Kotak Wealth Optima Calculator

Kotak Wealth Optima Calculator

Kotak Wealth Optima is a Unit Linked Insurance Plan (ULIP) - it bundles a life insurance cover with a market-linked investment fund. What sets it apart from a plain ULIP is a set of built-in wealth-enhancement features: Wealth Boosters credited every five years from the 10th policy year, Loyalty Additions credited every year from the 6th policy year, and an optional Return of Mortality Charges (ROMC) benefit that pays back every mortality charge you were ever charged, as a lump sum at maturity. This calculator projects your fund value at maturity using the two assumed investment return scenarios - 4% p.a. and 8% p.a. - that IRDAI requires every ULIP benefit illustration to show.

How the Fund Value Is Calculated

Each policy year, your premium (while you're still paying it) has a Premium Allocation Charge deducted before the rest is invested. From the invested amount, a Mortality Charge (the cost of the life cover) and a Policy Administration Charge are deducted. What's left is added to your fund, which then grows (or shrinks) at the assumed rate, net of the Fund Management Charge for your chosen fund. From Year 6 onwards a Loyalty Addition is credited, and every 5th year from Year 10 a Wealth Booster is credited:

$$FV_t = \Big[\max\big(FV_{t-1} + P_t - AC_t - MC_t - PAC_t,\ 0\big) \times (1 + r - FMC)\Big] \times (1 + LA_t) + WB_t$$

Where:

• FV_t - fund value at the end of policy year t
• P_t - premium paid in year t (₹0 once the Premium Payment Term ends)
• AC_t - Premium Allocation Charge deducted in year t
• MC_t - Mortality Charge deducted in year t, based on the Sum at Risk (Sum Assured minus current fund value) and your attained age
• PAC_t - Policy Administration Charge deducted in year t
• r - assumed gross investment return for the scenario (4% or 8% p.a.)
• FMC - annual Fund Management Charge rate for the chosen fund
• LA_t - Loyalty Addition rate (0.20% of the fund value), applied from Year 6 onwards
• WB_t - Wealth Booster amount (3% of cumulative premiums paid to date), credited only in Years 10, 15, 20, 25, and 30

Life Cover (Sum Assured)

The Sum Assured is set as a multiple of your Annual Premium, per the IRDAI minimum sum assured norm for regular-premium ULIPs:

$$\text{Sum Assured} = \text{Annual Premium} \times \begin{cases} 10, & \text{Age at Entry} < 50 \\ 7, & \text{Age at Entry} \geq 50 \end{cases}$$

Return of Mortality Charges (ROMC)

If you opt for ROMC, every Mortality Charge deducted across the entire policy term is summed up and added back to the fund value as a lump sum in the maturity year - on top of the Wealth Boosters and Loyalty Additions. This effectively refunds the cost of the life cover you carried, provided the policy runs to full maturity.

Charges Used in This Illustration

Charge	Rate
Premium Allocation Charge	5% in Year 1, 3% in Years 2-5, 0% from Year 6 onwards
Fund Management Charge	1.35% p.a. (Equity), 1.25% p.a. (Balanced), 1.00% p.a. (Debt)
Policy Administration Charge	₹60/month in Year 1, increasing 5% each year, capped at ₹500/month
Mortality Charge	Per ₹1,000 of Sum at Risk, rising with attained age (from ~₹1 at age 25 to ~₹32 at age 75)
Loyalty Addition	0.20% of fund value, credited every year from Year 6 onwards
Wealth Booster	3% of cumulative premiums paid to date, credited every 5th year from Year 10 onwards

These figures are illustrative and modeled on the general shape of Indian ULIP charge structures - they are not a reproduction of Kotak Life's actual current product brochure. Always check the official Benefit Illustration and policy document before buying.

How to Use This Calculator

1. Enter your Age at Entry.
2. Enter the Annual Premium you plan to pay.
3. Choose the Policy Term - how long the policy runs.
4. Choose your Premium Payment Option - pay premiums for the full Policy Term (Regular Pay), or stop paying earlier (Limited Pay) while the cover continues for the full term.
5. Choose a Fund Option based on your risk appetite.
6. Choose whether you want the Return of Mortality Charges (ROMC) option.
7. Submit to see your projected Life Cover, total premiums paid, projected fund value at maturity under both assumed return scenarios, an approximate net yield, and a year-by-year fund value schedule.

Worked Example

A 30-year-old paying an Annual Premium of ₹1,00,000 for a 20-year Policy Term (Regular Pay), invested in the Equity Fund, with ROMC selected:

• Sum Assured: ₹10,00,000 (10x Annual Premium, since entry age is under 50)
• Total Premiums Paid: ₹20,00,000 (₹1,00,000 x 20 years)
• Projected Fund Value @ 4% p.a.: approximately ₹28,05,900
• Projected Fund Value @ 8% p.a.: approximately ₹43,68,300
• Approx. Net Yield @ 8% scenario: about 3.98% p.a. - lower than the 8% assumed gross return because of the allocation, mortality, and fund management charges deducted along the way, partially offset by the Wealth Boosters, Loyalty Additions, and ROMC refund

Important Notes

• This is market-linked, not guaranteed. Unlike a traditional endowment plan, the fund value depends entirely on the actual performance of the underlying fund. The 4% and 8% figures are illustrative assumptions mandated by IRDAI for comparison purposes, not a promise, floor, or ceiling on your actual returns.
• Wealth Boosters and Loyalty Additions are not guaranteed cash bonuses - they are additional units credited to your existing market-linked fund, and so are still subject to market performance afterwards.
• 5-year lock-in. As with all ULIPs in India, withdrawals are not permitted during the first 5 policy years.
• Tax benefits may be available on premiums under Section 80C and on the maturity/death benefit under Section 10(10D) of the Income Tax Act, subject to the conditions in force at the time.
• This calculator is for educational illustration only and does not constitute financial or insurance advice. Refer to the official Kotak Wealth Optima policy document and benefit illustration before making any purchase decision.