Premium Allocation Charge:
A percentage of the premium is appropriated towards charges initial and renewal expenses apart from commission expenses before allocating the units under the policy.
Mortality Charges:
These charges taken to provide insurance coverage and depend on number of factors such as age, amount of coverage, state of health etc.
Fund Management Fees:
Fees levied for management of the fund and is deducted before arriving at the NAV.
Administration Charges:
This is the charge for administration of the plan and is levied by cancellation of units. It include service tax.
EX- annual premium is 50000, NAV Rs 10, Co. purchase 5000 units.
Policy admin charge is 1000, NAV is Rs 10 then co. will deduct 100 units
i.e 4900 units are levied by cancellation
Surrender Charges
When policy holder withdraw full or partial fund amount before maturity then some charges are deductible and paid to policy holder.
Fund Switching Charge:
The co. charge from policy holder if he switches the fund from debt to equity or vice versa .Usually a limited number of fund switches are allowed each year without charge, if the limit exceed then insurance co. charge policy holder.
Rider: This is an additional benefit which is provided by the insurer to the insured in case of death, charging 5% extra from the premium amt.It covers both Normal & Accidental death.
Service Tax Deductions:
Service tax is deducted from the risk portion of the premium.
For more information visit ulip article
