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Calculation of yearly additions (in case of Death) in Life Insurance policy

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20 Jul, 2021 by  Karan Sakhuja

I lost my father recently and I applied for a claim (Kotak Life Insurance).

There were 3 components making up the claim amount (that I could understand from their literature and policy wordings):

Basic death benefit : no mismatch in claimant and insurer calculations

Term Rider : no mismatch in claimant and insurer calculations

Guaranteed Yearly addition : ---calculated incorrectly---

Here the mismatch between insurer and my calculations was :

  • my father passed away in April (the 10th month) of policy year 7 (policy tenure is June to June)
  • Guaranteed yearly additions that the insurer is calculating is as per 'end of policy year 6' and not as per 'end of policy year 7 (since that would have ended on paying 8th premium)'
  • Am i eligible to claim the end of policy year 7 amount? or the 10 month pro-rata value?
  • the policy document has no clarity on the term 'end of policy year'

Kindly note: I have already received the major claim amount and only the mismatch amount is what I am trying to understand and contest.


4 Answer


Pl share the date of the start of the policy & the date of death of your father.

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20 Jul, 2021
Self Employed - Digital Consultant

The guaranteed annual bonus is added to the policyholder's fund at the end of a policy year. In your case, I understand that your father passed away 2 months before completion of 7 policy years. If that's correct, your policy is eligible for only 6 years' annual guaranteed additions/bonus.

As requested by Mr Manoj Pandey, please share the policy inception date & date of death of your father. This would help us give you an explicit Yes/No.

My condolences on the passing away of your father.

Asad Akbar

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22 Jul, 2021
Karan Sakhuja

Dear Asad and Manoj sirs, appreciate your help here. As required by you, below are the details:

Plan Name: Kotak Assured Savings Plan(UIN-107N081V01)

Date of Commencement: 20/06/2014

Policy Term: 15 years

Premium Payment Term: 10 years

Date of Death: 15 Apr 2021

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23 Jul, 2021
Chartered Accountant, Personal Finance Advisor

Dear Karen

Condolences to the family on your father's demise.

Thanks for sharing the policy inception dates and date of death. As suggested by Mr. Asad & Mr. Manoj the guaranteed addition would be paid for every completed policy year which is 6 in this case. I believe the insurer has made the correct t calculation of claim amount.

Hope this addresses your concerns

Stay Safe

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