The payment you make to a Life Insurance company to ensure you stay protected is called premium. From the time you purchase your policy, the insurance company starts investing your funds for your specific goals and starts covering you against any eventuality as stated in your policy. You remain covered for as long as you continue paying the premiums. If you stop paying towards your policy, you might lose your policy; so it’s very important that you keep paying your premiums on time.
There are different payment frequency options that you could choose from. You could either make your premium payments every month, once every three months, once a quarter or even once a year according to your convenience. Below is how you can refer to the different frequencies of payment:
There is no right or incorrect payment method or frequency to pay for the premiums of your policy.
What is most important is that your premiums are paid on time and you do not miss a payment; this helps you make the most of your policy and receive maximum benefits. To help you choose between the multiple options available, here are some benefits of each payment frequency:
If you choose to pay your Life Insurance premium monthly
1. It’s easy on the pocket - If you do not have lots of cash on hand, by choosing to pay monthly, the premium is divided into smaller portions across 12 months making it easier on your pocket.
2. Fits your budgeting style - If you prefer to pay bills monthly - rent, gym memberships, car loan EMIs, utility bills, etc., this payment frequency will fit in your lifestyle. Adding one more to the monthly bills will make it easier for you to budget your expenses.
If you choose to pay your Life Insurance premium quarterly or half-yearly
In this option, you will benefit with a blend of the positives of both annual premium payment frequency as well as monthly premium payment frequency. This is because choosing to pay every three or six months leaves you with enough time at your disposal to set aside small amounts towards making your payment. This will not be a strain on your pocket as it does not pop up every month and at the same time, you know it’s something you need to plan for once every quarter or half-year.
Choose to pay Life Insurance premiums annually? Smart choice.
Opting to pay your premiums in one go usually reduces operational hassles – there are less reminders for payment, fewer payment dates and payment receipts, etc. What’s also great is that you have to think of payment just once a year; you then get the remaining months to set aside money for other things and not worry about payments.
Annually or quarterly/half-yearly or monthly - the better option?
If you are now wondering which is a better option - for you to pay the premiums of your Life Insurance policy annually or monthly or quarterly, weigh the above factors and see which works best for you based on your conditions and lifestyle, including your budget and income.
But do note that it is very important that you buy Life Insurance only from a licensed agent, intermediary, broker, online, etc. to ensure you are paying the right amount of premium towards your policy.