PSI Ohio Insurance Practice Exam

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Prepare for the PSI Ohio Insurance Exam with our comprehensive quiz. Utilize flashcards and multiple choice questions complete with hints and explanations. Ace your exam with confidence!

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Which of the following is an example of a premium payment mode?

Monthly premium payment
Quarterly premium payment
Annual premium payment
Semiannual premium payment

The correct answer is: Annual premium payment

A premium payment mode refers to the frequency with which the policyholder pays their insurance premium. In this context, each option listed represents a different way to schedule these payments, but the answer identifies the annual premium payment as the key example. An annual premium payment mode means that the insured pays the entire premium amount once a year. This mode can often result in lower overall costs, as insurers may provide discounts for making a single lump-sum payment compared to splitting the payment into smaller, more frequent installments. Annual payments can also simplify budgeting, as the policyholder only needs to remember one payment date each year. While monthly, quarterly, and semiannual payments are all valid premium payment modes, the question specifically asks for an example of a premium payment mode, and the annual mode typically emphasizes the broader concept of payment structures that insurers may offer.