|
 APR Calculator
|
|
Modal Premiums and the "Annual Percentage Rate"
Midland National policyowners can choose to pay their life insurance premiums
annually, semi-annually, quarterly or monthly. One way in which to analyze
these payment options is to calculate the modal premium "Annual Percentage Rate
(APR)" associated with each periodic payment option. Modal premiums are used
for Midland National's term life insurance and certain permanent life insurance
policies but are not used in connection with universal life policies and
variable universal life policies.
The modal premium "APR" equates the additional charges for a modal payment to
the interest on an installment loan. Because of the flexible premium feature of
Universal Life and Variable Universal Life policies, the "APR" concept does not
apply. For all other policies, the "loan" would equal the annual premium less
the first periodic payment. It is important to understand that unlike an
installment loan, the modal premiums are not a debt owed to the insurance
company. The policyowner is under no obligation to continue paying the modal
premium. Premium non-payment, however, will cause the policy to lapse and
insurance coverage will no longer be available.
In addition, you should know that it may not be appropriate to take out a
consumer loan to avoid payment of modal premiums. This could result in interest
charges associated with the loan that you would not incur by paying for your
insurance modally. You should carefully consider all available information in
determining the manner in which you choose to pay your insurance premiums.
APR Calculator
You can calculate the modal premium "APR" if you know your Annual Premium and
Periodic Payment. Periodic Payment is the amount you pay (or paid) monthly,
quarterly, or semi-annually and it can be determined from your billing
statement, cancelled checks, bank statements, or insurance policy. The Annual
Premium is specified in your Midland National policy. If you do not have the
figure for your Annual Premium or need assistance, please contact Midland
National Policy Services.
This calculation determines what the modal premium "APR" would be if the
Periodic Payment were to repay a loan equal to the Annual Premium. However, no
loan is actually involved in the payment of premiums on a monthly, quarterly or
semi-annual basis.
To calculate the modal premium "APR", first, select how you pay (or paid) your
premium. Then, enter the Annual and Periodic Payment Amount.
*The APR calculated above is based on the input provided, and is subject to any
error in the input.
|
|
|
|