Question

How is the Fund Management Charge (FMC) calculated in unit linked products?

a.

As a fixed amount deducted from the policy account value

b.

As a percentage of the policy account value deducted annually

c.

As a percentage of the premium deducted upon policy issuance

d.

As a percentage of the value of assets deducted from the Net Asset Value

Posted under IC 92 Actuarial Aspects of Product Development

Answer: (d).As a percentage of the value of assets deducted from the Net Asset Value Explanation:The Fund Management Charge (FMC) in unit linked products is calculated as a percentage of the value of assets and is deducted from the Net Asset Value. This charge is levied at the time of computation of NAV, usually done on a daily basis.

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Q. How is the Fund Management Charge (FMC) calculated in unit linked products?
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