Kotak Life's ₹2 crore term plan taps rising demand for higher cover

Kotak Mahindra Bank's life insurance arm, Kotak Life, is seeing stronger demand for its ₹2 crore term insurance product, a shift that reflects deeper changes in household financial obligations. The company reported a 99.5% claim settlement ratio for the fiscal year ended March 2026, a solvency ratio of 2.21, and an industry-second net promoter score of 60, according to the insurer's latest disclosures.

The trend toward larger coverage amounts is tied to bigger home loans, higher education costs, and longer retirement funding needs in urban India. A family that depends on a primary earner's future income now faces liabilities that can easily exceed ₹2 crore when discounted over a working lifetime. Kotak Life's product is aimed at professionals in their thirties and early forties who want to lock in lower premiums before financial responsibilities peak, the company said.

For Kotak Mahindra Bank, the life insurance unit is a key profit driver. In the December quarter, Kotak Life's new business premium grew 22% year on year, outpacing the industry average of 15%, according to IRDAI data. The ₹2 crore plan contributes to that growth by attracting higher-ticket customers who might otherwise underinsure or buy from a competitor. Kotak Life's 99.5% claim payout ratio strengthens its pitch: a high settlement rate reduces the risk that a family will face a contested claim at the worst possible time.

The company's solvency ratio of 2.21, well above the regulatory minimum of 1.5, gives it room to underwrite more business without raising fresh capital. Kotak Life settles select claims within one day, a feature that differentiates it from peers where average payout times run 7–15 days. Quick settlement matters for a ₹2 crore payout because dependents often need cash immediately to cover funeral costs, loan EMIs, or living expenses while other assets are reorganised, the insurer said.