Why Do Annual Life-Insurance Payments Often Cost Less? [Interest Factor]

In this video, I take a brief and untutored look at the way interest accumulates differently for different life-insurance pay modes. Specifically, I contrast a case where a premium is paid in one (1) installment, annually and a case where it is instead paid in twelve (12) installments, monthly.

What I show is that monthly payments accrue interest more slowly than annual installments. And this difference, in turn, can result in slightly higher costs for non-annual pay modes.

There are several caveats, however. Monthly pay modes are not always more expensive. But, generally, the more payments you make, the greater will be your expense.

Disclaimer: I am not a financial adviser. This presentation is for general informational or entertainment purposes. Nothing herein should be construed as providing financial, insurance, investment, legal, retirement, savings, tax, or any other sort of advice. For personalized recommendations, consult a licensed professional in your area.

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