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Front Load

Also known as font end loaded this is the practice of deducting sales and marketing expenses from a premium or contribution before crediting the remainder to the investment or policy.

This can be expressed in the plan by allocating the differing units such as accumulation units versus capital units. Capital units are the units bought during the charge period and therefore reflect the charge.

In some plans these capital units are converted into accumulation units at the end and therefore give the policy holder the opportunity to get the charges for the plan back.

In these cases the life company gets their charges out of a portion of the profits made from the plan and the monies invested in it.



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