The correct answer is: B. Less.
A policy allocation charge (PAC) is a fee that is deducted from the premium paid for a unit-linked insurance plan (ULIP). The PAC is used to cover the costs of administering the policy, such as the cost of the fund manager and the cost of the insurance company.
The PAC is usually a percentage of the premium, and it is deducted before the remaining amount is invested in units. This means that the amount of money that is invested in units is always less than the amount of the premium that is paid.
The PAC can be a significant amount of money, and it can have a big impact on the performance of the ULIP. For example, if the PAC is 5%, and the premium is Rs. 10,000, then only Rs. 9,500 will be invested in units. This means that the investment will start off with a 5% loss.
The PAC is usually a fixed percentage, but it can also be a variable percentage. A variable PAC means that the percentage of the premium that is deducted can change over time. This can happen if the costs of administering the policy go up or down.
It is important to understand the PAC when you are considering buying a ULIP. The PAC can have a big impact on the performance of the ULIP, and it can make it more difficult to achieve your financial goals.
Here is a brief explanation of each option:
- Option A: More. This is incorrect because the PAC is a fee that is deducted from the premium, which means that the amount of money that is invested in units is always less than the amount of the premium that is paid.
- Option B: Less. This is the correct answer because the PAC is a fee that is deducted from the premium, which means that the amount of money that is invested in units is always less than the amount of the premium that is paid.
- Option C: High. This is incorrect because the PAC is a percentage of the premium, not a fixed amount. The percentage of the premium that is deducted can vary depending on the terms of the ULIP.
- Option D: Any of the above. This is incorrect because only option B is correct.