Life insurance plans are a great way to save tax. They are the most sought-after tax-saving instruments that also guarantee insurance. There are seven different kinds of life insurance plans in India.

Of them, the most preferred ones are term insurance plans, money back plans, and endowment plans. These life insurance policies come with certain guarantees. These plans are always a hit amongst those preferring tax benefits because they come with a guarantee.

Most life insurance companies endorse their best life insurance plans with guarantees. Unlike the regular policies that offer a declaring bonus that differs based on the profits made by the insurers, the plans with guarantees offer a specific amount as returns instead of the bonus. There are guaranteed returns at every stage of the policy however there are myths about the investments. The basic returns that are guaranteed include:

• A specific amount upon maturity
• Monthly payouts

Understanding Guarantees of Life Insurance Plans

Guarantees are offered as a part of certain life insurance plans and term insurance plans. They include the payment of a certain percentage of premiums per annum or a payout of a certain percentage of the annual premium each year.

The percentage of premium payments that are promised per annum vary between 7 to 10% per annum. Some insurance companies also offer maturity benefits and/or death benefits that are more than 100 of the sum assured. Certain insurance companies also offer cash benefits every month that range anywhere between 1 to 3% of the overall maturity benefit that is guaranteed.

Be it endowment plans or term insurance plans or any other kind of life insurance plans, the guarantees offered are not the same across plans. These vary from one insurance company to another. Some companies offer guarantees based on the premium the customer pays every month while some offer the guarantees based on the overall sum assured.

Some of the aspects in which the guarantees vary are:

• • The policies of the insurance company
  • The overall policy term
  • The term of premium payment (monthly/quarterly/half-yearly/annual)
  • The year in which the guarantees get added to the scheme
  • Method of payment of guarantees (monthly or lump sum)

In some plans, the guaranteed amount gets added to the plan as returns from the second year of policy induction whereas in some plans it may take a few years to receive guaranteed returns. In some plans, the returns are added to the term insurance plan or life insurance plan monthly or every quarter like a regular income whereas in some plans the guaranteed amount is paid as a lump sum only after maturity.

How Do Returns Work in Life Insurance Plans?

The guaranteed amount that is offered as benefits accumulates only on maturity. The actual returns are not what the customer perceives by calculating promised percentages. What is commonly not understood by the customer is that be it any form of life insurance like a term insurance or a money back plan, the guaranteed amount comes at a cost. The returns that a customer receives after the costs are adjusted are pretty low.

Here are some of the factors that influence the guaranteed returns:

• • Age of the customer
  • Term of the plan
  • The premium amount paid through the period of the plan
  • The mean average of the internal rate of return

For most life insurance plans including the term insurance plans, the calculated internal rate of return falls in between 4% to 6% per annum. The plans that offer exclusive guarantees offer even a lesser percentage of this return.

A Look At Life Insurance Plans That Offer Guarantees

The life insurance environment including plans like term insurance has undergone a sea of change in the last few decades. The terms that govern the plan are explained with jargon and terms that a common man may not be able to comprehend.

The following is an example of how a life insurance plan with guarantees typically works. Suppose if there is a plan with guarantees with a ten-year term in which the customer has to pay premiums for eight years. If the plan were to offer guarantees of 150% of the premium after maturity every year for a total time-frame of eight years, a customer paying a premium of Rs 10,000 for the first eight years will receive a payout of Rs 15,000 from the tenth year of the policy to the 17^th year.  In such a scenario, the internal rate of return for the above plan comes only to about 2.9% per annum.

While customers always believe in the percentage stated by the insurance company, in this case, 150%, they forget to count the number of maturity years and the internal rate of return.

Conclusion:

Choosing the right plan for you should ideally depend on the way the payouts are made. If you are someone who is looking for a regular income, choose a plan that makes payments regularly after maturity and don’t fall on the guaranteed life insurance plans rather look and go through the documents carefully. If you are not in need of such an income, choose a plan that hands out the payment as a lump sum on maturity from these life insurance companies.

