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  • Kotak e-Term Plan

    Kotak e-Term Plan is a pure term plan that provides a high level of protection to your loved ones in your absence.

  • Kotak Health Shield

    The Kotak Health Shield Plan helps secure your finances in times of sudden medical expenses related to illness such as Cardiac, Liver, Neuro and Cancer (all early and major stages of illness /conditions of Cancer); along with offering protection for Personal Accident - in case of accidental death or disability.

  • Kotak Lifetime Income Plan

    Kotak Lifetime Income Plan gives you the assurance of your income continuing throughout your life and in your absence throughout the lifetime of your spouse!

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Retirement and Pension Plans

Buy Retirement Plan Online Online Savings Plan - Kotak Life

Take care of yourself even in retirement

You like to live life king size. Why should that change when you retire and have all the time to enjoy the thrills of life? Choose a Retirement Plan and instead of limited possibilities, open your doors to limitless fun and security.

  • A sense of self-reliance

  • Relaxed retired life

  • Assurance of savings

  • Emotional wellbeing

Retirement planning refers to a multi-step process of defining retirement income goals and the strategy required to achieve the said goals. It involves identifying income sources, assessing expenses, executing a savings strategy and managing overall risk. In general terms, retirement planning involves making financial strategies to save, invest and distribute money for your sustenance and survival during retirement.

Retirement is considered as the golden period of life. Hence, it is important to plan this time in a way that you are financially stable and do not outlive your savings. Kotak Life understands the need to maintain your financial independence even after retirement. To enable you to take care of yourselves, we offer two attractive retirement plans so that you ‘Live Life King Size’ even after retirement.

Why do You Need a Good Retirement Plan?

Retirement planning is not limited to assets and income. It includes a holistic evaluation of these, along with future costs, liabilities and overall life expectancy. Ideally, it is a life-long process, which can be started at any time. However, it is always best to plan your retirement years well and much in advance. Starting your retirement planning when young offers you more opportunities to grow your funds, absorb risk and ensure future security.

  • Tackle impending medical emergencies: As you age, health problems only increase. This means you would be required to shell out more money towards medical expenses later in life. It is expected inflation in this space would rise by nearly 14-15% each year. So, your savings should also grow at the same rate to be able to provide for your medical expenses during retirement.
  • Effectively combat inflation in the future: Inflation is a sad reality, and in a country like India, inflation is expected to cross the standard 5% estimate. This would imply that by the time you retire, your savings would be worth much less in comparison to the present times. A robust retirement plan will ensure you do not outlive your reserves and have a strong purchasing power even in retirement.
  • Substitute the lack of state sponsorships: Unlike the UK and the U.S., there are no specific pension plans or other retirement plans India offered to retirees of the private sector. Hence, after retirement, you have to take charge. 

What are the Benefits of Retirement Planning?

Retirement planning is a crucial process to ensure you enjoy the non-working years of your life. For this purpose, you need to invest yourself in a reliable retirement plan so that you are secured for life. Here are some significant benefits of retirement planning:

  • Peace of mind and well-preparedness: A well-planned retirement not only reduces your stress but also makes you more prepared for uncertainties and emergencies, including medical crises. It provides you with a sense of self-reliance and makes your golden years more relaxed.
  • Assurance of savings and steady retirement income: Planning adequately for retirement ensures you have substantial savings to support your standard of living during a time when you do not have a steady source of income.
  • Secure property and assets: Without a strong retirement plan, you would more be inclined towards selling off assets and properties to manage your expenses later. However, building a retirement fund will safeguard your assets and property, and allow you to pass it on as a legacy to your children.
  • Effective transition from working to non-working mode: An in-depth retirement plan helps you transition smoothly from a working force to a non-working force. You would be in a more secure place and can move on in life easily.
  • Reduction in taxes in later years of life: Retirement planning helps you reduce taxes that you would otherwise be liable to pay during retirement. A good retirement plan can also help you to minimise liabilities and taxes for the beneficiaries.
  • Minimise costs with lower premiums at a young age: A retirement plan made in the younger years helps you to minimise costs. You would be likely to pay lower premiums when younger, you can take more risks in retirement investments, and thus, have better chances to save and grow funds.

