Question

What happens to the balance amount of premium after deducting the Premium Allocation Charge (PAC)?

a.

It is returned to the policyholder

b.

It is used for policy administration

c.

It is utilized to purchase units for the policyholder

d.

It is invested in external funds

Posted under IC 14 Regulations of Insurance Business

Answer: (c).It is utilized to purchase units for the policyholder Explanation:After deducting the Premium Allocation Charge (PAC), the balance amount of premium is utilized to purchase units for the policyholder. This ensures that a portion of the premium is invested to generate returns for the policyholder.

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Q. What happens to the balance amount of premium after deducting the Premium Allocation Charge (PAC)?
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