Kotak Mahindra AMC has found a new way to attract investors. The AMC is to offer free life insurance cover to investors purchasing units under Deposit Plan of K Bond by March 31, 2003. To avail of this "extra benefit", investors will have to maintain a minimum investment of Rs 20,000. The three-year insurance benefit extends from the date of purchase of units. This will cover the investor for the value of units held on a day at the applicable NAV, to a maximum of Rs 15 lakh.
Investors will be covered under the Group Term Policy of OM Kotak Mahindra Life Insurance Company Limited (OMKM) and should be between the age of 18 and 45 years. While Kotak Mahindra AMC will bear the insurance premium, it also holds the right to discontinue this benefit by giving a month notice. The benefit also ends on redemption of units. But this free life insurance cover is surely a bonus for investors.
The first fund to offer any sort of insurance cover has been the Unit Linked Insurance Plan of UTI. Other AMCs are offering personal accident insurance cover. Thus, Prudential ICICI AMC in association with the New India Insurance Company Limited offers personal accident insurance cover under the Prudential ICICI Child Care Plan. Similar benefits are also offered under the Magnum Children's Benefit Plan. These policies covers death by accident, permanent total disability sustained due to accident up to Rs three lakh.
If this concept works in getting more inflows in the fund, then we may soon see more AMC's luring investors with such additional benefits.