Do I get a discount if I pay annually?
Technically, no, but buying a life insurance policy on a yearly payment plan is less expensive than buying one on a semi-annual, quarterly, or monthly payment plan. It makes sense that processing fewer payments costs the insurer less. And when the insurer saves money, it passes the savings on to the customer in order to win a competitive edge.
Oddly enough, though, quarterly premiums are by far the most expensive (for term life insurance, at least). Semi-annual is not far behind, however. The reason for this increased expense is that policies on these two payment schedules are more likely to lapse due to nonpayment; it's just not natural for people to make regular payments on a 3- or 6-month period. When policies lapse, both the insurer and the policyholder lose. The insurer takes a hit because it loses the business of the former-policy owner.
Monthly automatic payment from a checking or savings account is the cheapest choice if you do not want to pay annually.
At Wholesale Insurance our online quoter indicates both the monthly and annual payment plan prices, so you can compare the difference in a flash. (Remember to multiply the monthly rate by twelve, though, for a correct comparison.)
