Kotak Capital Multipler Plan (Scheme) Review

 

Kotak Capital Multiplier Plan (Scheme) Review

Recently a reader ask me about the Kotak Capital Multipler plan. Weather one should invest in this plan or not?

Well, unfortunately, the insurance companies launch lots of products every other month but their offerings are highly opaque. I mean I have personally gone through this plan features on the Kotak Website.

And they have nowhere mention that which kind of financial product is this?

I mean weather this is a pure insurance plan or pure investment plan or the combination of the both. Kotak people have marketed this scheme as if it is a pure investment scheme.

But well, pure Investment schemes don’t come with any maturity periods and death benefits. And that’s why my conclusion about this plan is that, – It is the sort of ULIP (Unit Linked Insurance Plan). I may be wrong to diagnose this but I am sure that this is not the pure investment product like mutual funds.

But actually this is a investment cum insurance product.

When I come across any Insurance cum investment product, I first of all download its brochure and see the various charges associated with this product.

So I have downloaded the Brochure of Kotak Multiplier plan and I shocked a lot.

I mean they have nowhere mention policy charges like Premium allocation charges, fund management fees and various other kind of charges which are associated with the insurance cum investment products.

I mean it is highly unclear that how much money goes towards buying a life insurance coverage and how much money goes towards investing?

They have mentioned in the death benefit that, on the death of the policy holder, your beneficiary will get 10% of the Basic sum assured plus accumulated corpus in the policy.

I mean they have not mentioned anywhere that how much sum they will assure and they have also not mentioned anywhere that why they will give only 10% of the sum assured?

I mean suppose if I have a life cover of Rs.10 lakhs than in case of my death why my nominee gets only 10% of this cover (Rs.1 lakh) and not the entire sum assured?

They have also not mentioned that in which kind of portfolios (Equity or Debt or Mixed) they will invest your money and in how much proportion?

According to the Brochure, You should invest in this plan because

• If you are looking for an investment plan for your child and want a
  flexible money-back plan that gives you the power to decide the amount and time of withdrawals.
  • If you are planning for your retirement and require a plan that allows you to withdraw any amount as per your need and at the same time
  invest your money prudently to get you bonuses on the balance in your account.
  • If you think that from time to time you will have extra cash, which you would like to invest in an instrument which is safe and which will get you attractive returns.

According to the policy brochure, you should invest in this plan for the investment purpose. They have nowhere mention about insurance while in reality it’s the insurance cum investment product.

My Opinion -

So no need to say that ‘Stay away from This Plan’. Follow the basics of investing.

Insurance + Investment = Bad Combination.

The Best combination is,

Term Insurance + Equity Mutual Funds (3-4) + PPF

For your insurance needs, buy a pure term life insurance policy and for your investment needs invest in 3 or 5 equity diversified mutual funds selected from Valueresearchonline.com and PPF.