In universal life insurance, what factors are considered to determine the mortality charge?

In universal life insurance, the determination of the mortality charge relies significantly on the age and health risk factors of the insured individual. Age is a critical factor because as an individual gets older, the likelihood of mortality increases, which in turn raises the associated costs for providing life insurance coverage. Health risk factors also play a vital role, as individuals with pre-existing health conditions or risky lifestyles are likely to present a higher risk of death, leading to higher mortality charges.

This approach allows insurance companies to assess the risk associated with each policyholder more accurately, reflecting not only the basic demographic information but also the nuances of individual health situations. By focusing on these aspects, insurers can set mortality charges that are fair and reflective of the actual risk they are undertaking with each policyholder.