Budgeting

• When you pay your insurance premiums annually, you don't have to worry about budgeting the payments throughout the year. After you make an annual payment, you are finished until next year.
  
  

Discount

• Annual premium payments can save you money. Many insurance companies give you a significant discount for paying your premium annually.
  
  

Considerations

• Paying monthly insurance premiums can put you at a disadvantage; if you have an accident shortly after you have paid a monthly premium, you have to come up with the money for the deductible as well as for the premium.
  
  

Automatic Deduction

• You might elect to have your monthly insurance premium automatically deducted from your checking account, especially because some insurers give a discount for automatic deduction. However, unless you stay on top of your account, the automatic premium payment could trigger an overdraft--and the accompanying fees.
  
  

Paperwork

• Making annual payments reduces the paperwork you receive from the insurance company. With a monthly payment, the insurer probably sends you a bill each month.