Annualized

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 makes it easier to compare quotes from different insurers, since most companies advertise rates on different timeframes, and the annual figure is what tells you how much car insurance actually costs over a full policy term. 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. Once you know your annualized figure, it’s also easier to spot whether your rate is creeping up year over year and to look into ways to lower your auto insurance rate before renewal.