Important Points for IC 26 - Life Insurance Finance Exam
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While recording other expenses of management (policy stamp, contribution to staff PF, printing, postage), the respective expense account is debited and the bank account is credited.
The expenses of management which are related to unit linked plans are classified as direct expenses and indirect expenses.
Direct expenses incurred on unit linked business include commission, incentives, policy expenses, medical expenses, advertisement and publicity, fund management expenses etc.
Direct expenses such as advertisement, promotional expenses of the policy etc. which are of one time in nature are amortised over a number of years.
Indirect expenses incurred on unit linked business include employee remuneration and welfare benefits, rent, repairs and maintenance, printing and stationery, auditor's fees, communication expenses, receipt stamps, training expenses and other miscellaneous expenses.
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