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Webster's New World Finance and Investment Dictionary » hidden load
hidden load
hidden load definition - finance
A
sales charge assessed by life insurance companies on life insurance policies.
The specific load is not disclosed; instead, the purchaser of the policy is told
what amount of the first yearÂ’s premium will go to build the cash value of the
insurance policy. This indirectly shows what sales loads are taken out of the
premium payment. Another hidden load that may come as a surprise to investors
who donÂ’t read the fine print of their prospectus is charges assessed on their
mutual funds. One example of a “hidden” load is the 12b-1 fee that is assessed
annually as a percentage of the fundÂ’s assets. The fee covers marketing and
distribution expenses and typically it is under 1%.
Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.
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