Administrative Expenses are the costs an insurance company incurs to maintain your policy, including customer support, account management, and record-keeping. These expenses are factored into various policy charges, ensuring the insurer can manage your account smoothly.
For policyholders, administrative expenses mean a portion of their premiums or cash value goes toward operational costs, not just benefits. Keeping these expenses low can make your policy more efficient, but they’re necessary to keep policies functioning effectively.