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Administrative Charge

An Administrative Charge is a fee the insurance company takes from your life insurance policy to cover paperwork, processing, and other operational costs. These charges are typically deducted from your premium payments or cash value, helping the insurer manage the policy’s basic functions.

Though administrative charges are usually a small percentage, they can add up over time and reduce your policy’s cash value growth. Understanding this fee can help you see how much of your money goes to policy benefits versus expenses.