Headstart Assure Wealth Brochure

Kotak Headstart Assure Wealth

Bring alive your child’s dreams. Start preparing.

Zindagi se ek kadam aagey

At a glance - Benefits to the child

On maturity - Fund value will be paid

For 5 years after maturity Withdraw any amount on maturity for your children The balance, if any, can be taken in pre-specified installments - yearly, half-yearly, quarterly or monthly Convenience of ATM to access the proceeds, if Kotak Bank account opted for

On death of life insured, or the latter of both lives insured, if joint life option selected (parent, grandparent or legal guardian)

Higher of sum assured or Fund value payable as a lump sum

To boost protection, you have a choice of riders (additional premiums levied)

Portion of sum assured (max 75%) payable on admission of a claim on a critical illness, through our Critical Illness Benefit Installments on admission of a claim on becoming disabled, through our Permanent Disability Benefit Lump sum benefit paid on accidental death, through our Accidental Death Benefit

The table above gives you a snapshot of the benefits. The ones that are available with the plan are marked as and the benefits that are optional are marked as For details on riders, please refer to the rider brochure.

Zindagi se ek kadam aagey

KOTAK HEADSTART ASSURE WEALTH Bring alive your child’s dreams. Start preparing. Every child is different. Each has their own set of dreams and aspirations. As a parent, you would like to provide your child with all the building blocks that could develop his or her potential to the fullest. This could mean extra coaching or tuition for talented children, special training or equipment for natural athletes or professional training for born singers. Today nothing is certain and you have to be prepared. Introducing Kotak’s Headstart Assure Wealth - a specially tailored, cost effective plan that aims to give your child the financial means to pursue his or her dreams - and to live them.

Note In this policy, the investment risk is always borne by the policyholder.

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How does this plan benefit my children? Protection and growth of child’s investment The plan provides cover in case of demise of the parent (life insured). The standard sum assured (life cover) on the parent will be the higher of (5 x Total Annual Premium) and (0.5 x Policy Term x Total Annual Premium). In the event of death of the parent, the higher of the sum assured or the fund value would be paid. You can opt for additional booster payments, should accidental death bring on your demise or unfortunate events render you disabled or incapacitated. Should a critical illness unfortunately befall you along the way, a portion of the sum assured is immediately made available. These benefits will be charged for by way of extra premiums.

Investments to maximize wealth & protect capital The costs of fulfilling your children’s dreams, be it education, setting up a business, getting married or paying a deposit on a house, are likely to increase exponentially over a period of 15 or 20 years. To meet these costs, it’s really important that your investment outpaces the cost of living. We call these real returns, because they grow faster than inflation does. Equity exposure in your portfolio is a key driver of real returns in the long run. You have to balance the need to beat the cost of living 10, 15 or 20 years from now, with the shorter term swings the equity market can expose your capital to. However, you may find it difficult to take a view on the markets and may not be in a position to switch your money efficiently from one fund to another to balance both risk and return. Understanding this requirement, we have introduced the unique DYNAMIC FLOOR FUND. This fund is ideally suited to the more risk-averse investor whose priority is capital preservation, but who still wants to participate in actively managed upside market growth. In short, the Dynamic Floor Fund offers embedded advice in a single fund from experts, aiming for stable returns and capital appreciation to comfortably outpace the cost of living. It allows you to invest and forget about the hassles of switching across fund options or depending on the advice of others. This fund benefits you by aiming to: Maximize equity exposure in bull markets, actively trimming it back either to lock in strong returns or limit downside risk in falling markets Shield the savings for your children from the vagaries of market volatility

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For those who would like to manage their portfolio, we’ve provided a choice of fund options that will allow you to balance your risk profile with the tenure of your investment. Your premiums will be invested net of all initial charges. Investment Objective Risk Return Equity Debt Cash & Option Profile Money Market Kotak Aggressive Growth Kotak Dynamic Growth

Kotak Dynamic Balanced

Aims for a high level of capital growth by holding a significant portion in equities. May experience high levels of shorter term volatility (downside risk). Aims for moderate growth by holding a diversified mix of equities and fixed interest instruments. May also be susceptible to moderate levels of shorter-term volatility (downside risk).

Aggressive

Kotak Dynamic Bond Kotak Dynamic Floating Rate Kotak Dynamic Gilt

Kotak Dynamic Money Market

Is likely to out-perform traditional balanced or equity funds during sideways or falling markets and shadow the rising equity markets.

0%40%

0%20%

Moderate

30%60%

20%70%

0%20%

Cautious

0%75%

0%100%

0%20%

0%100%

0%20%

80%100%

0%20%

–

100%

Returns will be in line with those of fixed interest instruments, and may provide little protection against unexpected inflation increases. Will preserve capital and minimize downside risk, with investment in debt and government instruments.

