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Glossary of Charges New

This document defines various charges associated with insurance policies, including: 1. A premium allocation charge levied as a percentage of premiums paid and used to allocate units to the policyholder's account. 2. A fund management charge levied as a percentage of the net asset value to cover investment fund expenses. 3. A policy administration charge expressed as a fixed amount or percentage of premiums to cover policy expenses. 4. A mortality charge levied based on the sum assured to provide the life insurance benefit.

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45 views1 page

Glossary of Charges New

This document defines various charges associated with insurance policies, including: 1. A premium allocation charge levied as a percentage of premiums paid and used to allocate units to the policyholder's account. 2. A fund management charge levied as a percentage of the net asset value to cover investment fund expenses. 3. A policy administration charge expressed as a fixed amount or percentage of premiums to cover policy expenses. 4. A mortality charge levied based on the sum assured to provide the life insurance benefit.

Uploaded by

manmamsat
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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GLOSSARY OF CHARGES

1. Premium Allocation Charge


This is a charge levied as a percentage of premium, when premium is actually paid. This charge may vary by size of premium, policy
year in which premium is due for payment and type of premium; whether it is regular premium or top up premium. The balance of
premium (net of premium allocation charge) is used to allocate units in policyholder’s unit account.
2. Fund Management Charge
This is a charge levied as percentage of net asset value on each investment fund and is adjusted in the unit price of the respective
investment fund when unit price is calculated. This charge may vary by type of investment fund.
3. Policy Administration Charge
This charge is expressed as a fixed amount or percentage of regular premium or percentage of sum assured, which may increase at
certain rate of inflation in future. The policy administration charge is deducted through redemption of unit at the prevailing unit price,
from the policyholder’s unit account at monthly intervals.
4. Mortality Charge
This charge is levied to provide the life insurance benefit. This charge is applied either on sum assured or sum assured less fund value
depending upon whether minimum death benefit is sum assured or higher of the sum assured and fund value, respectively. This charge
is provided separately in annexure and may vary by policy year in which such charge is due for deduction, attained age, gender and
whether any extra premium is chargeable due to health or occupation. The Mortality Charge is recovered through redemption of units
at the prevailing unit price, from the policyholder’s unit account, at monthly intervals or may be deducted upfront from the premium.
5. Rider Premium Charge
This charge is levied to recover the cost of additional rider benefits and is provided separately. This charge may vary by policy year in
which such charge is due for deduction, attained age, gender and whether any extra premium is chargeable due to health or
occupation. The Rider Premium Charge is recovered through redemption of units at the prevailing unit price, from the policyholder’s
unit account, at monthly intervals.
6. Surrender Charge
This charge is levied on the fund value of the policy at the time of partial withdrawal or on full surrender of the policy. This charge is
usually expressed either as a percentage of fund value or as a percentage of the premiums, shown as a formula or as a fixed percentage
varying by policy year.

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