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| Life Insurance> Group Insurance > Kotak Gratuity Group Plan |
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| "IN THIS POLICY, THE INVESTMENT RISK IN INVESTMENT PORTFOLIO IS BORNE BY THE POLICYHOLDER" |
| Overview |
| Gratuity is not just a statutory obligation but also a very important tool today to retain and attract talented employees. A comprehensive and effective gratuity plan can reduce your business cost and corporate tax. At Kotak Life Insurance, we understand this. We have therefore designed a gratuity management solution that not only manages your gratuity liability effectively but also helps you release resources for your core business activities. |
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Key Highlights of Kotak Gratuity Group Plan (KGGP) |
- Market-linked returns and long term investment growth (Unit-Linked Non-Participating Scheme)
- Choice of eight investment portfolios
- Switching facility amongst the available fund options
- An in-built life cover (equivalent to Future Service Gratuity subject to a min of Rs.1000) that insures your employees' lives and provides security to their families. Life cover is available 24 hours a day, 7 days a week.
- Critical Illness cover at half of accelerated additional death cover at a nominal cost
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| Who
can opt for KGGP? |
- Employer- employee groups that fall under the purview of Payment of Gratuity Act, 1972.
- Minimum entry age: 18 years
- Maximum cover age: Retirement age as specified in the Trust Rules of the employer or 75 years whichever is lower
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| How does KGGP help me as an employer? |
- Contribution to an approved gratuity fund is deductible under section 36(1) (v) of the Income Tax Act, 1961.
- Income earned from investments by an approved gratuity fund is tax-exempt under section 10(25) (iv) of the Income Tax Act, 1961.
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| How does KGGP help my employees? |
- The gratuity settlement for retirement/resignation/withdrawal (as the case may be) will be settled as per the Trust Rules. Gratuity receipts are tax-exempt in the hands of the employee up to the limit of Rs. 10,00,000 under section 10 (10) of the Income Tax Act, 1961.
- The death benefit will be equal to Future Service Gratuity subject to a min of Rs.1000 plus gratuity settlement as per the Trust Rules. Death benefits payable to the employee are exempt from tax.
- In the event of Critical Illness, a benefit equal to rider amount, if opted will be paid. The death benefit for the remaining term to retirement will be reduced by the rider benefit paid.
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| What are the other Services to look for? |
- Employer- employee groups that fall under the purview of Payment of Gratuity Act, 1972.
- Minimum entry age: 18 years
- Maximum cover age: Retirement age as specified in the Trust Rules of the employer or 75 years whichever is lower
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| How will contributions be made? |
| At inception, the initial gratuity contribution must be paid by way of a transfer of assets to KGGP, subject to Kotak Life Insurance and the employer agreeing to the valuation of assets. Contributions towards gratuity may be revised but must be in accordance with the actuary's certificate as per Accounting Standard (AS) 15 (revised). Top-Ups are only permitted when in accordance with the actuary's certificate as per AS 15 (revised) in order to address the underfunding of the scheme. |
| The premium for life cover (compulsory) and critical illness cover (if selected) is payable annually in advance. |
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| How are the investments managed? |
- The contributions received will be allocated to each fund in accordance with the trustees' instructions at the prevailing NAV of the units. The unit prices of each fund are based on the market value of the assets in the unit fund.
- The trustees can switch from one fund to another. Units are sold and bought at prevailing NAV applicable for respective investment funds.
- The trustees can monitor the performance of the selected funds on a daily basis on our website http://insurance.kotak.com.The asset allocation of the funds is as follows:
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| Investment
Option |
Objective |
Risk - Return
Profile |
Equity |
Debt |
Cash & Money Market |
Group Balanced Fund
(SFIN: ULGF-003-27/06/03-BALFND-107) |
Aims for moderate growth by holding a diversified mix of equities and fixed interest instruments.
May also be susceptible to moderate levels of shorter-term volatility (downside risk) |
Moderate |
30%-60% |
20%-70% |
0%-40% |
Group Dynamic Floor Fund
(SFIN: ULGF-015-07/01/10-DYFLRFND-107) |
Aims to provide stable long-term inflation beating growth over the medium to longer term and defend capital against short term capital shocks.
Is likely to out-perform traditional balanced or equity funds during sideways or falling markets and shadow the rising equity markets |
Cautious |
0%-60% |
0%-100% |
0%-40% |
| Group Secure Capital Fund#(SFIN:ULGF-016-12/04/11-SECCAPFND-107) |
Will generate stable returns through investment in highly rated debt instruments including corporate debt and infrastructure debt assets, government securities and short-term investments.