What are Retirement Pension Plans?

Retirement pension plans are reliable financial future security solutions. Pension plans are similar to an investment plan, where you can accumulate a share of funds, allowing it to grow over a long period. The purpose of investing in a pension plan is to safeguard the future years of life and secure a regular income after retirement. Retirement pension plans provide you with financial independence, allowing you to live your life with pride even after retiring. A good retirement pension plan can help maintain your and your family’s living standard, as well as combat the rising inflation and the overall high cost of living.

You can choose to pay regular pension plan premiums or a lump sum payment, and allow your funds to grow significantly during the working years of life. These funds can be used to create a stable income during retirement. Among other pension plans in India, Kotak’s Premier Pension Plan, helps you accumulate adequate retirement wealth to live the golden years of your life. This retirement pension plan allows your funds to grow sufficiently and also offers assured benefits on death and vesting.

What are the Features and Benefits of Buying a Retirement Pension Plan?

A retirement pension plan is a very popular retirement investment plan tool. Some of its most significant features and benefits include:

Features of a retirement pension plan

  • Guaranteed Additions to the Basic Sum Assured: Pension plans like Kotak Premier Pension Plan, offers guaranteed additions to investors in the first five policy years. The additions are calculated as a percentage of Basic Sum Assured. The sum is added to the pension plan at the end of year financial year and is payable either on vesting or on death, whichever is earlier.
  • Earn bonus every year: Leading pension plans, such as Kotak Premier Pension Plan, provide a bonus starting from the sixth year of the policy. This will ensure your funds are not stagnant and grow over time.
  • Assured benefits: Retirement pension plans offer assured retirement pension benefits. Kotak Premier Pension Plan offers you a minimum guaranteed benefit. This is payable either on death or on vesting and amounts to 105% of the Total Premiums paid till the time of death or vesting, whichever is earlier.

Benefits of a retirement pension plan

  • Provide guaranteed monthly income: Pension plans, offer a fixed income in retirement in exchange of investments made today. Moreover, you can select a monthly income plan for a specific period or your whole life post-retirement.
  • Allow you to choose asset classes to diversify funds: Best pension plans in India, like Kotak Premier Pension Plan, allow you to choose classes of assets, which will majorly form your portfolio.
  • Facilitate encashing on the long-term investment benefits: Since retirement pension schemes are long-term, your funds can earn significant benefits. Retirement pension plans accumulate a strong corpus, allowing you a steady income in retirement.
  • Offer flexibility in payment of premiums: Retirement plans India allow you to either invest a lump sum and get immediate annuity receipts or select a deferred plan that allows the funds to accumulate more interest until the payments begin. Moreover, the plans also have high vesting age, usually 40 to 70 years.
  • Provide death benefits and riders like a life insurance cover: Some pension plans offer a death benefit, where a lump sum is paid to the family or the nominee. There are also optional riders like accidental death benefit and permanent disability benefit rider.
  • Offer tax benefits allowing more savings: Retirement pension plans are eligible for tax deductions up to Rs. 1. 5lac under Section 80CCC and 10(10A) as per the Income Tax Act, 1961. 

What are the Eligibility Criteria for Investing in a Retirement Pension Plan?

Best pension plans in India have a similar type of eligibility requirements. Some basic eligibility criteria include:

  • Minimum and maximum entry age limits: To be eligible for investing in retirement plans India, you should be at least 30 years old. However, you cannot invest in a pension plan if you are above 55 or 60 years, depending on the type of scheme.
  • Minimum and Maximum Basic Sum Assured: You cannot invest less than Rs. 2 lacs in a retirement pension scheme. Alternatively, the upper limit is subject to underwriting.
  • Minimum and Maximum vesting age: In most retirement pension plans, the vesting age is between 45-70 years.
  • Policy term: The policy term varies per the chosen retirement pension scheme. Generally, the policy tenure ranges from 10-30 years.
  • Premium payment term: In most cases, you are required to pay the premium only for the chosen policy period.
  • Premium modal factor: Generally, there are three premium modal factors – yearly, half-yearly and monthly. The percentage varies for each.

What is the Best Time to Invest in a Retirement Pension Plan?

