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Kotak Gratuity Plus Group Plan

The Kotak Gratuity Plus Group Plan by Kotak Mahindra Life Insurance is a unit linked group gratuity insurance plan that helps employers to provide gratuity benefits to their employees. The plan enables employees and members of various government as well as non-government establishments to take advantage of effective gratuity plan that provides life insurance coverage as well. The Kotak Gratuity Plus Group Plan allows the employers to enjoy the benefits of this policy through market-linked returns and long-term investment growth. The employer or establishment has the convenience of paying the premiums in monthly, quarterly, half-yearly, yearly, and periodical intervals. An employer is required to have ten or more employees in order to be eligible for this plan.

Eligibility - Who is the Kotak Gratuity Plus Group Plan for?

The Kotak Gratuity Plus Group Plan is a tool for the employers who wants to reduce their gratuity liability with a systematic investment plan. Considering the fact that this plan provides gratuity as well life insurance coverage for the employees, it helps the employers in adhering to statutory obligations as well. The life insurance coverage provides protection to the dependents of the employee’s family members through an assured amount. Under this plan, the policyholder or the employer creates a trust and appoints trustees for managing the gratuity trust. The contribution towards the plan helps the policyholder to meet the past service gratuity liability of the establishment. Additionally, this plan comes with no administration charges, however, in order to be eligible for this plan, the following eligibility factors are taken into consideration:

 Parameters Eligibility
Minimum entry age 18 years
Maximum entry age 74 years (based on the scheme rules)
Maturity age 75 years (based on the scheme rules)
Policy term 1 year (renewable on year basis)
Sum assured Rs.1,000
Group size Minimum of 10 employees (no maximum limit)

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

Sum Assured - The Kotak Gratuity Plus Group Plan provides a low sum assured amount to the employees which make it easy to enroll for the plan. On retirement/resignation of an employee up to the selected policy term, the units in the investment funds will be redeemed to pay the gratuity settlement as per the policy rules. The sum assured amount for each employee under the plan is Rs.1,000 under the life insurance coverage in case of unfortunate death of an insured employee. One of the key advantages of this plan is that it offer Capital Guarantee Return of all contributions made net of past benefit payments.

Premium – The premium or contribution is the amount paid by the master policyholder, employer or the establishment towards the Kotak Gratuity Plus Group Plan to reduce gratuity liability. Kotak Mahindra Life Insurance allows the master policyholder or the employer to pay the premium or to make the contribution in a broad range of payment modes and options. The policyholder is required to make the payments for all the premiums in monthly, quarterly, half yearly, yearly or as a lump sum at periodic intervals as agreed with Kotak Life Insurance. The premium amount or the contribution is decided by the policyholder/employer at the inception of the policy. An employer can buy the Kotak Gratuity Plus Group Plan for a minimum of Rs.2,00,000 (there is no limit on maximum contribution). The premium paid in the policies are subject to market investment risk associated with capital markets. The value of the units may go up or down based on the factors influencing the capital markets.

Plan Coverage - What the Kotak Gratuity Plus Group Plan covers?

The Kotak Gratuity Plus Group Plan provides the following coverage:

Gratuity benefit The gratuity benefit is payable to the employees as per the gratuity trust deed or the scheme rules decided by the employer or the policyholder.
Death benefit In case of unfortunate death of an insured employee, the total of the sum assured and the gratuity settlement will be paid out based on the trust or scheme rules.
Life insurance The plan also provides the benefit of a life insurance coverage for the employees. Under this plan, the employees are entitled to a life insurance coverage of Rs.1,000 that will be paid to the employee’s family in case of unfortunate death of an employee.
Regular additions The plan offers the regular addition of units that will be added to the plan at the beginning of the calendar month. The rate of these additions is in the range of 0.05% to 0.30% per annum.
Capital Guarantee Another key feature of this plan includes the return of all contributions made (Net of past benefit payments). The guarantee for every contribution will be provided only after one year from the date of the contribution made towards the plan.

Riders / Add-On Plans – Additional coverage under the Kotak Gratuity Plus Group Plan:

There are no riders or add-on plans offered under the Kotak Gratuity Plus Group Plan.

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

Partial withdrawal – The Kotak Gratuity Plus Group Plan doesn’t allow any partial withdrawals of the fund.

Loan – There is no loan facility available under this plan.

Other Key Features – Freelook Period, Surrender Values, Grace Period etc.

