Mode Of Premium

Mode of premium differs from mode of payment. The mode of premium refers to how often one pays for insurance in a year, while the mode of payment refers to the method of payment, such as cash or check. The insured may choose to pay once a year, twice a year, or monthly, depending on their income or the availability of funds.

Many insurance companies allow clients to change their payment schedules. An annual payment can be switched to a quarterly or monthly mode. Annual payments tend to cost less than more frequent ones because certain expenses, such as collection fees, are reduced.