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28 November, 08:27

When an insured decides to change her mode of premium payment from annually to monthly, the total premium due would:A. FluctuateB. IncreaseC. Remains the sameD. Decrease

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  1. 28 November, 08:52
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    correct option is B. Increase

    Explanation:

    solution

    when change payment from annually to monthly

    so premium due would be increase as in annual premium

    because premium is paid at the start of the year where is in twelve monthly installment last premium is almost at the end of the year

    So that, when the premium is paid on an annual basis insurance company is access to full premium at the start

    it can be used for generating return

    so correct option is B. Increase
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