Policy fees for variable life insurance are usually intended to cover:

Policy fees for variable life insurance are primarily intended to cover the administrative expenses related to managing the insurance policy. These expenses can include costs associated with maintaining records, issuing statements, underwriting the policy, and other operational costs necessary for the ongoing management of the policy.

While investment returns, marketing costs, and commissions for agents are all relevant aspects of the insurance process, they are not the direct purpose of the policy fees. Investment returns are dependent on the performance of the investment options chosen by the policyholder and do not correlate directly with the policy fees. Marketing costs might be accounted for through premiums or other financial mechanisms rather than through specific policy fees. Similarly, commissions for agents are typically paid out of the premium reserves or other channels distinct from administrative fees.

Therefore, the correct understanding is that policy fees serve to facilitate the administrative functions that keep the policy in force and support the insurance company’s operational structure.