Cardholders alert: Kotak Mahindra Bank tweaks insurance benefits from its debit cards; check key details

Kotak Mahindra Bank has announced the impending removal of several insurance benefits associated with its debit cards. This change will significantly affect the bank's cardholders, as they will lose access to notable protections, including personal accident cover, purchase protection, and lost baggage coverage. These benefits have been a critical safety net for many users during unexpected incidents related to travel and purchases. All insurance claims submitted before July 20, 2025, will continue to be processed as per the current procedure.

With the Kotak Mahindra Debit Card, account holders are protected in case of accidental death. This policy offers financial support to the beneficiary or legal heir of the cardholder in the event of death caused by an accident. The amount of cover provided is fixed according to the card variant held by the customer, with a maximum coverage of up to Rs. 15 lakhs for accidental death due to rail or road accidents. To maintain this coverage, the cardholder must meet specific eligibility requirements.

Additionally, Kotak Mahindra Debit Card holders can benefit from Air Accident insurance (up to Rs. 5 lakh) and Lost Card Liability (up to Rs. 6 lakh), depending on the card variant they hold. It is important to be aware of the terms and conditions that come into effect when making an insurance claim against the debit card.

Besides, lost baggage insurance was available, offering up to Rs. 1 lakh in the event of baggage loss during travel, provided the travel tickets were purchased using the Kotak Mahindra debit card. Purchase protection also covered the loss of goods within 60 days of purchase, up to a limit of Rs. 1.5 lakh, contingent upon the type of debit card used.

These insurance benefits were subject to specific terms and conditions, which cardholders could review on the bank's website prior to filing any insurance claims. With the withdrawal of these benefits, customers are advised to examine their current coverage terms and explore alternative options if necessary.

The banking industry has seen insurance benefits on debit cards become a standard offering to enhance customer loyalty and differentiation among competitors. Kotak Mahindra's decision to eliminate these benefits comes as a notable shift, particularly when many banks leverage such features to attract and retain clients. While competitors may continue to provide extensive coverage options, Kotak Mahindra Bank’s withdrawal could impact customer perceptions and satisfaction as these protections are removed.

Credit card terms

Starting June 1, 2025, Kotak Mahindra Bank will implement a revised Cardholder Agreement that brings significant changes to interest charges, fee structures, minimum amount due (MAD) calculations, and rewards programmes. 

One of the major updates is the increase in monthly finance charges on most credit cards—from the current 3.50% (42% annualised) to 3.75% (45% annualised). However, premium cards such as Kotak White Reserve and Kotak Solitaire will continue to retain their existing interest rates.