INTRODUCTION

Kotak Mahindra Old Mutual Life Insurance Limited[1] is a private Life

Insurance company in India. The company is jointly owned by Kotak Mahindra
group of India and Old Mutual of South Africa in 74:26 ratio respectively.[2] The
company was founded in 2001. The company currently caters to 15 million
customers.[3] The company has presence of 232 branches in around 167 cities
and towns in India and has an agency strength of 99,275 agents.[4]

Old Mutual is an international long-term savings, protection and investment

group. The company is based out of South Africa and was established in 1845.
The company owns 26%-owned joint venture in India with Kotak Mahindra
Bank providing life insurance, retirement pensions, savings and investments.[5]
 MEANING

Insurance is a means of protection from financial loss. It is a form

of risk management primarily used to hedge against the risk of a
contingent, uncertain loss.

An entity which provides insurance is known as an insurer, insurance

company, or insurance carrier. A person or entity who buys insurance
is known as an insured or policyholder. The insurance transaction
involves the insured assuming a guaranteed and known relatively
small loss in the form of payment to the insurer in exchange for the
insurer's promise to compensate the insured in the event of a covered
loss. The loss may or may not be financial, but it must be reducible to
financial terms, and must involve something in which the insured has
an insurable interest established by ownership, possession, or
preexisting relationship.

The insured receives a contract, called the insurance policy, which

details the conditions and circumstances under which the insured will
be financially compensated. The amount of money charged by the
insurer to the insured for the coverage set forth in the insurance policy
is called the premium. If the insured experiences a loss which is
potentially covered by the insurance policy, the insured submits a
claim to the insurer for processing by a claims adjuster.
 DEFINITION
Risk-transfer mechanism that ensures full or partial financial compensation for
the loss or damage caused by event(s) beyond the control of the insured party.
Under an insurance contract, a party (the insurer) indemnifies the other party
(the insured) against a specified amount of loss, occurring from specified
eventualities within a specified period, provided a fee called premium is paid. In
general insurance, compensation is normally proportionate to the loss incurred,
whereas in life insurance usually a fixed sum is paid. Some types of insurance
(such as product liability insurance) are an essential component of risk
management, and are mandatory in several countries.
Insurance, however, provides protection only against tangible losses. It cannot
ensure continuity of business, market share, or customer confidence, and cannot
provide knowledge, skills, or resources to resume the operations after a disaster.
What is Life Insurance?
Traditionally, life insurance used to provide financial protection to your family
and dependents in the event of any unforeseen event or your untimely death.
But nowadays, life insurance has become synonymous with savings, wealth
generation and protection. Life insurance companies-these days-provide plans
through which you can not only secure the financial future of your dependents
in the event of death but also build wealth for them and be financially secure
from eventualities such as disease and disability.
Why Life Insurance?
Life insurance is required because of the following factors -

Life insurance takes care of those who are financially dependent on you even
when you are not around to look after them.

Retirement planning takes care of your retirement, as there is no guarantee of a

consistent income post retirement.

The expenses you may incur in future will keep increasing due to inflation,
and thus even a fluctuation in your income may lead to a compromised lifestyle.

Savings plan enables individuals to secure their financial future by helping you
to get attractive returns.

Why Kotak Life Insurance?

Kotak Life Insurance (Kotak Mahindra Old Mutual Life Insurance Ltd.) is one
of the leading life insurance companies in India. It is a joint venture between
Kotak Mahindra Bank Ltd. and Old Mutual plc, South Africa, one of the biggest
life insurance companies in the world. We are committed to using our expertise
in securing your future and ensuring that your investments keep giving you
lucrative returns.

Kotak Mahindra Life Insurance Policy

A life insurance policy provides financial protection to your family in

the unfortunate event of your death. At a basic level, it involves
paying small sums each month (called premiums) to cover the risk of
your untimely demise during the tenure of the policy. In such an
event, your family (or the beneficiaries you have named in the policy)
will receive a lump sum amount. In case you live till the maturity of
the policy, depending on the type of life insurance policy you have
opted for, you will receive returns the policy may have earned over
the years. Today, there are many variations to this basic theme, and
insurance policies cater to a wide variety of needs.
Various Types Of Life Insurance Policies

Given below are the basic types of life insurance policies. All other life
insurance policies are built around these basic insurance policies by
combination of various other features.

Term Insurance Policy

A term insurance policy which is now also available as E-term insurance

policy is a pure risk cover policy that protects the person insured for a
specific period of time. In such type of a life insurance policy, a fixed sum
of money called the sum assured is paid to the beneficiaries (family) if the
policyholder expires within the policy term. For instance, if a person buys a
Rs 2 lakh policy for 15 years, his family is entitled to the sum of Rs 2 lakh
if he dies within that 15-year period.

If the policy holder survives the 15-year period, the premiums paid are
not returned back. The advantage, apart from the financial security for an
individuals family is that the premiums paid are exempt from tax.

These insurance policies are designed to provide 100 per cent risk cover
and hence they do not have any additional charges other than the basic
ones. This makes premiums paid under such life insurance policies the
lowest in the life insurance category.
Whole Life Policy

A whole life policy covers a policyholder against death, throughout his

life term. The advantage that an individual gets when he / she opts for a
whole life policy is that the validity of this life insurance policy is not
defined and hence the individual enjoys the life cover throughout his or her
life.

Under this life insurance policy, the policyholder pays regular premiums
until his death, upon which the corpus is paid to the family. The policy does
not expire till the time any unfortunate event occurs with the individual.

