Why are there charges inside your life insurance policy?

Seeing line-item fees on an IUL statement can feel confusing at first. But when you look under the hood, those charges are simply what keep your policy safe, solvent, and guaranteed to pay out when your family needs it most!

Think of it like owning a condo: you own the property, but HOA fees cover building maintenance, security, and the safety net if something breaks.

Here is a quick snapshot of the 4 core charges inside an IUL:
1. Premium Charge Applied ONLY when you make a deposit. Covers state taxes and payment handling. If you pause contributions, this fee stops completely.

2. Cost of Insurance (COI) The heavy lifter. This directly buys the tax-free death benefit for your beneficiaries. Because risk goes up with age, this charge continues into your 90s.

3. Policy Charge The administrative upkeep. Typically under $100 annually, this covers customer service, monthly statements, and account management for life.

4. Expense Charge The initial setup cost. Lasts during the first 10–15 years to cover policy setup, medical underwriting, and distribution costs.

Insurance carriers collect these fees to run operations smoothly and—most importantly—ensure 100% payout reliability when the time comes.

Please contact the local agent of TransGlobal today or call 888-831-8868.

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This article is for informational purposes only and should not be construed as financial advice or legal advice. Please consult with a professional to develop a strategy that is right for you. Investing in securities involves risks, and there is always the potential of losing money when you invest in securities. TransGlobal Advisory, LLC (TGA) does not provide legal, tax, or accounting advice. You should consult your personal tax or legal advisor before making any financial decisions.