APR Calculator

Is There a Difference in How Often You Pay Your Premiums?
Changing how often you pay your premium could save you money (it may be a lot!). You almost always have a choice of paying your premiums monthly, quarterly, semi-annually, or annually. This calculator is designed to help you make an informed decision by calculating the annual percentage rate you are paying when paying other than annually.

The mode premium factor for semi-annual premiums typically ranges from 51%-53%, meaning you pay an extra 2%-6% if you do not pay the premium annually. The mode factor for quarterly ranges from 26%-30% translating to an extra 4%-20% you pay when making quarterly payments. Monthly mode factor is between 8.66% to 9%, meaning you pay an extra 3.92%-8%. The reason the monthly option is frequently more economical than the quarterly is because monthly bank-draft persistency is better than quarterly mode persistency. Companies charge these mode premium factors because if you choose to pay other than annually they do not have use of the premium dollars for the entire year.