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Insurer highlights savings in paying premiums annuallyPosted On Mon, May 24, 2010
Those that pay their life insurance premiums annually as opposed to monthly save close to 10 percent a year, a new study found.
AccuQuote, a company that provides term life insurance quotes, released the study of the costs of paying life insurance premiums for different terms which stated that annual percentage rates can climb to almost 30 percent if paid off monthly instead of annually.
The company says that while it may seem to offer more financial flexibility to pay 12 smaller amounts rather than one sizable one, it is actually more costly. For example, it said, a 30-year-old male can pay $500 a year for a 30-year, $500,000 premium, or make monthly payments of $45. The $40 savings drives the APR down to 17.2 percent.
This, AccuQuote says, is because those that do not pay their insurance fees annually are assessed a financing fee, and are in essence paying for the idea of affordibility.
However, syndicated financial expert Scott Brown recently said that thanks to pensions, Social Security and retirement savings, life insurance could be more beneficial for younger people than seniors.
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