Which premium payment mode is associated with the lowest total cost?

Which premium payment mode is associated with the lowest total cost?

• A. Monthly.
• B. Quarterly.
• C. Semi-annually.
• D. Annually.

Answer: (D)

Paying premiums annually tends to cost the least over the life of the policy. Insurers often offer a discount for a single annual payment and avoid the extra per‑payment charges that come with more frequent installments. When you pay monthly, quarterly, or semi‑annually, you typically face additional administrative fees or financing charges, and these add up over time. So, even though you’re paying more upfront, the total amount paid across the term is usually smallest with the annual payment.

Paying premiums annually tends to cost the least over the life of the policy. Insurers often offer a discount for a single annual payment and avoid the extra per‑payment charges that come with more frequent installments. When you pay monthly, quarterly, or semi‑annually, you typically face additional administrative fees or financing charges, and these add up over time. So, even though you’re paying more upfront, the total amount paid across the term is usually smallest with the annual payment.