Kotak Mahindra E-Term Plan Review

Kotak Mahindra Life Insurance Company Limited, a wholly owned subsidiary of Kotak Mahindra Bank, has been a key player in India’s life insurance space since 2001. As of the latest data, the company manages over ₹83,000 crore in Assets Under Management (AUM) and serves a customer base of 46 million across the country. With a nationwide presence of over 250 branches, a strong distribution force of 1 lakh+ agents, and a team of more than 10,000 employees, Kotak Life offers a wide suite of insurance products — including term, savings, investment, retirement, and annuity plans. Its consistent growth is driven by innovation, financial strength, and a sharp focus on customer-centric solutions.

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Overview

This blog breaks down the Kotak E-Term Plan by Kotak Mahindra Life Insurance — a mid-tier term insurance policy with solid basics but no standout features. We cover its claim track record, pricing, rider options, and unique features like step-up/step-down benefits. You’ll also find a clear list of pros and cons, who it’s best suited for, and why it might not be the top pick in a competitive market.

Kotak E-Term Plan from Kotak Mahindra

Kotak Mahindra Life Insurance offers a range of protection-focused products, and among them is its term insurance plan, E-term Plan, which is designed purely for financial security. This is a non-linked, non-participating pure risk premium product that provides a lump sum payout to the nominee in case of the policyholder’s death during the policy term. It offers high life cover at relatively low premiums, with additional benefits for non-smokers and women, who enjoy preferential rates. While the core focus is on death benefit protection, the plan also allows policyholders to enhance coverage through optional riders for accidental death, critical illness, and disability, offering added layers of financial security for families.

Features of the Kotak E-Term Plan from Kotak Mahindra

Should You Buy the Kotak E-Term Plan from Kotak Mahindra

Kotak as an Insurer: 

Kotak Mahindra Life Insurance has maintained a solid presence in the term insurance space, with performance metrics that reflect stability and consistency. Between 2021 and 2024, the company recorded an average Claim Settlement Ratio (CSR) of 98.59%, marginally above the industry average of 98.13%, indicating reliability in settling claims. Its Amount Settlement Ratio stands at 94.7%, again slightly ahead of the industry’s 94.17%, suggesting that the claim amounts paid generally align with client expectations. On the financial health front, Kotak Life reported an average Solvency Ratio of 2.7 from 2021-2024, comfortably above the 2.3 industry average, pointing to a strong ability to meet future claim payout obligations.

Where the insurer does particularly well is in its service experience, with a low median complaint volume of 6.7 per 10,000 claims from 2021-2024, compared to the industry median of 15. However, its average total business volume (₹7,489 crore) and claim payouts (₹414 crore) from 2021-2024 remain lower than many larger players, which may reflect a more focused or selective market presence. Overall, Kotak Mahindra Life offers dependable claim performance and financial resilience, though it operates at a smaller scale than some of its peers in the life insurance industry.

In-Built Features

Kotak E-Term Plan

Coverage OptionsKotak e-Term Plan offers flexible coverage starting from ₹25 lakhs and going up to several crores, making it suitable for both basic protection and high-value security needs.

Plan Variants You can choose from three plan options based on your protection needs:

• Life Option: Offers a basic death benefit to the nominee.
• Life Plus Option: Includes an additional accidental death benefit (capped at ₹1 crore) to be paid along with the basic death benefit, in cases of accidental deaths.
• Life Secure Option: Offers waiver of all future premiums if the policyholder suffers total and permanent disability (TPD), while the basic life cover continues.

Payout FlexibilityThe plan provides three payout modes to customise how your family receives the claim:

If the life insured passes away, the nominee can choose how they want to receive the money (Sum Assured):

• Immediate Payout: The entire sum assured is paid at once. The policy ends after the payment.
• Level Recurring Payout: 10% of the Sum Assured is paid immediately at the time of death. Then, 6% of the Sum Assured is paid every year for 15 years. These payments start one year after the death. You can choose to get this yearly or as monthly installments (monthly = 8.22% of the annual amount).
• Increasing Recurring Payout: 10% of the Sum Assured is paid immediately at the time of death. 6% of the Sum Assured is paid at the end of the 1st year after death. Then the payout increases by 10% of the original amount every year for the next 14 years.

Example: Year 1 = 6%, Year 2 = 6.6%, Year 3 = 7.2%, and so on.

Total payments go on for 15 years.

Important Note: This lump sum will be slightly lower because it’s paid all at once instead of spread over 15 years. If the policy has an Accidental Death Benefit, that amount is always paid as a lump sum, no matter which payout option is chosen.

Premium Benefits: The plan offers economical premiums, particularly for non-tobacco users and women, who are eligible for discounted rates — making long-term coverage more accessible for lower-risk individuals.

Coverage Adjustment Features

• Step-Up Option: This option allows you to increase your life cover (Basic Sum Assured) at key life events without medical tests. It is available only under Regular Premium Paying policies (not online purchases) and must be opted for at the time of buying the policy. You can exercise this option up to the age of 45 during the following events: 
• Marriage (first marriage after policy starts): Up to 50% increase
• First house purchase (in India): Up to 50%, limited to the loan amount
• Birth or legal adoption of a child: Up to 25% per child
• On the 1st, 3rd, and 5th policy anniversaries: Up to 25% each time

You must use this option within 1 year of the event, and the total increase allowed is capped at 300% of your original Basic Sum Assured. This option only increases the base cover (not riders like Accidental Death Benefit), and the payout will follow your originally selected payout option (e.g., lump sum or recurring). Once exercised, your premium will go up, based on your age at the time. To keep this option active, you pay a small annual fee from the start of the policy:

Policy Term Annual Fee (% of Basic Premium):

• Up to 15 years, 3%
• Above 15 years, 5%

This fee is charged until age 45 or the end of the policy term, whichever is earlier. Any increase in cover becomes effective from the next policy anniversary.

