Want to save the most money on your life insurance premiums? Pay annually. To find out why, read on.
[Editor’s Note: This blog was originally published on February 15, 2010. The content has been slightly updated.]
Most insurance companies offer you the right to choose from among four payment plan options to pay your life insurance premiums: once a year (annually), twice a year (semi-annually), four times a year (quarterly), or twelve times a year (monthly).
But did you know that paying your insurance premiums monthly can cost you a lot more in the long-run than paying annually or even semi-annually? It’s true! In fact, you could be paying as much as 29.7 percent interest by paying monthly.
Here’s an example:
A 30-year-old male has the choice to pay either $500 annually for a $500,000, 30-year term life insurance policy OR make 12 monthly payments for $45 each totaling $540 a year.
By choosing the monthly option, he’s paying an annual percentage rate of 17.2%! That extra cash adds up over the years! Think about it…instead of paying monthly, you could put that extra money aside each month to save for a rainy day!
To see how you can save a significant amount of money on any of your life or other insurance payments, check out our APR Calculator. Paying annually rather than monthly could be the greatest financial decision of your life.
Remember, life insurance is one of the greatest invention ever created…right up there with the wheel. It can turn pennies into dollars when your family needs it most. Life insurance can help pay mortgage payments, groceries, utilities or any other outstanding bills. In short, you NEED life insurance.
If you’re interested in learning more about paying monthly vs. annually, call a licensed life insurance agent at AccuQuote. You can also contact us for a free life insurance quote from the best term life insurance companies in the country.