Which provision allows a policy owner to make premium payments more than once a year?

Which provision allows a policy owner to make premium payments more than once a year?

• A. Automatic renewal
• B. Mode of premium
• C. Dividend option
• D. Grace period

Answer: (B)

The provision that allows a policy owner to make premium payments more than once a year is the mode of premium. This term refers to the frequency with which premium payments can be made, such as annually, semi-annually, quarterly, or monthly. By selecting a mode of premium, the policy owner can choose a payment schedule that fits their financial situation and budgeting preferences. For example, if a policyholder chooses a monthly payment mode, they will be able to make their premium payments twelve times a year instead of just once annually. Different modes may also affect the overall cost of the premium due to potential administrative fees or discounts associated with certain payment frequencies. Understanding the mode of premium is essential for policy owners because it directly impacts their payment strategy and cash flow management, making it a critical aspect of policy management.

The provision that allows a policy owner to make premium payments more than once a year is the mode of premium. This term refers to the frequency with which premium payments can be made, such as annually, semi-annually, quarterly, or monthly. By selecting a mode of premium, the policy owner can choose a payment schedule that fits their financial situation and budgeting preferences.

For example, if a policyholder chooses a monthly payment mode, they will be able to make their premium payments twelve times a year instead of just once annually. Different modes may also affect the overall cost of the premium due to potential administrative fees or discounts associated with certain payment frequencies.

Understanding the mode of premium is essential for policy owners because it directly impacts their payment strategy and cash flow management, making it a critical aspect of policy management.