Increasingly, whole life policies are being combined with other insurance
products to address a variety of needs such as retirement planning, etc.
Premiums paid under the whole life policies are tax exempt.
Endowment Policy

Combining risk cover with financial savings, endowment policies are

among the popular life insurance policies.

Policy holders benefit in two ways from a pure endowment insurance

policy. In case of death during the tenure, the beneficiary gets the sum
assured. If the individual survives the policy tenure, he gets back the
premiums paid with other investment returns and benefits like bonuses.

In addition to the basic policy, insurers offer various benefits such as

double endowment and marriage/ education endowment plans.

The concept of providing the customers with better returns has been
gaining importance in recent times. Hence, insurance companies have
been coming out with new and better ULIP versions of endowment
policies. Under such life insurance policies the customers are also
provided with an option of investing their premiums into the markets,
depending on their risk appetite, using various fund options provided by
the insurer, these life insurance policies help the customer profit from
rising markets.

The premiums paid and the returns accumulated through pure endowment
policies and their ULIP variants are tax exemple
Money Back Policy

This life insurance policy is favoured by many people because it

gives periodic payments during the term of policy. In other words,
a portion of the sum assured is paid out at regular intervals. If the
policy holder survives the term, he gets the balance sum assured.

In case of death during the policy term, the beneficiary gets the
full sum assured.

New ULIP versions of money back policies are also being

offered by various life insurers.

The premiums paid and the returns accumulated though

a money back policy or its ULIP variants are tax exempt.

ULIPs
 ULIPs are market-linked life insurance products that provide a
combination of life cover and wealth creation options.

A part of the amount that people invest in a ULIP goes toward

providing life cover, while the rest is invested in the equity and
debt instruments for maximising returns. .

ULIPs provide the flexibility of choosing from a variety of fund

options depending on the customers risk appetite. One can opt
from aggressive funds (invested largely in the equity market with
the objective of high capital appreciation) to conservative funds
(invested in debt markets, cash, bank deposits and other
instruments, with the aim of preserving capital while providing
steady returns).

ULIPs can be useful for achieving various long-term financial

goals such as planning for retirement, childs education, marriage
etc.

Annuities and Pension

In these types of life insurance policies, the insurer agrees to pay the insured a
stipulated sum of money periodically. The purpose of an annuity is to protect
against financial risks as well as provide money in the form of pension at
regular intervals.
Different Types of Life Insurance Plans

Traditional life insurance plans:

Traditional life insurance plans, also known as non-unit linked insurance plans,
ensure that the majority of the investments made by the policyholders are in to
safe debt instruments. These plans are ideal for risk-averse investors as they
provide assurance of returns to a large extent.Unit Linked Insurance Plans
(ULIPs):

ULIPs, also known as market-linked life insurance plans, allow for investments
made by the policyholders to get exposed to equities. ULIPs are suited for
customers who aim for wealth creation over a long ter

Role Of Life Insurance

Risks and uncertainties are part of life's great adventure -- accident,

illness, theft, natural disaster - they're all built into the working of the Universe,
waiting to happen.

Role 1: Life insurance as "investment" insurance.

 While most people recognise the risk hedging and tax saving potential
of insurance, many are not aware of its advantages as an investment option as
well. Insurance products yield more compared to regular investment options,
and this is besides the added incentives (read bonuses) offered by insurers.

You cannot compare an insurance product with other investment

schemes for the simple reason that it offers financial protection from risks,
something that is missing in non-insurance products. In fact, the premium you
pay for an insurance policy is an investment against risk.

Thus, before comparing with other schemes, you must accept that a
part of the total amount invested in life insurance goes towards providing for the
risk cover, while the rest is used for savings. In life insurance, unlike non-life
products, you get maturity benefits on survival at the end of the term.

In other words, if you take a life insurance policy for 20 years and
survive the term, the amount invested as premium in the policy will come back
to you with added returns. In the unfortunate event of death within the tenure of
the policy, the family of the deceased will receive the sum assured. Thus,
insurance is a unique investment avenue that delivers sound returns in addition
to protection.
Role 2: Life insurance as "Risk cover".

First and foremost, insurance is about risk cover and protection -

financial protection, to be more precise - to help outlast life's unpredictable
losses. Designed to safeguard against losses suffered on account of an
unforeseen event like death, insurance provides you with that unique sense of
security that no other form of investment provides.

By buying life insurance, you buy peace of mind and are prepared to
face any financial demand that would hit the family in case of an untimely
demise. To provide such protection, insurance firms collect contributions from
many people who face the same risk.

A loss claim is paid out of the total premium collected by the insurance
companies, who act as trustees to the monies. Insurance also provides a
safeguard in the case of accidents or a drop in income after retirement. An
accident or disability can be devastating, and an insurance policy can lend
timely support to the family in such times also.

It also comes as a great help when you retire, in case no untoward

incident happens during the term of the policy. With the entry of private sector
players in insurance, you have a wide range of products and services to choose
from. Further, many of these can be further customised to fit individual/group
specific needs. Considering the amount you have to pay now, it's worth buying
some extra sleep.
Role 3: Life insurance as "Tax planning".

Insurance serves as an excellent tax saving mechanism too. The Government of

India has offered tax incentives to life insurance products in order to facilitate
the flow of funds into productive assets.
Buying a life insurance plan entitles you tax benefits on:

Your premiums under Section 80C.

Maturity or death claim proceeds under Section 10 (10D).

Tax benefits under the policy will be as per the prevailing income tax laws and
are subject to change in the tax laws. You are advised to consult your tax adviser
for details.