Faced with a whacking great annual insurance premium, many of us are tempted by the option to pay monthly. Indeed, for many of us, this is the only way to afford cover – finding what can often be a four-figure sum to pay for the policy simply isn’t feasible. But if you opt for instalments, rather than a one-off payment, the chances are the premium will be bigger. Insurers charge interest on what is effectively a loan that you are repaying over 12 months, so a £1,000 premium could end up costing you £1,150 or more once the charges are taken into account. So, if you can afford to pay in one go, it’s the better bet in the long term.