It's important to find ways to save in today's economic climate, especially if your financial situation has been negatively impacted by dramatic decreases in home values, savings and investments
Wheeling, IL (Vocus) May 24, 2010
AccuQuote, a leader in providing term life insurance quotes to people across the United States, reveals how much money consumers can save by paying their life insurance premiums annually versus monthly. The company exposes an annual percentage rate (APR) as high as 29.7 when consumers choose to pay their life insurance premiums in installments rather than in one lump sum.
Most types of insurance companies, including property and casualty, health and life, offer consumers various payment options, such as paying premiums monthly, quarterly, semi-annually and annually. Consumers who do not pay their premiums annually are charged a financing fee. In other words, consumers are paying for overall convenience and affordability. This additional charge can be significant.
“It’s important to find ways to save in today’s economic climate, especially if your financial situation has been negatively impacted by dramatic decreases in home values, savings and investments,” says Byron Udell, founder and CEO of AccuQuote. “One of the ways consumers can save money is by cutting back on unnecessary spending, like dining out. On the other hand, things like your life insurance and other types of insurance shouldn’t be downgraded. The good news is that you can save a fortune and keep the same amount of coverage by paying your premiums annually versus monthly.
Some consumers agree that convenience and financial flexibility is worth paying a financing fee in addition to the actual cost of their life insurance coverage. However, some consumers may be surprised at how much money they can actually save by paying their life insurance premiums annually. For example, a 30-year-old male can pay either a $500 annual premium for a $500,000, 30-year term life insurance policy or make 12 monthly payments of $45 each. The cost of paying monthly is an additional $40 annually, which is an effective APR of 17.2.
While most insurance companies typically do not disclose the effective APR, consumers can use an APR calculator to determine the total dollar amount and provide an approximate APR for any additional charge consumers may incur by paying their premiums in installments. By simply entering the annual premium, payment method and payment amount, consumers will have the information they need to intelligently determine whether the additional cost of paying fractionally (monthly, quarterly or semiannually) makes sense financially.
“Paying your life insurance premium annually could save you thousands of dollars in interest charges over the life of your policy,” says Udell. “However, life insurance companies understand that not everybody who needs life insurance can afford annual payments, which is why alternative payment options are available. In the end, choose the payment method that fits within your overall budget so you don’t risk neglecting your financial obligations.”
AccuQuote helps consumers find the best values in term life insurance by combining instant online life insurance quotes with the personal service of unbiased life insurance professionals that can help answer questions, identify important issues, and make meaningful recommendations. The company offers consumers an extensive selection of life insurance options, including term life, whole life, and universal life, as well as selected annuities. The website has many handy insurance tools, including a life insurance needs calculator to help you figure out how much to buy, a glossary that explains industry terminology, a collection of articles that cover the basics about life insurance and a blog which answers many questions about life insurance. For additional information or to get quotes for cheap term life insurance, please call 1-888-314-4455.