Premium Expense Charges

Premium Expense Charges in Indexed Universal Life (IUL) insurance are fees subtracted by the insurer from the policyholder's premiums before allocation to the policy's cash value. Aspects to note:

• Purpose of Charges: Cover costs of underwriting, issuing, and administering the policy.
• Calculation Basis: Typically a percentage of the paid premium, varying based on policy type, the insured's age, and other factors.

Understanding the Impact:

• Informs Cash Value Contributions: Knowing these charges helps policyholders understand the net amount being directed towards their policy's cash value growth.

Grasping Premium Expense Charges is essential for policyholders to accurately assess their policy's financial progression and cash value accumulation.