Updated: 09 June 2023

What Does Annualized Mean?

Annualized refers to a measurement made on an annual basis as opposed to a monthly or another periodic basis. In the context of insurance, premiums may be calculated on an annualized basis or as a rate per year. This would be called an annualized premium.

Insuranceopedia Explains Annualized

Although insurance premiums are often charged monthly, it is still helpful for individuals, families, and businesses to know what the annualized premium is. This can be especially useful if a policyholder plans to pay their insurance premiums in advance. For example, if a man wants to pay his auto insurance premium two years in advance and his monthly payment is $300 a month, then he has an annualized premium of $3,600. He would have to pay $7,200 to cover two years of insurance.

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