Which premium payment mode usually results in the highest total cost?

The monthly premium payment mode typically results in the highest total cost over a year compared to other payment modes. This is mainly due to the frequency of payments. Insurance companies often increase the total premium charged for more frequent payment plans because they incur additional administrative costs to process these payments.

When premiums are paid monthly, the insurance company has to handle more transactions, which can increase their operational expenses. As a result, policyholders who choose to pay monthly usually end up paying a higher overall amount than if they had opted to make an annual payment.

Other payment modes, such as quarterly, semi-annually, or annually, generally come with lower total costs because they distribute the administrative expenses over fewer transactions. Annual payments, for instance, often provide the best value, as they typically include discounts to incentivize policyholders to pay less frequently.