In
today’s competitive market scenario, it’s tougher to keep
your customers rowing towards you and who aims to retain the leadership
in the market. Kotak Complete
over Grouplan can provide your institution
the required value-add to differentiate your products and make them more
competitive. This plan can be customized to match your product characteristics
as much as the needs of your customer and your institution.
What are the advantages to me as a credit
institution?
- Eliminates the
risk of default in the event of death of the borrower.
- Facilitates competitive
pricing for credit products and ensures a differentiating edge over
your competitors.
- Significant
opportunity to earn fee-income.
- Does not require
a Corporate Agency or Referral tie-ups.
- Extremely cost-effective
because of group pricing dynamics and premium recovered from the customer.
- Hassle-free
administrative procedures
What
are the eligibility requirements?
- The minimum
age at entry is 18 years
- The maximum age
at entry is 59 years
- The maximum
ceasing age of the plan is 60 years
What
happens in the event of death of a borrower?
In
the event of death of a borrower, the outstanding loan amount would be
paid by Kotak Life Insurance as a death benefit to the credit institution.
What is maximum amount of cover allowed
under the plan?
The maximum cover allowed per member will vary from group to group up
to a maximum of the original value of the loan.
In what ways can the cover be expressed?
The cover can be structured to meet the Credit Institution & borrower’s
needs. Generally it is expressed in terms of Original Loan Amount or Outstanding
Loan Amount on the date of death etc. The choice of cover will depend
on the requirements of the credit institution, the cost constraints, the
type of scheme and the data that can be provided. The maximum period availed
for the term cover is 30 years.
What
happens if a borrower prepays his loan?
In the event of prepayment of the loan, a portion of the single-premium
paid will be refunded. Further details of the premium refund formula are
available upon request.
How large can a group be?
Atleast 25% of the borrowers in the group should opt for the life cover
subject to a minimum of 1250 members. Kotak Life Insurance provides the
option of compulsory or voluntary membership for the borrowers of credit
institution. There is no restriction on the maximum number.
Are
there any tax benefits?
The premium paid by the credit institution could be considered as part
of business expenses and may be tax deductible. Any premium paid by a
borrower in his/her capacity as an individual will be eligible for tax
deduction under section 80(C) of the Income Tax Act, 1961 and they receive
the benefits by the borrower’s nominee are tax free under section
10(10 D) of the Income Tax Act, 1961
When will the cover terminate?
- The cover for
a member will cease on the earliest of:
- The date on which
the loan is repaid by the borrower.
- The ceasing
age of the policy as per the contract norms..
- The scheduled
expiry date of the loan as per loan contract.
- The termination
of the contract as per the provisions of the loan contract.
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