Some tips to remember while choosing guaranteed plans:

• Choose it if you are looking for fixed returns
• Choose this if you have financial targets for the future
• Choosing guaranteed plans only to save tax is a bad idea
• Do not forget to calculate your ideal returns in the long term and decide if the plan is worth it
• A financial adviser would be able to offer you the best-guaranteed plans while considering your needs

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SBI constitutes to be one of the largest financial institutions in the country. In the third quarter of the year 2017-18, SBI Life Insurance Co. Ltd witnessed a substantial growth of around 41.9% in the new business premium. However, now that the growth engine is in full swing, SBI now needs to focus on the quality part. Scroll down to know more…

1. Propellants of the Growth Engine

SBI is also the largest insurance provider in India. As reported by SBI, this substantial growth in the premiums has been largely fostered by the retail individual business. Not just fresh premiums but renewal premiums have also contributed to the reported growth.

2. Growth in Assets under Management

Owing to the growth in premiums, SBI Life has also undergone an impressive growth in assets under management. The growth in assets under management was around 17.6% in 2016-17 until the end of nine months in December. However, in this financial year, by the end of December, the growth was reported to be 23%.

3. New Business Acquisitions

New business acquisitions refer to an increment in costs. Although marginal, SBI has shown an increment in the percentage corresponding to the new business premiums.  Earlier, the percentage was 12.3%, which has now gone up to 12.6%.

4. Persistence Ratios

Improvement in persistence ratios has been another vital aspect. It indicates that SBI Life continues to leverage on the incomparable reach of its parent distribution network. It also indicates that SBI Life products are not just sold in the market but also are held on to.  However, this is quite natural given that the sale of insurance products contributes to more than 65% of the entity’s business.

5. Featuring on the Stock Exchanges

Lately, insurance companies have started to feature on the stock exchange. According to investors, this calls for potential growth, and therefore investors look at these events in a positive manner. In the past five years, SBI life’s market share has grown from 13% to around 20%.  No wonder, analysts have given SBI Life Stock the ‘buy’ rating. Further, December figures indicate that the Profitability of SBI Life has increased.

6. Future Prospects of SBI Life

The current picture appears to be positive and promising. Similarly, future prospects also appear to be positive and secure. An improvement in the persistence ratios has been indicating the safety of the future prospects. Now, if you take a look at SBI Life’s persistence ratios, there have been a lot of changes. For instance, persistence ratio for the thirteenth month was at 79.81%. However, it increased to around 81.51% in the last year. Similarly, the persistence ratio, which was around 67.48%, increased to around 68.81% in the 37^th month.

But surprisingly, the ratio for the 61^st month considerably fell down to 59.48% from 69.59%.

7. Traditional Policy Options Still Continue to Lead the Race

Strong equity markets have in turn strengthened the sales of market-associated products for most of the insurance companies, including SBI. Despite this, it is the traditional policy options, especially the protection plans that earn long-term profits. It is not surprising that the traditional policy options offered by SBI still lead the product portfolio. This fact is supported by the 18% growth exhibited by SBI.

8. SBI Life Focusing on Quality

For any business entity, small or large, local or global, what matters the most is quality! With the growth patterns that have appeared last year, SBI appears to be on a growth spree. However, now that the growth wagon is running steadily, SBI should now focus on the quality of business, and that is the protection plans. As mentioned earlier, protection plans have been traditional, tried and tested profit tools for SBI. Hence, it is necessary for them to further strengthen this area quantitatively as well as qualitatively.

No doubt, SBI has struck the right chords when it comes to business profitability. SBI has shown substantial growth in almost all the areas. However, what lies ahead are more challenges, and therefore, it is imperative for the organization to concentrate on quality by focusing on its protection plans.

Refer our section to read about other Life Insurance Companies in India.

