A fee, or deduction in monthly payment, that a person holding a life insurance policy must pay to compensate the insurer for any losses resulting from the potential that the holder will suffer an unexpected death. The average fee is about 1.25% per year. The mortality charge, also known as a “cost of insurance” charge (COI) is calculated according to expectations of future mortality. See: TVPX ARS, Inc. v. Genworth Life and Annuity Ins.
See also: life insurance.
[Last updated in August of 2020 by the Wex Definitions Team]