Guarantees capital preservation and eliminates downside risk. |
Secure |
- |
0%-100% (Debt and Infrastructure securities- 25%-100%) |
0%-40% |
Group Bond Fund
(SFIN: ULGF-004-15/04/04-BNDFND-107) |
Returns will be in line with those of fixed interest instruments, and may provide little protection against unexpected inflation increases
Will preserve capital and minimize downside risk, with investment in debt and government instruments. |
Conservative |
- |
0%-100% (Debt and Infrastructure securities- 25%-100%) |
0%-40% |
Group Floating Rate Fund
(SFIN: ULGF-005-07/12/04-FLTRFND-107) |
- |
0%-75% (Floating Rate debt instruments- 25%-100%) |
0%-40% |
Group Gilt Fund
(SFIN: ULGF-002-27/06/03-GLTFND-107) |
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80%-100% |
0%-20% |
Group Money Market Fund
(SFIN: ULGF-001-27/06/03-MNMKFND-107) |
Will protect capital and not have downside risks |
Secure |
- |
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100% |
Fixed Maturity Plan Fund*
(SFIN: ULGF-017-14/07/11-57FM070416-107) |
Will generate stable returns through investments in a suitable mix of debt and money market instruments |
Conservative |
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0%-100% |
0%-40% |
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| Note: The aggregate exposure across the portfolios selected by the clients to equities should not exceed 60% of the total market value and to cash (money market instruments) should not exceed 40%. |
| #Kotak Group Secure Capital Fund:This is an open-ended fund that guarantees return of all contributions made one year after the date of such contributions*. The fund invests in highly rated debt instruments ensuring stable returns. The underlying capital guarantee ensures complete peace of mind regarding your gratuity liability. |
| *Kotak Fixed Maturity Plan Fund: This fund is a close-ended scheme with specified maturity length of between 3 to 120 months; and is defined by a maturity date represented in Rs.brackets'. Each series will have an initial subscription period, where at the end of the series' initial subscription period, the Fund series will close to new business. On the Maturity date, each Investor Scheme's holdings in the respective Fund Series will be switched to a fund as selected by the Policyholder. |
| This is a multiple fund series scheme where versions of the Fund defined by different maturity dates are open for subscription at the same time. The minimum investment amount will be Rs.10,00,000 and in multiple of Rs.5000 thereafter. |
| Investment Management Philosophy |
| Kotak Group's investment philosophy works on the principles of transparency, flexibility and well-defined investment portfolios. |
| Additional Protection through Critical Illness Benefit (CI UIN 107C009V02) |
| If the member suffers from one of the twelve critical illnesses covered and this is proved to the satisfaction of Kotak Life Insurance, the critical illness benefit is paid out as an accelerated amount. After payment, this benefit will cease and the death benefit for the member will reduce to the extent of the payout. |
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| Charges |
- Fund Management Charges
Each of the investment options operates in a very transparent manner, with the NAV of each fund posted on our website daily, along with benchmarks for each fund. Fund management charges vary depending on the fund size and the investment option chosen as indicated by the employer. These charges can be altered at the sole discretion of the company, subject to a maximum of 2% of funds under management, with prior approval from IRDA.
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- Surrender Charges
In case the policyholder wants to terminate/surrender the policy, a surrender charge is applicable depending upon the duration of the fund. In case a policy is surrendered in the first three policy years, the company will charge 0.05% of Fund Value with a cap of Rs.5,00,000 as surrender charge. No surrender charge will be levied if the surrender occurs after completion of three policy years.
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- Switching Charges
Kotak Gratuity Group Plan does not levy any fee for switching between fund options other than for switches out of Fixed Maturity Plan series. Thus, the employer/trustees have the flexibility to reallocate their portfolios an unlimited number of times without incurring additional charges. However, the company reserves the right to impose a switching charge subject to prior approval from IRDA.
Switching out of Fixed Maturity Plan series is permitted subject to 10 working days advance notice. The following exit penalty expressed as a percentage of Fund Value will apply:
| Time Elapsed since commencement of Kotak Fixed Maturity Plan |
Charge |
| <=25% of total maturity period |
2.5% |
| >25% and <=50% of total maturity period |
1.5% |
| >50% and <=75% of total maturity period |
0.75% |
| >75% and <100% of total maturity period |
0.5% |
Switches out of the Group Secure Capital Fund will attract no extra charges. Switches into the fund will be treated identical to new allocations into the Kotak Group Secure Capital Fund.
