Mortality and Expense Risk Charge

Mortality and Expense Risk Charge

An annual fee that some annuities and insurance policies assess on holders to compensate the provider for additional risk of death or the occurrence of some other insured event. For example, an insurance company will likely add a mortality and expense risk charge for a life insurance policy if someone purchases the policy at the age of 88 (indeed, some insurance companies do not provide policies for someone of this age). However, the company will be unlikely to add the charge if a person in good health purchases a policy at the age of 25.