Mortality and Expense Charge

The mortality and expense charge or “M&E” fee is charged by the insurance company and it is intended to cover the cost of death benefits (the “mortality” portion) and the expenses of other insured income guarantees that might be included with the annuity contract. The mortality expense involves the risk of the contract holder dying while the account balance is less than the total of premiums paid less any withdrawals. Again, the expense portion is intended to cover the costs of providing and administering any other insured features. Total M&E charges typically range from .40 to 1.75 percent per year, with an average of around 1.25 percent. Most insurers deduct this expense on an annualized basis. With variable annuities, the M&E fee is only applied to funds held in the separate accounts and not to any of the funds held in the general account. Also see glossary definitions for M&E fee and mortality and expense fee.

What is M&E fees?

M&E fees (also referred to as mortality and expense charges) are part of the expense structure of annuities.  In general, these charges cover the insurance

Annuity Fees and Expenses

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Annuity Digest Buying Guide: Annuity Fees and Expenses

Expenses should be a top priority for any financial services consumer.  Many people have been conditioned to be aware of expenses when it comes to investment products.  Indexed-bases investment management companies such as


MetLife Introduces Low Cost Variable Annuity

MetLife recently announced the launch of a simple, low cost variable annuity called Simple Solutions. The Simple Solutions variable annuity will be sold through banks and is intended to address retirees and near-retirees in the range of 60-80 years of age. Features and highlights include: A guaranteed lifetime withdrawal benefit of up to 6% of the initial investment if withdrawals begin after age 76, 5% between 65 and 75, and 4% if before age 65. Automatic annual increases of the GLWB if the...
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