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Kotak Life insurance is a private life insurance company in India. At the present date, the company caters to more than fourteen million customers. Also, the company has 232 branches across various cities in the subcontinent. Kotak Life has an agency potency of over ninety thousand agents.

Benefits of the Kotak Mahindra Life Insurance

As far as the customer benefits of Kotak life is concerned, it is important to note that it is one of the quickest growing organizations in the insurance sector today. At present, Kotak life has a total of more than three million policyholders across the Indian subcontinent.

A very significant feature of the Kotak life is that its portfolio is facilitated to be able usher the customer to the most lucid and comprehensive insurance policy. According to the range of subjective investments, Kotak life ensures efficient solutions for both individuals and group entities.

Apart from the aforesaid features, the company also has the best claim settlement ratio in the industry. The company offers assistance in a number of fields that include savings and investments instruments, protection plans, child plans, or even superannuation policies. Therefore, it is due to the fact that Kotak Life is the most comprehensive outlet pitched to provide for long term goals, the proficiency of the company can be assured.

Kotak Mahindra Protection Plans

So far as the Kotak Mahindra Protection Plans are concerned, following are the various significant plans offered by the company:

• Kotak Saral Suraksha: The said plan, it is important to note, is valid for a tenor of five years or ten years. It is a quintessential term plan with premiums that are considerably affordable.
• Kotak Preferred Term Plan: So far as this plan is concerned, it chiefly offers two death benefit payout options. One is popularly known as the Recurring Payout and the other, Immediate Payout. Apart from this, it also offers rates for female customers and non-smokers.
• Kotak Preferred e-Term Plan: It is chiefly a protection plan that offers a significant standard of protection for a price of Rs. 6975 per annum.
• Kotak Term Plan: So far as Kotak term plan is concerned, it also caters to female customers while offering them a significant standard of protection at prices that are considerably feasible.
• Kotak Income Protection Plan: Chiefly it offers a monthly income that augments at six percent per annum. Apart from this, the plan also offers a lump sum amount to guarantee the family of the insurer has enough funds to use even in the absence of the concerned insurer.

Kotak Mahindra Savings and Investments Plans

One of the more popular plans offered by the insurance company, it is in vogue due to the fact that it provides affordable plans and policies that let customers earn and also save their money. Following are some of the major important plans under this policy:

• Kotak Assured Income Accelerator: This plan promises guaranteed maturity along with hefty death benefits. Apart from this, the plan also promises incremental definite income during the payout period.
• Kotak Gramin Yojana Bima: It offers a single premium product with maturity along with subsequent death benefits. It is chiefly concerned with the rural sector of customers.
• Kotak Premier Money back Plan: This plan chiefly shells out lump sums at regular intervals.
• Kotak Classic Endowment Plan: So far as the Kotak Classic Endowment Plan is concerned, it is important to note, it offers considerable protection benefits to the customers along with bonus in the policy tenor.
• Kotak Platinum: Chiefly concerned with providing protection benefits to the customers, it also offers opportunities of wealth accumulation. Also, it offers guaranteed maturity benefits to the customers.
• Kotak Single Invest Advantage: It is important to note that this plan offers good returns and is one of the more popular single premium life and investment plan.
• Kotak Ace Investment: It is interesting to note that the said plan offers a choice of seven funds to choose from along with the ability to switching between the funds.

How Can One Claim Insurance with Kotak Life?  

In case of the decease of a life insured, the concerned nominee must insinuate the company about the claim by sending a precise letter to the Claims Department.

What are the Documents Needed to Claim Insurance with Kotak Life?

Before claiming the insurance, it is necessary to be detailed about the important dossiers needs to be accompanied by the concerned insurer. They include:

• Death claim intimation form (the form should be carefully and precisely filled)
• Original policy documents
• Original death certificate
• A photograph, photo ID proof and current address proof of the claimant concerned.
• A copy of the bank passbook
• Medical questionnaire
• Settlement option form
• A copy of driving license (in case)

Please refer other Life Insurance companies in India.

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