Policy Allocation Charge
Mortality charge
Both A & B
None of the above
✅ The correct answer is C.
The premium of ULIP is divided into three parts:
1. Firstly, there is a policy allocation charge (PAC) which is comprised of agents’ commission, policy setup costs, administrative costs and statutory levies.
2. The second component is the mortality charge which is the cost of providing risk cover.3 The balance of premiums after meeting the above two are allocated for the purchase of units.
The premium of ULIP is divided into three parts:
1. Firstly, there is a policy allocation charge (PAC) which is comprised of agents’ commission, policy setup costs, administrative costs and statutory levies.
2. The second component is the mortality charge which is the cost of providing risk cover.3 The balance of premiums after meeting the above two are allocated for the purchase of units.