Like most people, I like to hold on to my money as long as I can before paying bills. However there is a definite advantage to paying off insurance premiums yearly instead of monthly, to avoid costly processing charges.

Of course they don't advertise this, your agent will simply tell you you have the option of paying monthly, quarterly, semi-annually, or annually. For awhile I always chose monthly, mostly because I couldn't afford to pay it off in advanced. However I noticed on my car insurance statement that every time I make a payment, they tack on a $5 processing fee to process the payment. Simply by paying my auto insurance annually, I save $55 (1 payment vs 12).

While researching my other insurance plans, term life policies for both my wife and I, and homeowner's insurance, I realized the same was true for these policies as well. Now my homeowners insurance is paid out of escrow each year, so I'm already doing that right, but in the near future I will likely change both of our life policies to be paid annually. I can sock away the same amount every month, and some out almost $100 ahead when I pay the premium.mortgage calculator