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- Guarantee Charges
Guarantee Charge of 0.3% p.a. on the money invested in the Group Secure Capital Fund. The charge will be calculated and deducted at the outset immediately after allocation. This charge will apply again to the entire Fund Value whenever the client chooses to reset the guarantee.
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- Mortality & Rider Benefit Charges
The mortality charges and Critical Illness Benefit charges are taken separately from the policyholder.
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| Terms and Conditions |
 Fund NAV's |
| Allocation of contribution to each fund would be done on a unitized basis as per the prevailing IRDA guidelines. |
| Calculation of Net Asset Value (NAV) = |
| (Market Value of investment held by the fund +/- the expenses incurred in the purchase/sale of assets + value of Current Assets + any accrued income net of fund management charges – value of Current Liabilities- Provisions) divided by (Number of units existing at the valuation date) |
| The Appropriation price shall apply in a situation when the company is required to purchase the assets to allocate the units at the valuation date. This shall be the amount of money that the company should put into the fund in respect of each unit it allocates in order to preserve the interests of the existing policyholders. |
| The Expropriation price shall apply in a situation when the company is required to sell assets to redeem the units at the valuation date. This shall be the amount of money that the company should take out of the fund in respect of each unit it cancels in order to preserve the interests of the continuing policyholders |
| The Appropriation or Expropriation Price (whichever prevails on the date concerned) will be used with respect to portfolio valuations for policyholders in addition to terms for full or partial surrenders, maturity and death settlement options. |
| The risk profile of
different asset classes is as under |
| Type of Asset |
Risk Profile |
| Govt. & Govt. approved securities |
Low |
| Corporate Bonds |
Medium |
| Infrastructure as defined by IRDA |
Medium |
| Money Market and Other Liquid assets |
Very Low |
| Listed Equities |
High |
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 Group Secure Capital Fund |
| This is an open-ended fund that guarantees Rs.return of all contributions made (net of past withdrawals)' at the point of exit. The guarantee is subject to following terms and conditions: |
| If money is paid into the Group Secure Capital Fund for the first time the guarantee is applicable 1 year from the date of initial contribution (Original Guarantee Effective Date). On subsequent contributions, the following rules will apply: |
- When the contribution is less than or equal to sum of past contributions (net of past withdrawals) and paid within one year of the initial contribution then the Original Guarantee Effective Date stands. However if it is made after one year of initial contribution then guarantee will be applicable immediately.
- When the contribution is more than the sum of past contributions (net of past withdrawals) then irrespective of when such subsequent contribution is made the guarantee applies, for all contributions paid to date (net of past withdrawals), one year from the date of such subsequent contribution.
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| At any time, the customer may choose to "reset" the guarantee, in which case the guarantee applies to the entire fund value amount as if it were a fresh allocation, i.e. the guarantee will apply only after 1 year, and a guarantee charge will apply to the entire fund value. |
| Partial withdrawal or switch out of the Group Secure Capital Fund will have following effect on the applicable guarantee: |
| Effect on |
If Guarantee is yet to apply |
If Guarantee applies |
| Guarantee |
G(1) = G(0) × [ 1 – withdrawal / FV(0)] |
G(1) = G(0) × [1 – withdrawal / MAX { FV(0), G(0) }] |
| Fund value |
FV(1) = FV(0) – withdrawal |
FV(1) = FV(0) × [ 1 – withdrawal / MAX { FV(0), G(0) }] |
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Where:
FV(0) = fund value before withdrawal
FV(1) = fund value after withdrawal
G(0) = guarantee amount before withdrawal
G(1) = guarantee amount after withdrawal
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 Non forfeiture Benefits |
| If the employer / trustees do not pay the contributions in accordance with the actuary's certificate AS 15 (revised) then the contract will be discontinued. |
| In case of retirement / withdrawal, proportionate gratuity for the service up to the period for which contributions were received & funding made would be payable. On death, additional death benefit will be payable. |
| The policyholder after giving three months' prior notice in writing, to the Company, may surrender the policy. On the expiration of the notice period, the Company will after deducting all outstanding amounts, pay the then current value of units subject to any charges stated and/or any taxes. |
 Termination of Policy |
| The policy and/or the benefit in respect of any member can be terminated at the sole discretion of the company, if the value of the units is not sufficient to meet any charges, taxes or expenses, or if it is found that the member data provided was inaccurate or there was any material suppression of member data within the provisions of Section 45 of Insurance Act, 1938. |
 Free Look Period |
| The Policyholder is offered a 15 days free look period, from the date of receipt of this policy. During this period the Policyholder may choose to reconsider his/her decision to hold this policy, or may choose to return the same within the said 15 days. Should the Policyholder choose to return the Policy, he/she shall then be entitled to a refund of the premium paid after adjustments for expenses for medical examination, stamp duty and proportionate risk premium for the period of cover. |
 Insurance Ombudsman |
| The company shall endeavour to promptly and effectively address Policyholder's grievances. However, in case the Policyholder may not be satisfied with the response of the company, he/she may also approach the Insurance Ombudsman located in his/her region. Details of the offices of the Ombudsman across the country are made available on the website of the company at http://insurance.kotak.com and will also be made available to the Policyholder on request. |
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| Risk
Factors |
- Unit Linked Life Insurance products are different from traditional insurance products and are subject to risk factors.
