Mortality charge, also known as cost of insurance (COI) in many life insurance products, is the portion of premium or policy charges that compensates the insurer for the risk of paying death benefits. It is based on the insured's age, gender where permitted, risk class, and net amount at risk, and is derived from actuarial mortality tables adjusted for company experience. In traditional term and whole life policies, mortality costs are built into level premiums. In universal life and variable universal life contracts, mortality charges are typically deducted monthly from the policy's cash value as part of the monthly deduction. Mortality charges may have guaranteed maximums and current (non guaranteed) scales that the insurer can adjust within policy limits. Understanding mortality charges is essential when evaluating competitiveness, policy sustainability, and the impact of underwritten risk classes on cost.

Practically, mortality charge is discussed when comparing different carriers or products for the same client. Advisors may explain that a preferred risk class has lower mortality charges than a standard or table-rated class, resulting in lower premiums or stronger cash value growth. In universal life reviews, rising mortality charges at older ages are often cited as a key reason why underfunded policies may lapse if not adjusted. Carriers sometimes change current cost-of-insurance scales, increasing mortality charges for certain policy blocks, which can trigger client and regulatory scrutiny. Advisors who understand mortality charges can better interpret inforce illustrations, explain differences between products, and set realistic expectations about long-term policy performance and the value of maintaining favorable risk classifications.