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Aditya Birla Sun Life Insurance Company Limited
Aditya Birla Sun Life Insurance Company Limited
Premium Allocation Charges (PAC)
What are Premium Allocation Charges?
In Unit Linked Insurance Plans (ULIPs), a part of the premium you pay is used to cover policy-related expenses before the balance is allocated to your chosen investment funds. These upfront deductions are called Premium Allocation Charges (PAC).
They typically cover:
- Initial expenses for policy issuance
- Distribution and underwriting costs
- Regulatory levies as applicable
How Do PACs Work?
- When you pay a premium, the net premium after deducting PAC is invested in your selected ULIP funds.
- PAC is not uniform. It varies by product structure, policy year, and premium payment mode.
Key Points to Remember
-
Product-Specific
PAC differs across ULIP products and is clearly mentioned in the policy contract. -
Regulatory Compliance
As per IRDAI Product Guidelines (2024), PAC is capped and fully transparent. -
Long-Term Advantage
Many ABSLI ULIPs are structured with reducing or zero PAC in later years, ensuring higher fund allocation over time.
Illustrative Example
If your ULIP premium is ₹1,00,000 and the PAC for the first year is 2%, only ₹2,000 will be deducted and ₹98,000 will be invested. In subsequent years, PAC may reduce to 1% or even zero, meaning more of your premium goes directly into wealth creation. (Actual PAC varies as per the chosen ULIP product. Please refer to your specific policy contract for exact details.)
In a Nutshell
Premium Allocation Charges are product-specific deductions applied before your premium is invested in a ULIP. With newer plans like Wealth Smart Plus, Wealth Infinia, and Wealth Aspire, PAC is minimal, transparent, and compliant with 2024 IRDAI regulations, ensuring better fund value for policyholders.
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Newly Added Terms
Most Appreciated Terms
Buy ₹1 Crore Term Insurance at Just ₹576/month*
ABSLI Salaried Term Plan
Exclusively For Salaried Individuals
4 Plan Options
Life Cover upto 70 years
Optional Accelerated Critical Illness benefit
Inbuilt Terminal Illness Benefit
Life Cover
₹1 crore
Premium:
₹576/month*
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ABSLI Akshaya Plan
The above calculation is provided for illustrative and representational purposes only.
ABSLI Wealth Infinia is a unit-linked non-participating individual life insurance savings plan. (UIN: 109L129V01)
ABSLI Wealth Smart Plus is a unit-linked non-participating individual life insurance savings plan. (UIN: 109L147V02)
ABSLI Wealth Aspire Plan is a non-participating unit linked life insurance plan. (UIN:109L100V05)
In the Unit Linked Policy, the investment risk in the investment portfolio is borne by the Policyholder.
Linked Life insurance products are different from traditional life insurance products and are subject to risk factors.
Linked Insurance Products do not offer any liquidity during the first five years of the contract.
The policyholder will not be able to withdraw/surrender the monies invested in Linked Insurance Products completely or partially till the end of the fifth year from inception.
Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document. The premium paid in unit-linked life insurance policies are subject to investment risk associated with equity markets and the unit price of the units may go up or down based on the performance of the fund and factors influencing the capital market and the policyholder is responsible for his/her decisions. Tax benefits may be available as per prevailing tax laws. For more details on risk factors, terms and conditions please read the sales prospectus carefully before concluding the sale.
ABSLI Salaried Term Plan (UIN:109N141V04) is a non-linked non-participating individual pure risk premium life insurance plan; upon Policyholder’s selection of Plan Option 2 (Life Cover with ROP) this product shall be a non-linked non-participating individual savings life insurance plan.
*LI Age 21, Male, Non Smoker, Option 1: Life Cover, PPT: Regular Pay, SA: ₹ 1 Cr., PT: 10 years, Annual Premium: ₹ 6400/- ( which is ₹ 576/month) Premium exclusive of GST. On death, 1 Cr SA is paid and the policy terminates.
ADV/9/25-26/974
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