---
title: Payment Modes
description: Payment Modes calculate based upon a modal which is applied to the annual premium to determine the amount due for each payment period.
---

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# Payment Modes

## Payment Modes calculate based upon a modal which is applied to the annual premium to determine the amount due for each payment period.

The modal factors typically used are:

- **Single (1 payment):** 1.00
- **Annual (1 payment):** 1.00
- **Semi-Annual (2 payments):** 0.50
- **Quarterly (4 payments):** 0.25
- **Monthly (12 payments):** 0.0833

### **Example**

- If the **Annual Premium** is $1,200 and the client pays **monthly**, the **Modal Factor** is 0.0833.

Modal Premium=1200×0.0833=99.96

- - The monthly payment would be $99.96
- If the modal factor is not applied, the system will calculate the premium by dividing the total premium by the number of payments.
  
  Payments per year calculation =1200/12=100 
    - The monthly payment would be $100

### **Things to consider**

- **Modal factors** may vary slightly depending on the insurance carrier.

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