- The premium paid in Unit Linked Life Insurance policies are subject to investment risk associated with capital markets and the NAVs of the units may go up or down based on the performance of the fund and factors influencing the capital market and insured is responsible for his/ her decisions.
- Kotak Mahindra Old Mutual Life Insurance Ltd. is only the name of the company and Kotak Gratuity Group Plan is only the name of the unit linked life insurance contract and does not in any way indicate the quality of the contract, its future prospects or returns.
- Please know the associated risks and the applicable charges, from your insurance agent or the intermediary or policy document of the insurer.
- The various funds offered under this contract are the names of the funds and do not in any way indicate the quality of these plans, their future prospects and returns.
- All benefits payable under the Policy are subject to the tax laws and other financial enactments, in force from time to time.
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| If currently you do not have a Group Gratuity plan, you can start one today with Kotak Life Insurance! If you have an existing Group Gratuity plan you can transfer your fund to Kotak Life Insurance. We will help you with all the necessary paperwork and guide you through the process to make it hassle-free |
| Kotak Life Insurance assures you of a cost effective fund management for you and your employees' benefit in a transparent and simplistic manner without any hidden costs! |
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| Section 41 of the Insurance Act, 1938 states |
(1) No person shall allow or offer to allow, either directly or indirectly, as an inducement to any person to take or renew or continue an insurance in respect of any kind of risk relating to lives or property in India, any rebate of the whole or part of the commission payable or any rebate of the premium shown on the policy, nor shall any person taking out or renewing or continuing a policy accept any rebate, except such rebate as may be allowed in accordance with the published prospectuses or tables of the insurer:
Provided that acceptance by an insurance agent of commission in connection with a policy of life insurance taken out by himself on his own life shall not be deemed to be acceptance of a rebate of premium within the meaning of this sub section if at the time of such acceptance the insurance agent satisfies the prescribed conditions establishing that he is a bona fide insurance agent employed by the insurer. |
| (2) Any person making default in complying with the provisions of this section shall be punishable with fine which may extend to five hundred rupees |
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| Section 45 of the Insurance Act, 1938 states |
| No policy of life insurance effected before the commencement of this Act shall after the expiry of two years from the date of commencement of this Act and no policy of life insurance effected after the coming into force of this Act shall, after the expiry of two years from the date on which it was effected be called in question by an insurer on the ground that statement made in the proposal or in any report of a medical officer, or referee, or friend of the insured, or in any other document leading to the issue of the policy, was inaccurate or false, unless the insurer shows that such statement was on a material matter or suppressed facts which it was material to disclose and that it was fraudulently made by the policy holder and that the policy holder knew at the time of making it that the statement was false or that it suppressed facts which it was material to disclose: |
| Provided that nothing in this section shall prevent the insurer from calling for proof of age at any time if he is entitled to do so, and no policy shall be deemed to be called in question merely because the terms of the policy are adjusted on subsequent proof that the age of the life insured was incorrectly stated in the proposal. |
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Kotak Gratuity Group Plan – UIN No.: 107L010V03 Form No: L010 Ref No: KLI/11-12/E-PB/004
CI - 107C009V02, Form No. C009 |
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Regn. No.: 107,
Regd. Office:
Kotak Mahindra Old Mutual Life Insurance Ltd.
4th Floor, Vinay Bhavya Complex,
159 A, C.S.T. Road, Kalina,
Santacruz (East),
Mumbai - 400 098
Website: http://insurance.kotak.com
Email: lifeexpert@kotak.com.
SMS KLIFE to 5676788 Toll Free No. – 1800 209 8800 |
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| Tax Benefits are subject to change in tax laws. You are advised to consult your tax advisor for details. |
| Insurance is the subject matter of the solicitation. This is a non-participating unit-linked group plan. This document is not a contract of insurance and must be read in conjunction with the Policy Document. For details on riders, please refer to the Rider Brochure. |
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