Monthly Expense Charge (PER 1,000)

The Monthly Expense Charge in the context of insurance policies, such as Indexed Universal Life (IUL) policies, is a key financial component. It involves:

• Regular Deduction: A fee subtracted from the policy's cash value each month.
• Purpose: Covers the insurer's administrative expenses.

Calculation and Implications:

• Charge Rate: Typically quantified per $1,000 of the policy's face value.
• Example Calculation: With a rate of $0.50 per $1,000 on a policy with a $100,000 face amount, the charge would be $50 monthly.
• Coverage of Costs: Helps the insurer offset underwriting, issuance, and policy management costs.

Understanding the Monthly Expense Charge is vital for policyholders to grasp the financial mechanics of their insurance policy and its impact on the policy's cash value.