If you meet the eligibility age criteria for a retirement pension plan, then the best time for a retirement investment plan is now, implying as soon as possible. There are significant benefits of investing early on in retirement pension schemes, these include:

  • Allowing them more time to grow through the power of compounding: The younger you start your retirement investment plan, the more your funds will grow because of the compounding of money. So, if you are 45 years old and you start investing Rs. 1.5 lacs in a pension plan, then by the time you turn 60 years, your savings would be Rs. 44 lacs or Rs. 31 lacs (assuming they grow at 8% and 4%, respectively). But if you would have saved at least 5 years earlier, you would be making Rs. 74 lacs or Rs. 46 lacs (if savings are compounded at 8% and 4%, respectively).
  • Effectively beating rising inflation to protect future purchasing power: As per general phenomenon, inflation tends to rise. So, the later you start saving, the more you have to save for an adequate retirement. Moreover, the value of money will go down with time due to inflation, and your future purchasing power will suffer if your retirement investment plan starts late.
  • Ease in paying future medical costs that are rising by the day: As per reports, medical costs rise 15-17% every year. This would mean you need more money to pay off medical expenses during retirement. Moreover, with rising age, medical costs tend to be heavy on the pocket. All this can eat up your retirement income plan if you do not save early on life to build an adequate corpus for the future.

What are the Documents Necessary to Buy a Retirement Pension Plan?

Below are the documents necessary to buy the best retirement plan:

  • Age proof credentials like birth certificate, driving license, passport, high school certificate, etc.
  • Identity proof such as Aadhaar card, passport, PAN card, driving license, etc.
  • Address proof including passport, driving license, telephone bill, Aadhaar card, etc.
  • Income proof like salary slip, bank account statements or Income Tax Returns (ITR).

In some cases, companies offering retirement pension schemes ask you to also provide recent medical reports before the purchase of the retirement investment plan.

Retirement Plans from Kotak Life

Kotak Life offers two retirement plans so that you are assured of a relaxed retired life. The assured returns and host of features guaranteed complete financial and mental well-being in your golden years.

Let us look at the two Kotak Life retirement plans:

  • Kotak Premier Pension Plan:
  • This is a traditional participating pension plan that offers assured benefits on vesting or death of the policyholder. The basic features of the plan are:

    • Avail a percentage of the basic sum assured as Guaranteed Additions in the first 5 policy years which will be payable either on vesting or on death (whichever is earlier).
    • Bonuses will start accruing from the 6th policy year.
    • Enjoy an assured benefit of 105% of the total premiums paid on death or vesting.
    • Two riders to further boost your protection – Kotak Accidental Death Benefit Rider and Kotak Permanent Disability Benefit Rider.
  • Kotak Lifetime Income Plan:
  • This is an Immediate Annuity Life Insurance plan that assures a continuing income for life – for you and your spouse. Key features of this plan include:

    • Regular income after retirement for a stress-free and financially secured retired life
    • Six Annuity Income Options to choose from based on your specific needs
    • Yearly, half-yearly, quarterly and monthly payment modes

FAQs

  • 1. What are Retirement Plans?

  • 2. How do Retirement Pension Plans Work?

  • 3. What is the Difference Between a Retirement a TPlan and erm Plan?

  • 4. Why Should I Invest in a Retirement Plan?

  • 5. What is an Income Plan?

  • 6. What is a Pension Plan? 

  • 7. I have Invested in a Provident Fund. Should I Still Buy a Retirement Plan?

  • 8. Why do I Need to Include a Retirement Pension Plan in my Long-Term Financial Plan?

  • 9. Can I Invest in Multiple Retirement Plans at a Time?

  • 10. Can I Avail Tax Benefits with a Retirement Plan?

  • 11. What Happens to the Retirement Plan after the Policyholder’s Death?

Our Term Insurance plans

Browse through the following plans to know more

  • Kotak Premier Pension Plan

    Kotak Premier Pension Plan helps you accumulate enough wealth for your retirement, while you are earning sufficiently and also offers assured benefits on death and vesting.

  • Kotak Lifetime Income Plan

    All these years you have saved money to ensure a comfortable and financially independent life post retirement.

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