Universal insurance generally deducts the risk protection fee and policy management fee of the policy every month, so why does the insurance company also deduct the initial fee?

The risk protection fee, policy management fee, and initial fee of the policy are three different expenses.

Risk premium: The customer base for purchasing an insurance is very large, but no company can accurately estimate it; therefore, when designing the insurance, the insurance company will perform actuarial calculations to determine the total number of people who purchase the insurance. The repayment risk is used to determine the risk premium amount of unit risk protection. Once determined, it will not be changed.

Policy management fee: It can be seen that the policy management fee of universal life insurance is basically less than 10 yuan per month. This fee is charged for consultation, administrative management, etc. during the validity period of the policy.

Initial expenses: Mainly used for the sales and management of insurance policies. Generally speaking, they include agent commissions, supervisor commissions, team management expenses, insurance company back office and operating expenses, etc.

In fact, not only universal life insurance, but all insurance products have the above fees, but other insurance types are not disclosed.