Skip to main content

Kotak Smart Advantage Plan

Insurer Promises A Guaranteed Return Of 275% Of The First Year Premium, But An FD Will Earn More In Similar Period




KOTAK Smart Advantage plan is a ULIP plan launched by Kotak Life Insurance. The unique selling points of the plan is the insurer promises a guaranteed return of up to 275% of the first year premium.

HOW DOES THE 275% RETURN WORK?    

As per the policy wordings, the first year's premium does not get allocated to your fund. Instead, it will contribute towards the fixed return, which you earn at maturity. This fixed return could be from 100% for premium payment term of less than 10 years to up to 275% for 30 years. The premium payment terms are 3, 5, 10, 15, 20, 25 or 30 years for this plan.
   The plan rewards customers with long-term commitment as shorter premium payment tenure would reduce your fixed return. Financially disciplined customers would be rewarded with this guarantee. If you miss out on the premium payments, the fixed return would be reduced proportionally as mentioned in the policy document.

IS THE RETURN GOOD ENOUGH?


   You easily earn more than 300% by investing this money in an FD for 30 years against 275% of the first year premium, which is the guaranteed element of this plan. The assumption here is the post-tax rate on a FD would be around 5-5.5%. The absolute return at maturity would be like any other ULIP plan, depending upon the performance of the fund. If you are planning to stay long in this ULIP, say up to 30 years, it could be a viable option.

DIFFERENT OPTIONS

This plan gives you an option to invest in three funds depending upon your risk appetite. The opportunities fund, which targets an aggressive investor, would have 75-100% exposure in equities/stocks. The dynamic floor fund, which targets cautious investors, would have 0-75% exposure in equities. The conservative investor can opt for a dynamic bond fund with 100% exposure in debt-related instruments.

PREMATURE WITHDRAWAL & SETTLEMENT


   The ULIPs allows partial withdrawal after the third year. If you withdraw more than 10% of the fund value, it affects your fixed return at maturity. Either at maturity or in case of the death of the policyholder, the plan gives the option of lump sum settlement or an equal instalment over a period of up to five years. The equal instalment option is a good one, especially if the market is bearish at the time of the policyholder's death.

CHARGE STRUCTURE

:
   The cost structure of this plan is comparable to any other ULIP. The fund management charges are between 1.2% and 2.0% of the fund value, depending on the type of the fund. The administrative charges work to Rs 780 per year. The mortality charges also differ depending upon the age of the policyholder. The surrender charges are applicable only if the policy gets surrendered within eight years. These charges fall in the range of 5-1%. The first four switches in a year are free. For every additional switch thereafter, Rs 500 will be charged.

ADDITIONAL BENEFITS AND FEATURES

Loyalty bonuses are provided every five years after the tenth year.

WHY INVEST:

The family gets an income stream for five years in case of a policy holder's death if they opt for equal instalment stream. This can be useful if the stock market has been bearish.

WHY NOT INVEST:

It's like another ULIP, which is subjected to vagaries of the stock market. Don't read too much into the guaranteed return.

 


Popular posts from this blog

JP Morgan India Equity Fund Online

Invest JP Morgan India Equity Fund Online     JPMorgan Mutual Fund   has announced dividend under the following schemes:   The record date has been fixed as March 17, 2016.   Scheme Dividend ( R /unit) JP Morgan India Equity-D 0.18 JP Morgan India Equity Direct-D 0.18                         ----------------------------------------------- Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing ELSS Mutual Funds Top 10 Tax Saving Mutual Funds to invest in India for 2016 Best 10 ELSS Mutual Funds in india for 2016 1. BNP Paribas Long Term Equity Fund 2. Axis Tax Saver Fund 3. Franklin India TaxShield 4. ICICI Prudential Long Term Equity Fund 5. IDFC Tax Advantage (ELSS) Fund 6. Birla Sun Life Tax Relief 96 7. DSP BlackRock Tax Saver Fund 8. Reliance Tax Saver (ELSS) Fund 9. Religare Tax Plan 10. Birla Sun Life Tax Plan Invest in Best Performing 2016 Tax Saver Mutual Funds Online Invest Online Download Application Forms For further informa...

Inflation Indexed National Savings Securities - Tax Treatment

Invest In Tax Saving Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Buy Gold Mutual Funds Call 0 94 8300 8300 (India)   Inflation Indexed Bond - Tax Treatment Tax treatment on interest and principal repayment would be as per the extant taxation provision. The quoting of Permanent Account Number (PAN) mandatory for investment amounting to `50,000 (Rupee fifty thousand) and more. However, following exemptions with regard to PAN requirement will apply: As per Income Tax Rule 114B, any person who does not have a PAN and who enters into any specified transaction shall make a declaration in Form No.60. As per Rule 114C, the requirement of PAN is not applicable to the person who has agriculture income and does not have any other income provided he makes a declaration in Form 61, non-residents as referred to in Section 2(30) of the Income Tax Act, and...

Change in Fund Manager for some of HSBC Mutual Fund Schemes

Buy Gold Mutual Funds Invest Mutual Funds Online Download Mutual Fund Application Forms Call 0 94 8300 8300 (India) However, this facility is only available to Unit holders who have been assigned a folio number by the AMC.   HSBC Mutual Fund has announced that the below mentioned schemes shall be managed by the new fund managers as stated in the table. The effective date will be July 02, 2012.   Amaresh Mishra 's will be Vice President and Assistant Fund Manager. Having done a Post graduate diploma in Business Management and Bachelor of Chemical Engineering, he has over seven years of experience in Equities and Sales.   Mr. Piyush Harlalka's designation shall be Vice President- Fixed Income. Qualified as a C.A., C.S. and holding M.B.A.( Finance degree), he has over six years of experience in Fund management and ...

DSP BlackRock MidCap Fund

Best SIP Funds Online   HOW HAS DSP BlackRock Small & Mid Cap Fund PERFORMED? With a 10-year return of 14.61%, the fund has outperformed both the category average (12.34%) and the benchmark (10%) by a good margin. Should you invest in DSP BlackRock Small & Mid Cap Fund? This fund invests predominantly in mid-cap stocks but takes a sizeable exposure in small-caps as well. The focus is on nascent companies with high growth potential. The fund manager places emphasis on quality and avoids inferior businesses even if these look tempting from a valuation perspective. Over the past year, the fund portfolio has grown, having added to some of the underperforming sectors like chemicals and healthcare. Its portfolio churn has come down significantly. The heavily diversified portfolio is run completely agnostic of its benchmark index— most bets are from outside the index—which can at times lead to bouts of underperformance as seen in the recent years....

Investing in Birla Sun Life Emerging Leaders Fund Series Online

  Buy Birla Sun Life Emerging Leaders Fund Series Online       Market volatility has opened doors to yet another opportunity for your customers. Here's your chance, once again, to ensure they capitalise on it! The current situation!   Earning trajectories of Small and Mid-cap stocks have shown an uptick across broader markets. (Source: MoSL).   A rise in disposable income has brought about a noticeable shift in the spending habits of the consumer. The pick-up in real urban wage growth has reported to be the fastest in 7 years (Source: RBI, Labour Bureau).   According to the 7 th Pay Commission, a staggering 24.8 million Government employees to be given a sizeable hike (Source: GoI, Spark Capital).     Birla Sun Life Emerging Leaders Fund - Series 7 (A Close ended Equity Scheme). With a tenure of 3.5 years and an aim to primarily invest in Small and Mid-cap stocks, it targets to identify the potential leaders of tomorrow.       Mutual Fund investments are subj...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now