Premium Expense Charge Clause Samples

Premium Expense Charge. Upon receipt of each payment and before allocation of the payment to the sub-accounts or fixed account, we will deduct a premium expense charge. This charge, shown on the Policy Data pages, is a percentage of the premium received. The monthly per $1000 of initial face amount charge information is shown on the Policy Data pages and varies by issue age, sex, payment class, and face amount of the insured. The Tier 1 monthly per $1000 of initial face amount rate is multiplied by the first $100,000 of initial face amount, divided by 1000. If the initial face amount is greater than $100,000, the Tier 2 monthly per $1000 of initial face amount rate is multiplied by the initial face amount in excess of $100,000, divided by 1000. A monthly per $1000 of face amount charge will also be assessed for each increase in face amount for the first 30 policy years following the effective date of each increase. The applicable charge is equal to the amount of increase multiplied by a rate, which varies based on the attained age, sex, payment class, and face amount of the insured, divided by 1000. The monthly mortality and expense risk charge is equal to the annual mortality and expense risk rate shown on the Policy Data pages for the appropriate policy year times the total value in the sub-account on the monthly activity day. The cost of insurance is determined as follows:

Premium Expense Charge. A maximum Premium Expense Charge of 8% will be deducted from each premium payment for the first 10 Policy Years and 4% thereafter. The Company reserves the right to charge less than the maximum charge. Beginning as of the Policy Effective Date and continuing on each Monthly Anniversary Day thereafter, the Company will deduct the charges listed below. With the exception of the Mortality and Expense Risk Charge, each charge will reduce the Sub-Account Value(s) and the Fixed Account Value in the proportion that each Sub-Account Value and the Fixed Account Value bears to the Un-loaned Policy Value. The Mortality and Expense Risk Charge will reduce only the Sub-Account Value(s).