Deferred Acquisition Costs - DAC

AAA

DEFINITION of 'Deferred Acquisition Costs - DAC'

Typically used in the insurance industry, this is when a company defers the sales costs that are associated with acquiring a new customer over the term of the insurance contract.

INVESTOPEDIA EXPLAINS 'Deferred Acquisition Costs - DAC'

Most of the sales costs arise from referral commissions to external distributors and brokers.

RELATED TERMS
  1. Life Insurance

    A protection against the loss of income that would result if ...
  2. Insurance

    A contract (policy) in which an individual or entity receives ...
  3. Gap Insurance

    A type of auto insurance that car owners can buy to protect themselves ...
  4. Elder Law

    Elder law is a legal specialty focusing on the rights and needs ...
  5. Acquisition

    A corporate action in which a company buys most, if not all, ...
  6. Net Premiums Written

    The sum of premiums written by an insurance company over the ...
Related Articles
  1. Industry Handbook
    Investing Basics

    Industry Handbook

  2. 15 Insurance Policies You Don't Need
    Insurance

    15 Insurance Policies You Don't Need

  3. Passing The Buck: The Hidden Costs Of ...
    Bonds & Fixed Income

    Passing The Buck: The Hidden Costs Of ...

  4. Investing In Fine Wine
    Options & Futures

    Investing In Fine Wine

comments powered by Disqus
Hot Definitions
  1. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  2. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  3. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  4. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  5. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  6. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
Trading Center