Freelook period If the policyholder is not agreeable to the terms and conditions of the policy, the policy can be returned within 15 days with the reason for return/cancellation. The return or cancellation request for the policy can be submitted to the nearest Kotak Life Insurance Branch or sent directly to the head office in Mumbai. Once the request has been submitted along with the necessary documents, Kotak Mahindra Life Insurance will arrange the refund of the non-allocated premium, charges levied for cancellation of units, along with the fund value at the date of cancellation less expenses. When a policy is returned or canceled, it cannot be activated again, hence the customer will need to buy a new policy.
Surrender values This policy can be terminated/surrendered by the policyholder by giving one-month prior notice to the insurer in writing. At the end of the notice period, the insurer will pay the surrender value after deduction of necessary charges. The following surrender charges are applicable:
  • If a policy has been subject to termination or surrender in the first three years of the policy term, a charge of 0.05% of the total fund value or Rs.5,00,000, whichever is lower will be applicable.
  • If the policy is surrendered after the first three policy year, there are no surrender charges applicable to the policy.
Once the policy is surrendered, the insurer will pay the higher of either the fund value for each contribution that has completed more than a year or the total sum of each contribution that has completed one complete year. The contributions that have not completed one year and yet to receive guarantee will also be payable to the policyholder.
Service Tax and Cess Depending on the latest tax rules, the service tax and cess will be applicable to the policy. In future, if the tax levied by the government changes, the policyholder will be responsible for paying the additional amount.

Tax Benefits – How you can save with the Kotak Gratuity Plus Group Plan?

The Kotak Gratuity Plus Group Plan provides tax benefits to both the policyholders/employers and the employees.

  • Tax benefits for employers/policyholders – The contributions to an approved gratuity fund allows tax deductions under section 36 (1)(v) of the Income Tax Act, 1961. The income earned through a gratuity plan is exempted from tax under Section 10(25)(iv) of the Income Tax Act, 1961.
  • Tax benefits for employees/members – The gratuity settlement benefit for employees will depend on the scheme rules. On resignation/retirement of a government employee, the gratuity settlement amount will be completely tax-free, however, in case of a non-government employee, the gratuity settlement amount will be exempted from tax for up to the limit of Rs.10 lakh. In case the insured employee encounters unfortunate death, the death benefits payable to the nominee is completely exempted from tax.

The tax benefits under this policy are subject to the latest Income Tax rules that are subject to change from time to time. If the tax levied by the government increases in the future within the policy term, the insurer will recover the additional tax from the policyholder. Customers are advised to consult with a qualified tax consultant before making any investment plan. A tax consultant can help you understand the gratuity and tax benefits based on the current tax rules.

Other Benefits – How you can save with the Kotak Gratuity Plus Group Plan?

The Kotak Gratuity Plus Group Plan comes with a wide range of benefits for the policyholders and employees/members. In addition to tax benefits, the plan offers additional services and features that are useful for the policyholders and members. Few of the benefits are listed below:

Flexible premium payments – The plan allows the policyholders to make contributions based on their preferences. The customers can choose to make payments on a monthly, quarterly, half-yearly, or yearly basis. The customers also have the options to make a lump sum payment at periodic intervals as agreed with Kotak Life Insurance. The contributions can be made through net-banking, NEFT, debit/credit card, ECS, cheque, payment at a branch, and through various other online and offline methods.

Policy notifications - Kotak Mahindra Life Insurance sends out notifications through text and email to keep the policyholders updated about the latest updates pertaining to the policy. The policyholders get notifications for the upcoming premium payments, policy renewals, etc.

Policy information – Whether it is an existing or a potential customer, Kotak Mahindra Life Insurance can be contacted through e-mail, toll-free number or through the company’s website to obtain necessary information regarding a policy.

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

Kotak Mahindra Old Mutual Life Insurance Ltd. is one of the most popular and reputed life insurance provided in India. Established in 2001, the insurer specializes in banking and insurance products and services with the experience that comes through the joint venture of the Kotak Mahindra Group and the banking and insurance firm Old Mutual plc. Kotak Life Insurance provides an extensive range of plans for wealth creation, family, health, retirement, and other needs. The insurer is one among the few to have one of the highest claim settlement ratios in the market which is achieved through quality products and excellent customer services. When it comes to insurance and investment plans, Kotak Life Insurance is one of the most sought after companies in India.

The Kotak Gratuity Plus Group Plan is designed to reduce the gratuity liability of a firm through systematic investment plan. The plan can help a firm in managing the fund resources effectively through market-linked returns and long-term investment growth. Moreover, the life insurance coverage will also help an employer in ensuring that the dependent of an employee is protected through an assured amount in case of death of the employee. Overall, the plan offers a host of benefits for both the employers and the employees through an effective gratuity plan.

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