How to Set Up a Kotak Safe Investment Plan

A Kotak Safe Investment plan is similar to an annuity. It is an insurance plan in which your money is invested in various financial markets and your earnings build as the market rises. It provides a sense of security to those who are cautious with their retirement accounts, since the account is guaranteed to stay above an assured sum.

Instructions

Difficulty: Moderately Easy

Set up a Kotak Safe Investment Plan

1. Ask your insurance specialist if the Kotak Safe Investment Plan is available to add to your investment portfolio. This is a foreign company and may not be available worldwide.
2. Choose from four types of funds in which to invest your money.
3. Select a money-market fund, which usually consist of certificates of deposit, government securities, short-term deposits, treasury bills and bonds.
4. Opt for a gift fund that includes government securities and infrastructure-debt assets.
5. Decide on a balanced fund if government securities, corporate debt, Indian-equity shares and short-term investments interest you.
6. Go for the growth fund if you believe that equity and equity-related investments, infrastructure assets and government securities are your best bet.
7. Do not forget to have a beneficiary in mind when you set up your plan. In the event of your untimely passing, your family member or other designated person will receive a death-benefit payment of the money due to you.
8. Track your Kotak Safe Investment Plan online anytime you desire and keep track of your savings on the Kotak Insurance website (see Resources below).

Tips & Warnings

• You still have flexibility after setting up your plan. You can trade between the various types of funds at will, but you will have to pay selling and buying fees associated with liquidating the individual funds and purchasing new ones.
• Consider a loan. After 3 years, you can take a loan out on your account without penalty.
• In the event that you are unable to meet your payment obligations after 3 years, your policy will remain in effect. The company will sell sufficient shares of your investment to pay your premium for that period.
• Plan for the future. You can discontinue the plan after 3 years and receive the market value of the policy, minus a 2.5-percent surrender charge.
• You cannot access your money for the first 3 years, so plan carefully before you set up a Kotak Safe Investment Plan.
• There are certain administrative costs when you set up this type of savings instrument. Be knowledgeable about these costs, as they are deducted from your premium payments.