Annualized
Updated: 17 January 2025
What Does Annualized Mean?
“Annualized” refers to a measurement made on an annual basis, rather than on a monthly or other periodic basis. In the context of insurance, premiums may be calculated on an annualized basis, or as a rate per year. This is referred to as an annualized premium.
Insuranceopedia Explains Annualized
Although insurance premiums are often charged monthly, it is still helpful for individuals, families, and businesses to know the annualized premium. This can be particularly useful if a policyholder plans to pay their premiums in advance. For example, if a person wants to pay his auto insurance premium two years in advance and his monthly payment is $300, his annualized premium would be $3,600. To cover two years of insurance, he would need to pay $7,200.
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