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ULIP Review: Kotak Wealth Insurance Plan


Kotak Wealth Insurance is a Type II unit-linked insurance plan (Ulip) that provides triple benefits of sum assured, fund value and a lump sum equal to outstanding premiums as death benefit. The scheme is fairly flexible with different premium payment options as well as policy terms. The only downside to the scheme is its high cost structure. However, this gets well compensated with returns from equity funds.
   
Our View

Although the scheme appears a bit expensive, this gets offset by the benefits provided in it. There are a few other features like alteration in sum assured and riders that make the policy pliable. Over 80% of the fund is invested in A-category stocks. This indicates both safety and outperformance of equity funds over benchmark.

Unique Feature

The scheme provides an extended death cover by way of lump-sum benefit, which is equal to the outstanding premium. For instance, the policyholder dies in the seventh year of a 10-year-tenure policy. The nominee will get premium outstanding for three years along with basic sum assured and fund value.

For Existing Customers

Those already invested in it should remain invested as the scheme provides an adequate insurance. On the investment side, the plan is a little weak. Investors should raise their insurance to 25 times the annual premium and switch to balanced fund.

For Those Looking to Invest

Though the plan appears costly, its benefits are equally good. Investment funds, though, have not generated outstanding returns, they have performed well in the market.

 

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