BANKING AFFAIRS

Detailed explanation-1: -Premium Allocation Charge means a percentage of the Premium appropriated towards charges from the Premium received. The balance known as allocation rate constitutes that part of the Premium which is utilized to purchase (investment) units for the Policy. This charge is levied at the time of receipt of Premium.

Detailed explanation-2: -Definition: Premium Allocation Charges is a percentage of the first year of premium charged by life insurance company before allocating the policy. The charge includes the initial and commission expenses of the intermediary.

Detailed explanation-3: -Premium Allocation Charges The insurer deducts them from the first year premium. For example, if the ULIP plan premium allocation charges are at 15% and the premium is ₹ 40, 000, then ₹ 6, 000 will be deducted as ULIP charges and ₹ 34, 000 will be invested.

Detailed explanation-4: -A premium allocation charge in ULIP is a percentage of the premium amount paid during the first year of a ULIP plan. Since a part of your ULIP investment goes into a life cover, these percentage deductions help cover the initial expenses incurred by the ULIP provider to allocate the policy.

Detailed explanation-5: -Premium Allocation Charges in ULIP:-It is a percentage of the first year premium charged by the insurer before allocating the policy.