If a policy owner pays premiums more frequently, what happens to the overall policy cost?

• A. The cost decreases
• B. The cost increases
• C. The cost stays the same
• D. The policy is canceled

Answer: (B)

Paying premiums more often tends to raise the total amount you pay. Insurance companies often add a small per‑payment charge or include financing/processing costs when you choose monthly or quarterly billing. The coverage and base premium don’t change, but those extra charges add up over time. There’s also an opportunity‑cost effect: paying earlier in smaller installments means more portions of money are tied up sooner. So, the overall cost over the life of the policy goes up. The policy’s benefits aren’t affected by payment frequency, and choosing more frequent payments doesn’t cancel the policy.