The policy fee payable by a variable life insurance policy owner is intended to cover what?

The policy fee in a variable life insurance policy is primarily intended to cover the administrative expenses associated with maintaining the policy. This fee helps to manage costs related to the policy's setup, including record-keeping, premium collection, and overall policy servicing. It ensures that the policyholder has access to the necessary administrative support and infrastructure that facilitate the management of their variable life contract.

While other costs such as mortality costs and investment management fees may also be present within a variable life insurance policy, they are typically accounted for separately and not directly linked to the policy fee. The focus of the policy fee is specifically on the operational and administrative aspects of the policy, making it a vital component of the overall management of the insurance product.