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What are Mortality Charges & How to calculate it?
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Life is precious. So, getting a life cover is important. And, you know it comes with charges. One of these charges is the Mortality charges, so what is it about? When you buy a life insurance policy like ULIP (Unit-linked insurance plan), the insurer levies a charge for the insurance protection upon death and to cover certain death-related expenses. This is Mortality charge. Mortality charges are a small part of the premium paid by you. In fact, this is the actual cost of insurance cover. Mortality charges are deducted as units based on the interval set by you.
But how are mortality charges calculated? A lot of factors are considered like mortality rate of the country or a particular age group. Typically, higher the sum assured, higher the age, higher will be the mortality charge. However, for younger person, mortality charge will be lesser. Simply put if you are young, healthy and in a non-risky occupation, rest assured, you won’t be paying a high mortality charge.