Which of the following is a premium deduction option?

Which of the following is a premium deduction option?

• A. Admin fees
• B. Mortality expense
• C. Investment mgmt fee
• D. Expense risk fee

Answer: (A)

The premium deduction option refers to charges taken directly from the premium you pay, before it goes into the contract’s accumulation. Admin fees are the type of charge that’s typically deducted from the premium upfront, reducing the amount that actually funds the annuity. The other charges—mortality expense, investment management fee, and expense risk fee—are ongoing costs usually assessed against the contract’s account value or the separate account, not taken from the premium at the time of payment. They reduce the value of the contract over time rather than the initial premium.

The premium deduction option refers to charges taken directly from the premium you pay, before it goes into the contract’s accumulation. Admin fees are the type of charge that’s typically deducted from the premium upfront, reducing the amount that actually funds the annuity.

The other charges—mortality expense, investment management fee, and expense risk fee—are ongoing costs usually assessed against the contract’s account value or the separate account, not taken from the premium at the time of payment. They reduce the value of the contract over time rather than the initial premium.