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How Much Interest Do I Save By Paying My Life Insurance Premium Annually?

How do you calculate the cost of paying a life insurance premium monthly instead of annually?  Get a Rate Calculator from www.truthconcepts.com.  Put the annual premium in the Present Value as a negative number (which changes it to Loan Balance) since the insurance company is loaning you the annual premium and you pay them back monthly.  Then make the mode “monthly” and “beg” for beginning of year since the insurance company loans you money at the beginning of the period.  Put the monthly premium payment in Monthly Payment box and the Months as 12.  In the following example, the interest charge the company assesses you for paying monthly is 6.5%. 
 

One Response to How Much Interest Do I Save By Paying My Life Insurance Premium Annually?

  1. We do share this with clients and often set them up on monthly, it totally depends on their cash flow. We also explain that if they pay one month’s premium (with the goal to continue of course) that the entire year’s cash value is credited. That is why insurance companies charge extra for modes other than annual. That being said, ideally, if they can pay annually they can use the “extra cost” money for something else.

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