• Step-Down Option: The Step-Down Option allows you to reduce your life cover if your responsibilities or financial needs decrease. It is available only under Regular Premium Paying policies and comes with the following rules:

You can reduce your cover once during the policy term, and it will be effective from the next premium due date.

Your premium will be recalculated based on the new (reduced) Sum Assured, your age at entry, and the original policy term. A ₹500 fee is charged to use this option.However, you can use this option only if:

• The Step-Up Option was never selected, or
• The Step-Up Option was selected but never used.

If reducing the cover brings it below the value of riders (like Accidental Death Benefit), those rider benefits will also reduce accordingly.

Add-Ons/Riders

Permanent Disability Benefit RiderThis optional rider ensures continued financial support if you suffer from total and permanent disability due to an accident. It pays out 120% of the rider's sum assured over a period of five years, giving your family a stable income stream while you recover or adapt to a new normal. However, if you've opted for the Life Secure plan, you won’t be eligible to opt for this rider.

Critical Illness Plus Benefit Rider A critical illness can derail both your health and your finances. This rider cushions the blow by paying a lump-sum amount on the first diagnosis of any one of 37 covered illnesses — including cancer, stroke, heart attack, and kidney failure. It helps you manage expensive treatments or replace lost income, offering peace of mind when you need it most.

Accidental Death Benefit Rider (Life Plus Option)Included with the Life Plus plan, this built-in benefit pays an additional lump sum (up to ₹1 crore) if the insured dies due to an accident. It acts as an extra layer of protection for families dealing with sudden loss, helping them manage expenses and maintain their financial stability during a difficult time.

Ditto’s Take: We usually don’t recommend the Accidental Death Benefit Rider. Why? Because term insurance already covers all kinds of death, including accidents. This rider just duplicates that coverage with a capped payout, which isn’t always worth the extra cost. You’re better off increasing your base sum assured instead.

Waiver of Premium on Disability (Life Secure Option) 

If you're diagnosed with a permanent and total disability, this built-in benefit under the Life Secure plan waives all future premiums, while keeping your life insurance coverage active. It ensures your policy continues without any financial burden on your family, even when you're unable to earn an income.

Pros and Cons of Kotak E-Term Plan

Pros of Kotak E-Term Plan:

• High average claim settlement ratio of 98.59% over FY 2021–2024, indicating consistent claim servicing performance
• High amount settlement ratio of 94.7% (2021–2024), showcasing Kotak’s ability to honor large-value claims
• Strong solvency ratio of 2.7, well above the IRDAI-mandated minimum of 1.5, ensuring financial stability
• Low complaint volume of 6.7 per 10,000 claims, reflecting high customer satisfaction and efficient grievance handling

Cons of Kotak E-Term Plan:

• Lower market share compared to some top private insurers.
• No terminal illness benefit, which is now a common feature in many term plans.
• Waiver of premium not available on diagnosis of critical illness — a missed opportunity for added protection.
• Lacks innovative features like cover continuance benefit or instant claim payout, which competitors like Axis Max and Bajaj Term Plan offer.
• Some benefits and riders may not be live on the online channel, reducing options for comprehensive protection.      

Base Premium Comparison of Kotak e-Term

Note: This includes online and salaried discounts. No rider options have been added. These figures are indicative and subject to periodic revision.

Discounts in the Kotak E-Term Plan from Kotak Mahindra

Kotak Mahindra Life offers exclusive discounts on the Kotak e-Term Plan to make your premium more affordable, especially in the first policy year. Here’s a quick breakdown:

1. Discount for Salaried Customers – 5% (1st Policy Year Only) If you're a salaried individual, you’ll receive an additional 5% discount on your premium in the first policy year. This discount also applies to the Step Up Option Fee, which is calculated as a percentage of the base premium.
2. Discount for Existing Kotak Customers & Affiliates – 5% (1st Policy Year Only) Suppose you’re already covered under a Kotak Life Insurance policy, a member of a group plan, or an employee of the Kotak Group. In that case, you’re eligible for a 5% discount in the first policy year. This also applies to the Step Up Option Fee.
3. Online Discount of 3%If you purchase the policy through Kotak’s online channel, you get a 3% discount on the premium. This is a small but handy way to save money by buying directly.

Note: If the life insured qualifies under both categories (salaried + existing customer/employee), only one discount will be applicable — they’re not cumulative.

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Conclusion

The Kotak E-Term Plan is like that steady, no-drama friend — reliable, consistent, but not someone who will wow you at a party. It covers the basics well: strong claim performance, clean complaint record, decent pricing, and some flexibility through step-up/step-down features. But this one doesn't stand out in a crowded market with more innovative, benefit-rich term plans.

Kotak's E-Term does the job if you want a fuss-free, straightforward policy from a stable insurer. Compare it against more feature-packed options before you hit ‘buy’ — especially if you're looking for better riders, more flexibility, or higher long-term value.