Life insurance premiums are payments made on a regular basis by a consumer that keep the life insurance policy in effect. Many policies, such as whole life policies, have fixed premiums, while term or universal life insurance policies have adjustable premiums. Regardless of the frequency of premiums, most policies stipulate that premiums must be paid on time or the policy lapses and can be considered null and void. Some policies offer cash components or value, which can be used to pay premiums. Always ask a life insurance agent the fees for different payment plan schedules to get the best deal.
Monthly
Paying life insurance premiums monthly can be more affordable to many consumers. But paying on a monthly basis can add costs for the convenience of doing so, ranging from $1 to $10 a month as of December 2009. According to SmartMoney.com, some consumers can be charged as much as 15 percent to 20 percent of the policy's annual premium for the convenience of making monthly payments.
Quarterly
A quarterly insurance premium will include three months' of payments at a time, billed four times a year. This is a convenient method for most consumers, and enables adequate time to save up for the premium without the premium growing too large to handle.
Semi-Annually
Paying a life insurance premium twice a year, or semi-annually, is convenient for many life insurance policyholders, while doing so creates a financial burden for others unable to stockpile six months' worth of premiums at a time.
Annually
Policyholders can also choose to pay their life insurance premiums on a yearly or annual basis. An example of such a policy is called an annual term life insurance policy, according to SpectrumInsurance.com, and often comes with increasing yearly premiums. But some term policies with relatively low premiums offer not-so-painful annual premiums for many policyholders.
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