What does Deferred Acquisition Costs – DAC- mean?

It is a term pertaining to life insurance policies and practically it involves the deferring of the main expense of contracting a new customer/business over the life span of the insurance contract itself.

Deferred Acquisition Costs – DAC – explained

Firstly, this is necessary because the expenses for the part of the insurance company when faced with a business are very large. DAC works strictly on accountancy principles and it is a tool which helps keeping a balance into the business.