Policy Allocation Charge would be _________ in the initial years.

The correct answer is: A. High

Policy Allocation Charge (PAC) is a fee that is charged by an insurance company to cover the costs of administering a policy. It is typically a percentage of the premium that is paid each month. The PAC is usually highest in the initial years of a policy, as the insurance company incurs higher costs in setting up the policy and processing claims. Over time, the PAC may decrease as the costs of administering the policy decrease.

Here is a brief explanation of each option:

• High: The PAC is typically highest in the initial years of a policy, as the insurance company incurs higher costs in setting up the policy and processing claims.
• Low: The PAC may decrease over time as the costs of administering the policy decrease.
• Moderate: The PAC is typically somewhere between high and low.
• None of the three: The PAC is not always high, low, or moderate. It can vary depending on the insurance company and the type of policy.