In today’s competitive market scenario, it’s getting tougher to attract and retain customers, let alone aiming for market leadership. Kotak Complete Cover 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 is the Kotak Complete Cover Grouplan?
The Plan provides life cover to a group of borrowers of the credit institution (banks, retail finance providers etc.) with the Life Assured being the borrower and the Credit Institution being the beneficiary. It is a non-participating single-premium plan and can be customized to cover all types of loans and repayment terms.

The plan can be compulsory (all members join) or voluntary (subject to certain conditions). In the unfortunate event of death of the borrower during the term of the policy, the outstanding loan amount would be repaid by Kotak Life Insurance, relieving the borrower’s family of the loan liability and eliminating risk of loss due to death of the borrower to the Credit 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 advantages to my borrowers?

• The borrower’s family is relieved of the financial burden of paying the outstanding loan amount
• The pooling of risk (group cover) allows the cover to be provided at a low cost
• Hassle-free and convenient documentation process
• Relaxed medical examination norms (subject to applicable conditions)
• The life cover is available 24 hours a day, 7 days a week, anywhere in the world

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.

How is the premium paid?
KCCG is a single premium policy. The premium is payable once at the commencement of the policy by the credit institution. You may wish to recover the premium amount directly from your borrowers through a one-time charge, or through an addition to the monthly loan repayment. You also have the option of purchasing the insurance cover as a value addition to your credit product at no additional cost to your borrowers.

What is the term of the Kotak Complete Cover Grouplan?
The insurance cover can be for any term up to a maximum of 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
• Benefits received 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
• The date the borrower attains the ceasing age as in the policy contract
• The date of scheduled expiry of the loan as per loan contract
• The date on which the contract terminates as per the provisions of loan contract

What services can we expect?

• A dedicated Customer Relationship Manager for effective initiation and regular servicing
• Comprehensive operational and post-launch support from centralized Group Operations Team
• Centralized customer support for query handling on an ongoing basis