Will protect capital and not have downside risks

0%-40%

40%80%

Aims to provide stable long-term inflation beating growth over the medium to longer term, and defend capital against short-term capital shocks. Kotak Dynamic Floor

60%100%

Conservative

Secure

–

_

In short, you can select over time which funds you would like to be in, based on your time horizon and views on the market. Or you can let us manage the risk more actively on your behalf, by investing in the Dynamic Floor Fund.

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Some suggestions on how you might allocate your savings are illustrated in the chart below: Recommended fund options & allocation

Investment Time Horizon

If your child is below the age of 7, you will probably not require the money for another 15-20 years.

If your child is between the age of 8 and 12, you are likely to save for the next 10-15 years.

If your child is between the age of 13 and 15, you may require the amount within 7-10 years.

75% in Aggressive Growth Fund or Dynamic Growth Fund 25% in Dynamic Growth Fund

50% Dynamic Growth Fund 50% Dynamic Floor Fund

100% in Dynamic Floor Fund

When there are about 2 or 3 years before you actually require the money, it is advisable to gradually switch your money to the debt funds, i.e. Dynamic Bond Fund, Dynamic Floating Rate Fund or the Dynamic Gilt Fund, so that it is safe and accessible.

Money back phase of 5 years after maturity

Your children’s future expenses don’t all come at once. Often there might be a large initial outlay, with extra expense over the ensuing years. On maturity, you will receive the accumulated fund value for the benefit of your children. A portion of this corpus may be utilized to pay for their admission to a premier institute and the balance amount could be used to fund tuition fees during the next 5 years. Or you may choose to support your children’s entrepreneurial initiatives and wedding expenses with the accumulated fund. With this plan, you can also access the investment after completion of the 3rd policy year, with no partial withdrawal or surrender charges from year 7 onwards. Alternatively, you can just let the amount multiply if the need is not immediate. You can also elect to receive a percentage of the maturity proceeds in cash and the balance by way of pre-specified installments, for up to 5 years after maturity.

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Additional features to enhance flexibility

To allow your investment plan to keep pace with the changing times and varying needs of your child, there are benefits that you could use. Other Benefits Details Saving for 2 children

Hassle-free, cost effective saving through a single plan for one or two children.

Joint life option available^ (Primary & Joint Life Insured)

Both parents can be covered where death benefit is paid on the second death. This helps minimize your mortality cost.

Survival units

Enjoy additional unit allocation for long-term investment for your child.

Boost the accumulation amount at maturity for your children, where you may already have insurance to cover them along the way.

Extra units of 1%, 1.5% and 2% of the fund will be allocated at the end of policy year 10, 15 and 20 respectively, provided all premiums are paid up to date and the policy has not yet reached maturity. Top-up premiums#

Increase investments for your child’s future if you have surplus money. Invest up to 25% of the cumulative premiums paid up to that date.

Flexible premiums

At each policy anniversary, you can reduce your basic premium payment to the minimum amount if affordability becomes an issue. The Top-up facility falls away though. May thereafter increase* your basic premiums at any policy anniversary in the future up to the original premium amount. The sum assured is adjusted to ensure the cover is equal to the greater of 5 x Altered Premium and 0.5 x Term x Altered Premium. Available after paying 3 full regular annual premiums.

Partial withdrawals

Available to meet the child’s expenses along the way, from year 4 onwards. Early withdrawal charges fall away at the end of year 7, allowing you flexible access to your money, subject to a minimum fund balance of Rs. 25,000. Withdrawals must be made from the qualifying Top-up Accounts first.

Switching

You may switch or change the fund options to maximize returns from the market.

Automatic cover maintenance

In case you miss your premium payment, this facility will ensure that whilst you have adequate funds in the policy, your insurance cover remains in force. This facility is available after payment of premiums for 3 completed policy years. All rider benefits fall away. The policy will terminate if it is not revived or the policyholder does not elect to retain the policy in ACM mode post the revival period.

Convenient premium payment modes

Pay your premiums annually, half-yearly, quarterly or monthly (through direct debit only).

^

The policyholder must be the primary life insured.

#

These will be invested in separate Top-up Accounts, each with a lock-in of 3 years from the date of Top-up, except during the last 3 policy years.



*

May require underwriting.

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Tax benefit: Section 80C and Section 10 (10D) of Income Tax Act, 1961 would apply. Premiums paid for Critical Illness Benefit qualify for a deduction under Section 80D. You are advised to consult your tax advisor for details.

