What Is Modal Premium? Definition

Why it matters

The annual premium is often the cheapest total. Monthly payment is easier on a budget but may add a modal charge. Some carriers need bank draft for monthly payments. Agents should show the cost of each mode so a family can choose with open eyes. Fees and options vary by carrier and state.

Source: naic.org

Related terms

Premium: A premium is the amount you pay to keep an insurance policy active. You can pay it monthly, quarterly, semiannually, or annually, depending on the carrier.
Level Premium: A level premium is a payment that stays the same for the life of the policy or for a set period, such as a 20-year term. It does not rise as the insured gets older.
Premium Rate: A premium rate is the price a carrier charges per unit of coverage, often per $1,000, based on the insured's age, sex, class, and plan. The total premium comes from this rate.
Grace Period: A grace period is the extra time after a premium due date when the policy stays in force even though the payment is late. Many policies give 30 or 31 days.
Lapse: A lapse happens when a life insurance policy ends because the owner did not pay the premium by the end of the grace period. Coverage stops unless the policy is reinstated.

All 241 terms

Why it matters

Start your climb.