Kotak Easy Growth Plan (KEGP), which is targeted at high and middle- income segments, combines benefits of insurance and investment in a highly cost effective manner. The plan offers four investment options: Money Market Fund, Bond Fund, Balanced Fund and Growth Fund. Depending on the risk-return appetite an investor can allocate his money in one / any combination of funds. In addition, the investor can switch between the funds any time during the term.

KEGP offers two options for life cover. Under the high cover option, the customer gets an insurance cover of 5 times the single premium paid in the event of death, while in the low cover option, the amount is 1.02 times. KEGP also offers a high amount of liquidity, as the policyholder is not required to decide on the policy term, at the time of taking the plan. He can withdraw from the plan anytime after the first year, without any charge. With a view to offering greater flexibility, the plan offers consumers an option to inject lump sum amounts over and above the single premium as and when they want. The plan allows withdrawals in parts at anytime after the completion of first policy year.

KEGP is a whole life plan, wherein the cover continues till the age of 100. The plan also offers a loan facility. Another interesting feature is that for the 1.02 times cover option, no medical test will be required. The 5 times cover option also offers three riders: Accidental Death, Permanent Disability and Critical Illness.

Commenting on the launch, Shivaji Dam, MD, OM Kotak Mahindra Life Insurance said, "In the long run return from equity is expected to outperform returns from other asset classes. Interest rates on fixed return instruments have declined. We are currently in low inflation environment. Real interest rate is barely 2%. For capital formation, investors will have to look at equity in their portfolio. Kotak Easy Growth Plan has been designed keeping this principle in mind. We have kept the product features simple and the costs competitive."

According to Mr Rathin Lahiri, VP Marketing, OM Kotak Mahindra, "The most attractive thing about Kotak Easy Growth Plan is the convenience and simplicity it offers. Transparency in costs and our investment record will go a long way in convincing the customer in making the investment decision."

Another feature worth noting is the low cost structure. The plan has an initial charge of only 2.5%. The fund management charge and the buy-sell spread are also on the lower side. In the Growth Fund (which has an 80% equity exposure), the company charges a fund management charge of 1.5% and a buy sell spread of 0.43% only. The administration charge is Rs30 per month irrespective of the policy size.

Due to the attractive features of the plan, Life Advisors across the country have shown great enthusiasm in the product. The product is in the process of being rolled out nationally.