Premium Periodicity (Premium Frequency)

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Definition

The frequency at which the insured chooses to pay the premium is called premium periodicity. The premium periodicity is mentioned in the policy schedule.

Description:

Premium periodicity or the premium frequency means the frequency of premium payment depending on the payment mode. For example, the premium payment frequency could be either every month, every three months, once in a quarter, or once in a year. 

The premium frequency should be selected based on the convenience of the pocket. A monthly premium will suit your budget, and the quarterly premiums can be efficiently planned. Overall, you can choose the premium periodicity depending on your income.

Example:

Pramod, a photographer, worked as an independent professional. His work style gave him high incomes only in a few months, i.e. occasionally. But despite the limited income, he wanted a life insurance policy. Considering the income levels, Pramod purchased the policy for which he will pay the premium every time after 6 months. This implies that the premium payment frequency was half-yearly.