Cost of Insurance
A charge used in some permanent policies to cover mortality risk, often deducted from policy value.
Why it matters
Charges may rise with age and can contribute to lapse if funding or credited interest is insufficient.
Where you may see it
Universal life statement, illustration, policy charge schedule, and in-force ledger.
What to verify
Current and guaranteed maximum charge rates, deduction basis, age progression, and effect of changing death benefits.
Do not confuse it with
Premium, the amount paid into the policy, which is not the same as the internal mortality charge.
Read Cost of Insurance in context
Start with the exact sentence where the term appears, then read the definition, schedule, and any referenced rider together. The practical concern is this: Charges may rise with age and can contribute to lapse if funding or credited interest is insufficient. Locate the relevant records—universal life statement, illustration, policy charge schedule, and in-force ledger.—and compare them with the issued contract rather than a sales summary.
Before signing, changing coverage, or making a claim decision, record the points that control the result: Current and guaranteed maximum charge rates, deduction basis, age progression, and effect of changing death benefits. If another policy uses similar wording, do not assume it has the same effect.
Keep the dated page or form with your notes. If the definition changes the benefit, premium, ownership rights, or a deadline, ask the issuing insurer for a written explanation tied to the policy number.
Reliable places to check
- Your issued policy and application copy.
- NAIC consumer life insurance resources.
- Your state insurance department for licensing and consumer help.