BANKING AFFAIRS

BANKING GENERAL KNOWLEDGE

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

Which of the following are the charges to provide for the cost of insurance coverage under the plan?

A	Policy Charges
B	Administration Charges
C	Surrender Charges
D	Mortality Charges

Explanation:

Detailed explanation-1: -Mortality charges cover the cost of this death coverage for the insurer. Depending on the policyholder’s health, age and gender, the mortality charges are determined. These charges are deducted every month from each of the fund(s) the policyholder has selected to invest in.

Detailed explanation-2: -Premium Allocation Charges This charge is levied by insurers to cover various costs like medical tests, underwriting expenses, commission charges, and more.

Detailed explanation-3: -Mortality charge is the fee imposed by a life insurance company to provide life cover to the policyholder. This charge increases as you age. In a pure protection term policy, the mortality charge makes up the majority of your premium.

Detailed explanation-4: -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.

There is 1 question to complete.