4. Hidden Charges

The fees and charges vary according to the insurance variety and nature of the plan. If you are opting for an insurance plan that combines insurance as well as investment; your agent might not mention to you the charges like allocation fees, risk premium charges and administrative charges which the insurance company is going to take from the amount deposited by you.

This means that when you buy such policy, the amount paid by you will automatically become less after deducting so many hidden charges. The allocation fee is typically higher in the first year and gradually reduces thereafter. Thus in order to recover the initial paid amount by the investor will have to wait until the NAV of the remaining amount grows to make up for this amount.