What is the definition of Mortality and Expense (M&E) Risk Charge?
Mortality and Expense (M&E) Risk Charge refers to the fees that pay for related expenses in an annuity and insurance policies. Annuities and life insurance policies are computed with expense loadings such as death benefits and insurance fees. This is the fee paid to the insurance company for taking on the risks that are related to the annuity during the life of the annuity contract or policy.
The Mortality and Expense Risk Charge is usually an annual fee. This is charged depending on the age and health condition of the person to be insured. For instance, if someone who is aged 30 applies for insurance, there will usually be no mortality and expense risk charge. However, if someone who is already 75 years old applies for life insurance, a mortality and expense risk charge will be tacked on to the premium.
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