How do I apply for this plan? Step 1: Decide the amount you will save regularly to secure your child’s future, i.e. the Regular Annual Premium. Step 2: Decide the term of the policy depending on goals for your child (higher education, marriage, etc.) that you have in mind. Step 3: Select your fund options. Step 4: Choose the optional benefits.

For a snapshot of the benefits, please refer to the table on the inside cover.

Eligibility Entry Age

Min – 18 years Max – 60 years

Term

Min – 10 years or 18 minus the younger child’s current

Limited Premium Payment Term

age, whichever is greater 3 – 10 years

Maturity Age

Max – 70 years (older policyholder) Min – 18 years (younger beneficiary)

Regular Annual Premium

Min – Rs.15,000

Limited Premium Payment

Min – Rs. 25,000 p.a. for payment term of 4 – 10 years Min – Rs. 50,000 p.a. for payment term of 3 years

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Charges

Premium allocation charge

There is an initial advice and distribution charge related to policy issue that is a percentage of the premium received. The net premium % invested is as per the following table: POLICY TERM LESS THAN 15 YEARS

POLICY TERM OF 15 YEARS & ABOVE

Annual

Annual

Premium (Rs.)

15,000 to 25,000

25,001 to 1,50,000

Above 1,50,000

Premium (Rs.)

Year 1

68%

72%

80.50%

Year 2

86%

91%

93%

Year 2

Year 3

93%

95%

96%

Year 3

Year 4-10

99%

99%

99%

Year 4-10

Year 11 onwards

100%

100%

100%

Year 11 onwards

15,000 to 25,000

Year 1

64%

25,001 to 1,50,000

Above 1,50,000

68.5%

79%

86%

91%

93%

93%

95%

96%

99%

99%

99%

100%

100%

100%

For Top-up premiums, the allocation will be 99%.



Fund management charge

The annual fund management charge is a percentage of the fund value and is towards managing your money efficiently to earn you handsome returns. The charge varies depending on the fund and currently are – Dynamic Money Market Fund – 0.6%, Dynamic Gilt Fund - 1.0%, Dynamic Floating Rate Fund – 1.2%, Dynamic Bond Fund– 1.2%, Dynamic Balanced Fund - 1.3%, Dynamic Floor Fund – 1.75%, Dynamic Growth Fund - 1.5% and Aggressive Growth Fund – 1.6%. The names of the funds offered under this contract do not in any way indicate the quality of these funds, their future prospects and returns.



Administration charge

For annual premiums below Rs. 1 lakh, a flat fee of Rs. 75 per month is charged in year 1 and Rs. 40 per month from year 2 onwards is recovered by liquidation of units (reduced to Rs. 30 for policies made paid-up prior to maturity). There is no administration charge for annual premiums of Rs. 1 lakh and above.



Switching charge

The first four switches in a year are free. Rs. 500 will be charged for every additional switch.

Full surrender / Partial withdrawal charge

There is no surrender / partial withdrawal allowed in the first 3 policy years. Thereafter, the surrender charge (expressed as a % of fund value) / partial withdrawal charge (expressed as a % of amount

His dream come true

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withdrawn) is 3% in year 4, 2% in year 5, 1% in year 6, 0% from year 7 onwards. No surrender / partial withdrawal charges apply to the Top-up Accounts. For the third and subsequent partial withdrawals from the Main Account in any policy year, an additional Rs. 500 per withdrawal will be charged.



Mortality charge

This is the cost of life cover and will be levied by cancellation of units on a monthly basis.



Rider charge

In return for providing the additional booster benefits (“riders”), the respective charges will be recovered by cancellation of units on a monthly basis. Please note, in the event of experience being worse than expected, the Company reserves its right to impose charges not beyond the level mentioned below:

The administration charges will not be increased from their initial level by more than 5% per annum.



The fund management charges will not be increased from their initial level by more than 40%.



The switching and withdrawal charges may be increased to a maximum of Rs.1,000.



Any increase in charges will only be made after clearance by the Insurance and Regulatory Development Authority.

Other terms

Loans



No loan facility.



Lapses



Where the premiums for the first 3 policy years are not paid within the grace period, the policy together with the rider benefits shall lapse from the due date of unpaid premiums.



A lapsed policy can be revived within 2 years of the date of lapse by payment of arrears of premiums and a revival charge of Rs. 500.



Policy revivals



The policy may be revived within 2 years from the date of the first unpaid premium by making payment of the arrears of premiums and a revival charge of Rs. 500. Any revivals after six months from the due date of unpaid premium will require production of evidence of good health.

