Answer:
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
When an insured decides to change her mode of premium payment from annually to monthly the total premium due would remain the same.
Explanation:
Since the amount is paid annually, changing it to monthly payment will mean the spread of the annual premium that is supposed to be paid over the twelve months which will be an equal amount.
Therefore there would be no change in the total premium due to be paid.
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