An amount (of costs) that is charged at the beginning of an insurance policy rather than in smaller amounts spread over its term. It is an upfront (one-time) charge (sales charge) that a buyer of insurance has to pay at the time of insurance acquisition. However, depending on the type of insurance, front-end loads differ in placement and proportion. For variable annuities (VAs), front-end loads are not commonplace. Most insurance companies choose to impose a surrender charge, instead.

For variable life insurance, the front-end load is usually deducted from premium payments (as a part of the maximum premium payable/ guideline premiums / target premiums). Unlike variable annuities, variable-life policies often apply both front-end loads and surrender charges.

Typically, the front-end load is made up of a sales charge aiming to cover the insurer’s contract expenses, such as underwriting, brokering, and marketing expenses related to the contract, etc. However, the front-end load may encompass other flat charges such as an administration expense, issue charge.

The front-end load is also known as a front-end sales charge.