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About us Kotak Life Insurance is a joint venture between Old Mutual plc. and Kotak Mahindra. Old Mutual plc. is a London-listed Fortune 500 international financial services group focusing on asset gathering and asset management. On 31st December 2005, Old Mutual plc. had more than 7 million life assurance policies, 3.6 million banking customers and over 550,000 general insurance policies. Its funds under management exceeded $310 billion. The Group has a substantial presence in the UK, US and South African markets. It further expanded its European presence through the acquisition of Skandia in early 2006. Established in 1984, the Kotak Mahindra group has long been one of India’s most reputed financial organizations. Kotak Mahindra today is one of India’s leading financial institutions, offering complete financial solutions that encompass every sphere of life. The Group has net worth of over Rs. 2,900 crore, employs around 8,800 people in its various businesses and has a distribution network of branches, franchisees, representative offices and satellite offices across 282 cities and towns in India and offices in New York, London, Dubai and Mauritius. The Group services over 1.6 million customer accounts. For our customers, this joint venture translates into a company that combines international expertise in insurance, advice and fund management with an understanding of the local market.

Risk factors • Unit Linked Life Insurance products are different from the traditional insurance products and are subject to the risk factors. • The premium paid in Unit Linked Life Insurance policies are subject to investment risks associated with capital markets and the NAVs of the units may go up or down based on the performance of fund and factors influencing the capital market and the insured is responsible for his / her decisions. • Kotak Mahindra Old Mutual Life Insurance Ltd is only the name of the Insurance Company and Headstart Future Protect is only the name of the unit linked life insurance contract and does not in any way indicate the quality of the contract, its future prospects or returns. The various funds offered under this contract are the names of the funds and do not in any way indicate the quality of these plans, their future prospects and returns. Please know the associated risks and the applicable charges from your Insurance agent or the Intermediary or policy document of the insurer. General exclusion In case the life insured commits suicide during the first year of the plan, the beneficiary would receive the prevailing fund value in the Main and Top-up Account. Prohibition of rebates Section 41 of the Insurance Act, 1938 states: No person shall allow or offer to allow, either directly or indirectly, as an inducement to any person to take out or renew or continue an insurance in respect of any kind of risk relating to lives or property in India, any rebate of the whole or part of the commission payable or any rebate of the premium shown on the policy, nor shall any person taking out or renewing or continuing a policy accept any rebate, except such rebate as may be allowed in accordance with the published prospectuses or tables of the insurer. Any person making default in complying with the provision of this section shall be punishable with fine, which may extend to Rs. 500.

Contact Details Anand 656801/03/05/07 Ahmedabad • Ellisbridge 66315000-04 • Satellite 66061637

Chennai • Ceebros Centre 42101122 • Teynapet 42000100 Cochin 2377611-14 Coimbatore 6502211-16

Bangalore •Rajaji Nagar 66628050-54 •Residency Road 66188365-71

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Bharuch 645247 Bhavnagar 6451057-58 Bhopal 4008800-05 Chandigarh 5076451-54

Indore 4027181-85 Jaipur 2371627-30 Jamnagar 6545902-04

Aurangabad 6610251-75

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• Secunderabad 66205000

Jamshedpur 6450993 Jodhpur 2632901/02 Jorhat 2309073/74 Kanpur 2331211-15

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Karnal 2268671/73

Gurgaon 4025000-30

Kolhapur 6685000

Guwahati 2340672-75

Kolkata •15 Park Street 22093000 • Chowringhee Road 22881799

Hyderabad •Begumpet 23412929/39

• Gariahat Road 24617711 •Kakurgachi 23648606-09 Lucknow 2625770/59 Ludhiana 5089643-47 Mumbai •Andheri 66765000 •Borivali 64510882/90 • Chembur 67995000 • Churchgate 66541000 • Lower Parel 66635353

Pune • Aundh 30284315-22 • Sasoon Road 56055073 Rajkot 6625000 Surat • Adajan 6555550 • Dumas Road 6589200-03 Thane 67925000 Tinsukhia 2336037/56-58 Trichy 4002010/55/66

Nadiad 2561042

Valsad 645822/23

Nagpur 2525848

Vapi 6545821/22

Nashik 6605005

Vashi 67905003

Palanpur 261184

Customer Contact Center

6050 5000

•

Toll Free 1800-22-8081

•

SMS KLIFE to 676788

Form No: HFP01 Kotak Mahindra Old Mutual Life Insurance Ltd. Regn. No.: 107 Regd. Office: 6th Floor, Peninsula Chambers, Peninsula Corporate Park, Ganpatrao Kadam Marg, Lower Parel (W), Mumbai - 400 013. Website: www.kotaklifeinsurance.com Email: [email protected] This product leaflet gives only the salient features of the plan. For detailed terms and conditions, please refer to the specific policy document.