PSI Life Exam Practice Test 2025 - Free Life Insurance Exam Questions and Study Guide

Question: 1 / 400

What does "premium payment mode" signify in life insurance?

The percentage of premium paid annually

The length of time the policy is in force

The frequency at which premiums are paid

In life insurance, "premium payment mode" refers to the frequency at which premiums are paid by the policyholder. This can encompass various payment schedules, such as annually, semi-annually, quarterly, or monthly. Understanding the premium payment mode is crucial for policyholders, as it influences cash flow and budgeting aspects of their insurance policies.

For example, choosing a monthly payment mode may result in a higher overall cost compared to an annual payment due to potential processing fees. Thus, the mode of payment directly impacts how often the insurance company receives payment and how the policyholder manages their financial planning concerning the insurance coverage.

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The total sum paid over the life of the policy

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