder.

Eligibility - Who is the Kotak Gratuity Group Plan for?

Listed below are the eligibility factors you must meet to purchase Kotak Gratuity Group Plan:

Entry Age	18 to 75 years
Maturity Age	Up to 76 years
Group size	Minimum: 10 employees Maximum: No limit

Sum Assured and Premium Range - What you get and what it costs?

The contribution/premium amount, Policy Term and Sum Assured for Kotak Gratuity Group Plan are as follows:

Premium/contribution	Minimum: Rs.2 lakhs at policy inception Maximum: No limit
Policy Term	1 year (renewable yearly)
Sum Assured	Minimum: Rs.5,000 Maximum: Subject to the underwriting policy of the insurer
Premium/contribution payment frequency	Yearly, half-yearly, quarterly or monthly

*Premiums vary based on age, location, plan term and other factors.

Plan Coverage – What the Kotak Gratuity Group Plan covers?

This is how Kotak Gratuity Group Plan works:

The master policyholder will create a gratuity trust, make contributions to the trust, and appoint trustees to maintain the trust. He or she can choose from 6 investment fund options offered by the company. Units will be allocated after the contributions are made. Upon retirement or resignation during the policy term, the company will redeem the units to pay gratuity benefit.

• Employer Benefits:
  • Regular additional units will be added to the schemes if the total fund value is above Rs.1 crore. The rate of addition is 0.10-0.65% p.a.
  • Surrender Benefit: The master policyholder can surrender or terminate the policy by giving 1 month advance notice in writing. At the end of the notice period, the Surrender Value which equals Fund Value on the date of surrender minus surrender charge will be paid. The surrender charge is not applicable if the policy is surrendered after completion of 3 policy years. The policy will cease once the surrender value is paid.
  • Switching: Master policyholder can make free unlimited switching between funds during the policy term.
  • Contribution redirection: Annual contributions can be redirected to any fund (initial investment pattern can be changed).
• Employee Benefits:
  • Gratuity benefit is payable upon member's survival.
  • Death Benefit: Upon demise of a life insured, Death Benefit (Sum Assured of up to Rs.5,000) and gratuity settlement are payable to his or her nominee.

• Investment options: Depending on your risk appetite and investment needs, you can choose from a choice of 6 funds to invest in. You also have the option to switch funds during the policy term for free and any number of times you want.

Investment Option	Objective	Risk-Return Profile	Equity	Government Guaranteed Securities	Other Debt securities	Short-term Investments
Group Balanced Fund	Moderate growth from a diverse combination of equities and fixed interest instruments	Moderate	30-60%	20-70%	20-70%	0-40%
Group Bond Fund	Return is from fixed interest instruments, may provide little protection against unexpected rise in inflation	Conservative	-	0-75%	25-100%	0-40%
Group Floating Rate Fund	Return is from floating rate debt instruments, may provide little protection against unexpected rise in inflation	Conservative	-	0-75%	25-100%	0-40%
Group Gilt Fund	Return is from government fixed interest securities, may provide little protection against unexpected rise in inflation	Conservative	-	80-100%	-	0-20%
Group Money Market Fund	Capital protection with minimal risk	Secure	-	-	-	100%
Group Short Term Bond Fund	Returns and liquidity from government debt and money market instruments	Conservative	-	0-50%	25-75%	10-75%

Exclusions – What the Kotak Gratuity Group Plan doesn’t cover?

Kotak Gratuity Group Plan does not pay death benefit in the case of suicidal death of life insured within 1 year of policy commencement. Only gratuity settlement is payable to the nominee of the life insured.

Other Key Features of Kotak Gratuity Group Plan:

Listed below are the key features of Kotak Gratuity Group Plan:

• Free Look Period: From the date of receipt of the policy document, you are given 15 days to review the terms and conditions of the policy. If you have any objection to the terms and conditions, you have the option to return the policy. The cancellation request has to be submitted to the Head Office or the nearest Kotak Life Insurance branch. You will receive refund of the contributions made after certain deductions. Policy once returned can’t be revived or reinstated. A new policy will have to be made.
• Charges: Following are the various charges applicable to Kotak Gratuity Group Plan:
  • Premium Allocation Charge: This charge is applicable as a percentage of the contributions made. Allocation charge is not applicable for policies purchased from direct sales (Kotak Life Insurance agents).

    Premium amount	Allocation charge
    Up to Rs.2 crores	0.5% of contribution
    Above Rs.2 crores	Nil

  • Fund Management Charge: This charge is applicable as a percentage of the value of assets.

    Fund Name	Charge
    Group Money Market Fund	0.80%
    Group Gilt Fund	0.80%
    Group Bond	0.80%
    Group Floating Rate Fund	0.80%
    Group Balanced Fund	1.00%
    Group Short Term Bond Fund	0.80%

  • Mortality Charge: This charge is levied based on the risk profile of the group. It will be deducted from the Fund.
  • Surrender Charge: This charges is applicable when a policy is surrendered within 3 years from the policy commencement date. Charge is applicable as a percentage of the Fund Value.

Surrender year	Charges
1 to 3 years	0.5% of Fund Value or Rs.5 lakhs, whichever is lower
4th year onwards	Nil

There is no policy administration charge, switching charge or redirection charge.

Tax Benefits of Kotak Gratuity Group Plan:

Under Kotak Gratuity Group Plan, employers get the following tax benefits:

• Tax deductions on contribution made to the gratuity fund under Section 36 (1)(v) of the Income Tax Act, 1961.
• Tax deductions on investment returns under Section 10(25)(iv) of the Income Tax Act, 1961.

Employees get the following tax benefits:

• For government employees, gratuity receipts at the time of retirement are 100% tax free.
• For non-government employees, gratuity receipts are tax free up to Rs.10 lakhs under Section 10(10) of the Income Tax Act, 1961.
• Tax-free death benefits.

Other Benefits of Kotak Gratuity Group Plan:

There are several other benefits of purchasing group insurance plans from Kotak Life Insurance such as:

• Fill up an online form on the company website to request a life advisor to help you choose the right insurance plan. The life advisor will contact you after the request is processed.
• Using the online premium calculator available on the company website, you can calculate how much premium you need to pay for a chosen policy.
• You can request for policy alerts from the company via SMS or email notifications.

Why should you buy Kotak Gratuity Group Plan from Kotak Life Insurance?

Following are the reasons why you should buy Kotak Gratuity Group Plan from Kotak Life Insurance:

• Kotak Life Insurance is one of the most popular insurance providers in India.
• The company serves millions of customers across the country.
• It boasts varied insurance products from group insurances to Unit Linked Insurance Plans and riders.