Which premium payment mode results in the lowest total premium outlay for life insurance?

The choice that results in the lowest total premium outlay for life insurance is the annual premium payment mode. This is because insurance companies typically offer a discount for policyholders who pay their premiums annually. The rationale behind this discount is that it reduces administrative costs associated with processing payments more frequently, such as monthly or quarterly.

When premiums are paid monthly, quarterly, or semi-annually, the insurer must manage additional transactions, which can involve more paperwork and processing time. This added administrative burden often leads to higher overall costs for the policyholder. In contrast, an annual payment consolidates that management into a single transaction, allowing insurers to pass some savings on to policyholders in the form of a lower total premium.

As a result, those who choose the annual payment method end up saving money compared to those who select more frequent payment options, which generally accumulate extra fees or costs. This makes the annual payment mode the most economical choice for life insurance premium payments.