An annual insurance policy is a policy paid for by the year as opposed to by the month. Therefore, a policyholder who pays a yearly premium would receive one year of coverage. Annual insurance policies are offered for a wide variety of insurance products.
The benefit of annual insurance policies is that the policyholder only has to make one payment for a twelve-month period. This can be quite convenient when compared to making twelve payments for a monthly plan for the same length of time. Annual insurance policies are also convenient for insurers who only have to keep track of one payment per year. At the end of the policy year, the policyholder oftentimes has the option to renew or to let the policy expire.
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