Paying Monthly Life Insurance Premium charge 10.80%
For traditional insurance policy, the life assured can either pay yearly, half-yearly, quarterly, or monthly.If the yearly premium is RM1000/year,the monthly premium = RM1000 x 1.05/12 = RM87.50 (total 5% extra)the quarterly premium = RM1000 x 1.03/4 = RM257.50 (total 3% extra)the half-yearly premium = RM1000 x 1.02/2 = RM510.00 (total 2% extra)If we want to compare the interest rate with Fixed Deposit Rate or Home-loan daily rest rate, we need to calculate the effective annual rate (EAR). It can be calculated using the Financial Calculator.(I use HP 10B)Let's ...

