Pearson VUE Life Insurance Practice Exam

The term "premium payment mode" specifically refers to the frequency with which a policyholder pays premiums. This can vary by insurance policy, allowing for options such as monthly, quarterly, semi-annually, or annually. Choosing a payment mode influences the overall cost and management of the insurance expense. For instance, some insurers may offer discounts for annual payments compared to monthly payments due to reduced administrative costs. Understanding this concept is crucial for policyholders to effectively manage their insurance budgets and obligations, making it a fundamental aspect of life insurance policy management.